1
EXHIBIT 10.32
EXECUTION COPY
U.S. $150,000,000
CREDIT AGREEMENT
AMONG
WESTERN NATIONAL CORPORATION
AS BORROWER,
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
AND OTHER LENDERS NAMED HEREIN,
AS LENDERS,
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
AS AGENT,
AND
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
AS CO-AGENT
FEBRUARY 20, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
1.2 Use of Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
1.3 Cross References; Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
1.4 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -18-
1.5 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -18-
ARTICLE II
REVOLVING CREDIT FACILITY
2.2 Committed Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -19-
2.3 Bid Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -20-
2.4 Disbursements; Funding Reliance; Domicile of Loans . . . . . . . . . . . . . . . . . . . . . . . -23-
2.5 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -23-
2.6 Termination and Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . -24-
2.7 Mandatory Payment and Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -24-
2.8 Voluntary Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -25-
2.9 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -25-
2.10 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -27-
2.11 Interest Periods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -27-
2.12 Conversions and Continuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -28-
2.13 Method of Payments; Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -29-
2.14 Recovery of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -30-
2.15 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -31-
2.16 Pro Rata Treatment; Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . -31-
2.17 Increased Costs; Change in Circumstances; Illegality; etc. . . . . . . . . . . . . . . . . . . . -31-
2.18 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -33-
2.19 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -35-
ARTICLE III
CONDITIONS OF CLOSING AND BORROWING
3.1 Conditions of Closing and Initial Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . -35-
3.2 Conditions to All Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -38-
3.3 Waiver of Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -38-
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Corporate Organization and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -38-
4.2 Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -39-
4.3 Litigation; Government Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -39-
4.4 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -39-
4.5 Conflicts With Other Instruments, Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -40-
4.6 Governmental Compliance; Insurance Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . -40-
4.7 Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -40-
4.8 Margin Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -40-
4.9 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -40-
4.10 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -41-
4.11 Ownership of Properties, Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -41-
4.12 Business Locations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -41-
4.13 Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -41-
4.14 Subsidiaries; Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -41-
4.15 Investment Company Act; Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . -41-
4.16 Employee Plans; ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -41-
4.17 Financial Statements of the Borrower and its Insurance Subsidiary. . . . . . . . . . . . . . . . -42-
4.18 SAP Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -43-
4.19 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -44-
4.20 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -44-
4.21 Assets for Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -45-
4.22 Trade Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -45-
4.23 Securities Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -45-
4.24 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -45-
4.25 Employees and Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -45-
4.26 Reinsurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -46-
4.27 Policies of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -46-
ARTICLE V
AFFIRMATIVE COVENANTS
5.1 Repayment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -46-
5.2 Performance Under Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -46-
5.3 Reports, Certificates and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . -46-
5.4 Corporate Existence; Foreign Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . -50-
5.5 Books, Records and Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -50-
5.6 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -51-
5.7 Taxes and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -51-
5.8 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -51-
5.9 COBRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -51-
5.10 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -51-
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5.11 Maintenance of Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -51-
5.12 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -51-
5.13 Interest Rate Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -51-
ARTICLE VI
NEGATIVE COVENANTS
6.1 Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -51-
6.2 Adjusted Statutory Capital and Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -52-
6.3 Ratio of Consolidated Indebtedness to Total Capitalization . . . . . . . . . . . . . . . . . . . -52-
6.4 Risk Based Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -52-
6.6 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -52-
6.7 Reinsurance Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -52-
6.8 Limitation on Lines of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -52-
6.9 Mergers, Consolidations and Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -53-
6.10 Change in Ownership; Issuance of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -53-
6.11 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -53-
6.12 Business Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -53-
6.13 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -54-
6.14 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -54-
6.15 Stock of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -54-
6.16 Negative Pledge Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -54-
6.17 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -54-
6.18 Certain Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -54-
6.19 Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -55-
ARTICLE VII
EVENTS OF DEFAULT
7.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -55-
ARTICLE VIII
RIGHTS AND REMEDIES AFTER EVENT OF DEFAULT;
INTERCREDITOR PROVISIONS
8.1 Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -58-
8.2 Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -58-
8.3 Intercreditor Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -59-
8.4 Rights and Remedies Cumulative; Non-waiver; Etc . . . . . . . . . . . . . . . . . . . . . . . . -60-
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ARTICLE IX
THE AGENT
9.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -60-
9.2 Nature of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -60-
9.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -61-
9.4 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -61-
9.5 Non-Reliance on Agent and Other Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . -61-
9.6 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -62-
9.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -62-
9.8 The Agent in its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -62-
9.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -63-
9.10 Co-Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -63-
ARTICLE X
ASSIGNMENTS AND PARTICIPATIONS
10.1 Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -63-
10.2 Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -64-
10.3 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -65-
ARTICLE XI
MISCELLANEOUS
11.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -65-
11.3 Governing Law; Consent to Jurisdiction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -66-
11.4 Arbitration; Preservation and Limitation of Remedies . . . . . . . . . . . . . . . . . . . . . . -67-
11.5 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -68-
11.6 Indemnification of the Agent and the Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . -68-
11.7 Waivers by the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -69-
11.8 Assignment and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -69-
11.9 Amendment or Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -69-
11.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -70-
11.11 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -70-
11.12 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -70-
11.13 Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -70-
11.14 Conflict of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -70-
11.15 Injunctive Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -70-
11.16 Syndication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -71-
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EXHIBITS
Exhibit A-1 Form of Committed Loan Note
Exhibit A-2 Form of Bid Loan Note
Exhibit B-1 Form of Notice of Committed Borrowing
Exhibit B-2 Form of Notice of Conversion/Continuation
Exhibit C-1 Form of Bid Request
Exhibit C-2 Form of Invitation for Bids
Exhibit C-3 Form of Bid
Exhibit D Form of Assignment and Acceptance
Exhibit E-1 Form of Compliance Certificate (GAAP Financial Statements)
Exhibit E-2 Form of Compliance Certificate (Statutory Financial Statements)
Exhibit F Form of Funding Loss Methodology
Exhibit G Form of Opinion of Borrower's Counsel
SCHEDULES
Schedule 4.3 Claims Against Borrower
Schedule 4.6 Good Standing and Jurisdictions of Insurance Subsidiary
Schedule 4.12 Borrower Affiliate Offices
Schedule 4.14 Subsidiaries and Affiliates
Schedule 4.16 Employee Plans Disclosures
Schedule 4.20 Environmental Matters
Schedule 4.26 Reinsurance Agreements
Schedule 6.6 Existing Liens
Schedule 6.8 Life Insurance Lines of Business
Schedule 6.12 Business Activities
Schedule 6.16 Negative Pledge Agreements
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EXECUTION COPY
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of the 20th day of February, 1997 (the
"Credit Agreement" or the "Agreement"), is by and between
WESTERN NATIONAL CORPORATION, a Delaware corporation with its
principal offices in Houston, Texas (the "Borrower"); and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA, a national banking
association with its principal offices in Charlotte, North Carolina ("First
Union"), the financial institutions listed on the signature pages hereof, and
the other banking and financial institutions that may become a party hereto
pursuant to ARTICLE X hereof (collectively the "Lenders"); FIRST UNION, as
agent for the Lenders (in such capacity, the "Agent"); and TEXAS COMMERCE BANK
NATIONAL ASSOCIATION, a national banking association with its principal offices
in Houston, Texas (the "Co-Agent").
RECITALS
A. The Borrower has requested the Lenders to extend credit to it
on a revolving basis in an aggregate principal amount of up to $150,000,000 to
be used (i) to repay the Borrower's outstanding senior revolving credit
facility and (ii) to provide funds for general corporate purposes.
B. The Lenders are willing to extend such revolving credit
pursuant to the terms and subject to the conditions set forth herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Lenders and the
Agent hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. For purposes of this Credit Agreement, in
addition to the terms defined elsewhere herein, the following terms shall have
the meanings set forth below:
"Absolute Rate" shall have the meaning given to such term in SECTION
2.3(C)(V).
"Absolute Rate Auction" shall mean a solicitation of Bids setting
forth Absolute Rates pursuant to SECTION 2.3.
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"Absolute Rate Loan" shall mean, at any time, any Bid Loan that bears
interest at such time at an Absolute Rate established pursuant to an Absolute
Rate Auction.
"Account Designation Letter" shall mean a letter from the Borrower to
the Agent, duly completed and signed by an Authorized Officer and in form and
substance satisfactory to the Agent, listing any one or more accounts to which
the Borrower may from time to time request the Agent to forward the proceeds of
any Loans made hereunder.
"Adjusted LIBOR Rate" shall mean, at any time with respect to any
Loan, a rate per annum equal to the LIBOR Rate plus the LIBOR Committed Margin,
each as in effect at such time.
"Adjusted Statutory Capital and Surplus" shall mean, as to the
Insurance Subsidiary, as of any date, the sum of the amount of statutory
capital and surplus as shown on page 3, column 1, line 38 of the Annual
Statement, plus the amount of any asset valuation reserve maintained by the
Insurance Subsidiary in accordance with SAP set forth on page 3, column 1, line
24.1 of the Annual Statement, or the sum of such amounts determined in a
consistent manner for any date other than one as of which an Annual Statement
is prepared.
"Admitted Assets" shall mean, as to the Insurance Subsidiary, as of
any date, the total amount shown on page 2, column 1, line 24 of the Annual
Statement of the Insurance Subsidiary, or an amount determined in a consistent
manner for any date other than one as of which an Annual Statement is prepared.
"Affiliate" shall mean, as to any Person, each of the Persons that
directly or indirectly, through one or more intermediaries, owns or controls,
or is controlled by or under common control with, such Person. For the purpose
of this definition, "control" means the possession, direct or indirect, of the
power to direct or cause the direction of management and policies, whether
through the ownership of voting securities, by contract or otherwise, provided
that in any event: (i) any Person which owns directly or indirectly 20% or more
of the Securities having ordinary voting power for the election of directors or
other governing body of a corporation or 20% or more of the partnership or
other ownership interests of any other Person (other than as a limited partner
of such other Person) will be deemed to control such corporation or other
Person, and (ii) each director and officer of the Borrower or Insurance
Subsidiary shall be deemed to be an Affiliate of the Borrower.
"Agent" shall mean First Union and any successor agents appointed
pursuant to ARTICLE IX.
"Agreement" shall mean this Credit Agreement, together with any
amendments, modifications and supplements hereto and restatements hereof, in
whole or in part.
"Aggregate Unutilized Commitments" shall mean, at any time, (i) the
sum of the Commitments at such time less (ii) the sum of the aggregate
principal amount of Loans outstanding at such time.
"Annual Statement" shall mean an annual financial statement of the
Insurance Subsidiary as required to be filed with the insurance commissioner
(or similar authority) of its state of domicile, together with all exhibits and
schedules filed therewith, prepared in conformity with SAP.
-2-
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"Assignment and Acceptance" shall mean an Assignment and Acceptance
Agreement between any Lender and an Eligible Assignee, pursuant to which such
Lender assigns to such assignee, and the assignee accepts, all or a portion of
such Lender's rights and obligations under this Credit Agreement, substantially
in the form of EXHIBIT D hereto.
"Authorized Officer" shall mean the president or chief financial
officer of the Borrower or any other officer of the Borrower authorized by
resolution of the board of directors of the Borrower to engage in the activity
specified herein with respect to such officer and whose signatures and
incumbency shall have been certified to the Agent pursuant to SECTION
3.2(A)(IV).
"Bankruptcy Code" shall mean 11 U.S.C. Sections 101 et seq., as
amended from time to time, and any successor statute.
"Base Rate" shall mean the higher of (i) the per annum interest rate
publicly announced from time to time by First Union in Charlotte, North
Carolina, to be its prime or base rate (which may not necessarily be its best
lending rate), as adjusted to conform to changes as of the opening of business
on the date of any such change in such prime or base rate, or (ii) 0.5% per
annum plus the Federal Funds Rate, as adjusted to conform to changes as of the
opening of business on the date of any such change in the Federal Funds Rate.
"Base Rate Loan" shall mean, at any time, any outstanding Committed
Loan that bears interest at such time at the Base Rate as in effect at such
time.
"Bid" shall mean an offer by a Lender to make one or more Bid Loans in
accordance with the provisions of SECTION 2.3.
"Bid Borrowing" shall mean the incurrence by the Borrower on a single
date of any one or more Bid Loans of a single Type and as to which a single
Interest Period is in effect, in accordance with the provisions of SECTION 2.3.
"Bid Loan Notes" shall mean the promissory notes of the Borrower in
substantially the form of EXHIBIT A-2, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.
"Bid Loans" shall have the meaning given to such term in SECTION
2.1(B).
"Bid Request" shall have the meaning given to such term in SECTION
2.3(A).
"Borrower" shall mean Western National Corporation, a Delaware
corporation, and its successors and assigns.
"Borrower Affiliate" shall mean any of the Borrower or any of its
Material Subsidiaries.
"Borrowing" shall mean a Committed Borrowing or a Bid Borrowing.
"Borrowing Date" shall mean, with respect to any Borrowing, the date
on which such Borrowing is made.
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"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day that shall
be in the City of Charlotte, North Carolina, a legal holiday or a day on which
banking institutions are authorized by law or other governmental actions to
close, and (ii) with respect to all determinations and notices in connection
with, and payments of principal and interest on, LIBOR Loans, any day that is a
Business Day described in clause (i) and that is also a day for trading by and
between banks in Dollar deposits in the London interbank market.
"Capital Lease" shall mean any lease of any property that would, in
accordance with Generally Accepted Accounting Principles, be required to be
classified and accounted for as a capital lease on a balance sheet of the
lessee.
"Cash Equivalents" shall mean (i) securities issued or unconditionally
guaranteed by the United States of America or any agency or instrumentality
thereof, backed by the full faith and credit of the United States of America
and maturing within one year, (ii) securities issued by any state of the United
States of America or any political subdivision or public instrumentality
thereof, maturing within one year and having a rating of at least A or the
equivalent thereof by S&P or at least A2 or the equivalent thereof by ▇▇▇▇▇'▇,
(iii) commercial paper issued by any Person organized under the laws of the
United States of America or any state thereof, maturing in no more than 270
days and having a rating of at least A-1 or the equivalent thereof by S&P or at
least P-1 or the equivalent thereof by ▇▇▇▇▇'▇, (iv) repurchase transactions in
which the Borrower Affiliate lends cash to a primary dealer and the primary
dealer collateralizes the borrowing of the cash with securities defined in
clause (i) above, provided that such primary dealer shall have a rating on its
public debt of at least A or the equivalent thereof by S&P or at least A2 or
the equivalent thereof by ▇▇▇▇▇'▇, (v) time deposits and certificates of
deposit that are insured by the Federal Deposit Insurance Corporation (the
"FDIC") or any successor instrumentality of the government of the United States
of America up to the applicable limit on insurance granted by the FDIC or such
other instrumentality with respect to such instruments (it being understood
that the amount invested in such instrument may not exceed the limit on such
insurance), maturing within one year and issued by a bank or trust company
organized under the laws of the United States of America or any state thereof
and having combined capital and surplus of at least $250,000,000 and (vi) money
market funds substantially all of whose assets are comprised of securities of
the types described in clauses (i) through (iii) above.
"Change in Ownership" shall mean the acquisition by any Person and its
Affiliates or any "Person" as defined in Section 13(d) of the Securities and
Exchange Act of 1934 and the regulations promulgated thereunder of Stock
representing twenty percent (20%) or more of the voting control of the
Borrower. This term shall not include acquisitions of Stock by American
General Corporation.
"Closing" shall mean the execution and delivery of this Credit
Agreement and the other Loan Documents contemplated hereby by the parties
hereto or thereto, as the case may be and the satisfaction of all conditions
set forth in ARTICLE III, other than the conditions of SECTIONS 3.1(G) and
3.2(A) which shall be satisfied contemporaneously with and prior to,
respectively, the initial Borrowing hereunder.
"Closing Date" shall mean the date the Closing occurs.
"Committed Borrowing" shall mean the incurrence by the Borrower
(including as a result of conversions and continuations of outstanding
Committed Loans pursuant to SECTION 2.12) on a single date of a group of
Committed Loans of a single Type and, in the case of LIBOR Committed Loans, as
to which a single Interest Period is in effect.
-4-
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"Committed Loan Notes" shall mean the promissory notes of the Borrower
in substantially the form of ▇▇▇▇▇▇▇ ▇- ▇, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.
"Committed Loans" shall have the meaning given to such term in SECTION
2.1(A).
"Commitment" shall mean, at any time for any Lender, the amount set
forth opposite such Lender's name on its signature page hereto under the
heading "Commitment" or, if such Lender has entered into one or more Assignment
and Acceptances, the amount set forth for such Lender at such time in the
Register maintained by the Agent pursuant to SECTION 10.1(B) as such Lender's
"Commitment," as such amount may be reduced at or prior to such time pursuant
to the terms hereof.
"Company Action Level RBC" shall mean, as to the Insurance Subsidiary,
as of any date, twice the amount shown on line 28, column 1 of the schedule of
Five Year Historical Data of the Annual Statement, or the amount determined in
a consistent manner for any date other than one as of which an Annual Statement
is prepared.
"Compliance Certificate" shall mean a certificate duly executed by an
Authorized Officer substantially in the form of EXHIBIT E-1 or E-2, as
applicable, with such changes as the Agent may from time to time reasonably
request, for the purpose of monitoring the Borrower's compliance herewith.
"Consolidated Indebtedness" shall mean the Indebtedness (excluding up
to $50,000,000 of Net Investment Borrowings) of Borrower and its Subsidiaries
determined on a consolidated basis in accordance with Generally Accepted
Accounting Principles.
"Consolidated Net Worth" shall mean, as to the Borrower, the net worth
of the Borrower and its Subsidiaries determined on a consolidated basis in
accordance with Generally Accepted Accounting Principles, but without regard to
the requirements of FAS 115.
"Contingent Liability" shall mean any agreement, undertaking or
arrangement by which any Person guarantees, endorses, acts as surety for or
otherwise becomes or is contingently liable for (by direct or indirect
agreement, contingent or otherwise, to provide funds for payment, to supply
funds to, or otherwise to invest in, a debtor, or otherwise to assure a
creditor against loss) the debt, obligation or other liability of any other
Person (other than by endorsements of instruments in the course of collection),
or for the payment of dividends or other distributions upon the shares of any
other Person or undertakes or agrees (contingently or otherwise) to purchase,
repurchase or otherwise acquire or become responsible for any Indebtedness,
obligation or liability or any security therefor, or to provide funds for the
payment or discharge thereof (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain the solvency,
assets, level of income, or other financial condition of any other Person, or
to make payment or transfer property to any other Person other than for value
received; provided, however, that (i) the obligations of any Person under
Reinsurance Agreements, (ii) miscellaneous indemnity and reimbursement
obligations of any Person entered into in the ordinary course of business
which, in the aggregate, are not material, and (iii) the obligations of Conseco
Annuity Guarantee Corporation assumed in the ordinary course of the structured
settlement annuity business of an Insurance Subsidiary shall not be deemed to
be Contingent Liabilities of such Subsidiary or the Borrower for the purposes
of this Credit Agreement.
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"Contractual Obligation" shall mean, relative to any Person, any
obligation, commitment or undertaking under any agreement or other instrument
to which such Person is a party or by which it or any of its property is bound
or subject. Contractual Obligations shall not include purported obligations
under any agreement or instrument that are reasonably contested in good faith
by such Person.
"Default" shall mean any of the events or conditions specified in
ARTICLE VII, regardless of whether there shall have occurred any passage of
time or giving of notice or both that would be necessary to constitute such
event or condition an Event of Default.
"Default Rate" shall mean, with respect to any Loan, an interest rate
equal to the sum of (i) the higher of the Base Rate for such Loan or the
Adjusted LIBOR Rate, plus (ii) the Utilization Fee Rate, if applicable, plus
(iii) two (2) percentage points, but in no event to exceed the Highest Lawful
Rate, if applicable.
"Department" shall mean, with respect to the Insurance Subsidiary, the
Texas Department of Insurance or such other Governmental Authority of its state
of domicile charged with regulating insurance companies or insurance holding
companies.
"Dollars" or "$" shall mean dollars of the United States of America.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, and any successor statute of similar import, together with the
regulations thereunder, as amended, reformed or otherwise modified and in
effect from time to time. References to sections of ERISA shall be construed
to also refer to successor sections.
"ERISA Event" shall mean, with respect to any Person, (a) a Reportable
Event (other than a Reportable Event not subject to the provision for 30-day
notice to the Pension Benefit Guaranty Corporation under regulations issued
under Section 4043 of ERISA), (b) the withdrawal of such Person or any
Affiliate of such Person from an Employee Plan during a plan year in which it
was a "substantial employer" as defined in Section 4001(a)(92) of ERISA if such
withdrawal would have a Material Adverse Effect on such Person, (c) the filing
of a notice of intent to terminate an Employee Plan under a distress
termination or the treatment of a Plan amendment as a distress termination
under Section 4041(c) of ERISA, (d) the institution of proceedings to terminate
an Employee Plan by the Pension Benefit Guaranty Corporation under Section 4042
of ERISA, (e) the failure to make required contributions that would result in
the imposition of a lien under Section 412 of the Internal Revenue Code or
Section 302 of ERISA, or (f) any other event or condition which constitutes
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Employee Plan.
"Eligible Assignee" shall mean (i) a commercial bank organized under
the laws of the United States or any state thereof and having total assets in
excess of $5,000,000,000 and total capital in excess of $500,000,000, (ii) a
commercial bank organized under the laws of any other country that is a member
of the OECD or a political subdivision of any such country and having total
assets in excess of $5,000,000,000 and total capital in excess of $500,000,000,
provided that such bank is acting through a branch or agency located in the
United States, in the country under the laws of which it is organized or in
another country that is also a member of the OECD, (iii) the central bank of
any country that is a member of the OECD, (iv) a finance company, mutual funds,
insurance company or other financial institution that is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary course of
its
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business and having total assets in excess of $3,000,000,000, (v) any Affiliate
of an existing Lender or (vi) any other Person (other than an Affiliate of the
Borrower) approved by the Agent and the Borrower, which approval shall not be
unreasonably withheld.
"Employee Plan" shall mean any "employee benefit plan" within the
meaning of Section 3(3) of ERISA maintained by the Borrower or its
Subsidiaries.
"Environmental Law" shall mean any federal, state or local law,
statute, ordinance, rule, regulation, permit, license, approval,
interpretation, order, guidance or other legal requirement (including without
limitation any subsequent enactment, amendment or modification) relating to the
protection of human health or the environment, including, but not limited to,
any requirement pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of materials that are or may
constitute a threat to human health or the environment. Without limiting the
foregoing, each of the following is an Environmental Law: the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section
9601 et seq.) ("CERCLA"), the Hazardous Material Transportation Act (49 U.S.C.
Section 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.) ("RCRA"), the Federal Water Pollution Control Act (33
U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et
seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the
Safe Drinking Water Act (42 U.S.C. Section 300, et seq.), and the Occupational
Safety and Health Act (29 U.S.C. Section 651 et seq.) ("OSHA"), as such laws
have been amended or supplemented, and each similar federal, state and local
statute, and each rule and regulation promulgated under such federal, state and
local laws.
"Event of Default" shall have the meaning specified in ARTICLE VIII
hereof.
"FAS 115" shall mean Statement of Financial Accounting Standards
number 115 issued by the Financial Accounting Standards Board of the American
Institute of Certified Public Accountants.
"Facility Fee Rate" shall mean, at any time, the applicable per annum
percentage as determined under the following table with reference to the
Borrower's Senior Debt Rating Level as provided below:
==============================================
Senior Debt Facility
Rating Level Fee Rate
----------------------------------------------
I 0.080%
----------------------------------------------
II 0.100%
----------------------------------------------
III 0.125%
----------------------------------------------
IV 0.150%
==============================================
"Federal Funds Rate" shall mean, for any period, a fluctuating per
annum interest rate (rounded upwards, if necessary, to the nearest 1/100 of one
percentage point) equal for each day during such period to the weighted average
of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business
Day) by the Federal Reserve Bank of New York, or if such
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rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
federal funds brokers of recognized standing selected by the Agent.
"Fee Letter" shall mean the letter from First Union to the Borrower,
dated December 6, 1996, relating to the facility and administrative fees
payable in respect of the transactions contemplated by this Agreement, as
amended, modified or supplemented from time to time.
"Financials" or "Financial Statements" shall mean the consolidated and
consolidating balance sheet and statements of income and cash flow, to be
delivered to the Lenders by the Borrower pursuant to SECTIONS 4.17, 4.18,
5.3(A) and 5.3(B) hereof, and all other Financial Statements of Borrower and
its Subsidiaries that have previously been delivered by the Borrower to the
Lenders, including without limitation any interim Financial Statements.
"First Union" shall mean First Union National Bank of North Carolina,
a national banking association with its principal offices in Charlotte, North
Carolina.
"Fiscal Quarter" shall mean any quarter of a Fiscal Year.
"Fiscal Year" shall mean any period of twelve consecutive calendar
months ending on the last day of December.
"Generally Accepted Accounting Principles" or "GAAP" shall mean
generally accepted accounting principles, as recognized by the American
Institute of Certified Public Accountants, consistently applied and maintained
on a consistent basis for a Person throughout the period indicated and
consistent with the prior financial practice of such Person except for changes
required due to changes in GAAP or changes consistent with GAAP with which the
independent public accountants of Borrower concur, with the nature and effect
of such changes being disclosed in the Financial Statements.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, including, without limitation, the Department or any
similar body or agency.
"Hazardous Material" shall mean any substance or material meeting any
one or more of the following criteria: (i) it is defined as a hazardous waste,
hazardous substance, pollutant, contaminant or toxic substance under any
Environmental Law; (ii) it is toxic, explosive, corrosive, ignitable,
infectious, radioactive, mutagenic or otherwise hazardous, (iii) its presence
requires investigation or remediation under an Environmental Law or common law;
(iv) it constitutes a danger, nuisance, trespass or health or safety hazard to
persons or property; (v) it is or was an underground or aboveground storage
tank with a capacity of at least fifty-five gallons, whether empty, filled or
partially filled with any substance; and/or (vi) it is or contains, without
limiting the foregoing, asbestos, polychlorinated biphenyls, urea formaldehyde
foam insulation, petroleum hydrocarbons, petroleum derived substances or waste,
crude oil, nuclear fuel, natural gas or synthetic gas.
"Highest Lawful Rate" shall mean, with respect to each Lender, the
maximum nonusurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the Notes
or other Obligations, as the case may be, under laws applicable to such Lender
that are presently in effect or, to the extent allowed by law, under such
applicable laws that may hereafter be
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in effect and that allow a higher maximum nonusurious interest rate than
applicable laws now allow; provided, however, that this term shall apply only
in the event that Texas law applies to such Lender with respect to interest or
usury under this Credit Agreement and shall otherwise be null and void and of
no effect.
"Indebtedness" of a Person shall mean (without duplication):
(i) all indebtedness of such Person for borrowed money
including without limitation all obligations evidenced by bonds,
debentures, notes or other similar instruments (including, with
respect to the Borrower, all outstanding Obligations hereunder);
(ii) indebtedness of such Person for the deferred purchase
price of services or property;
(iii) all obligations of such Person created or arising
under any conditional sale or other title retention agreement with
respect to property or assets acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such
property or assets);
(iv) obligations of such Person under Capital Leases;
(v) indebtedness of such Person arising under acceptance
facilities;
(vi) all obligations of such Person in respect of Rate
Protection Agreements (it being understood that the amount of
Indebtedness of such Person under any Rate Protection Agreement as of
any date shall be deemed to equal the termination value payable by
such Person if such Rate Protection Agreement were terminated on such
date);
(vii) indebtedness of such Person consisting of unpaid and
overdue reimbursement obligations in respect of all obligations under
letters of credit issued for the account of such Person;
(viii) all unfunded pension fund obligations and
liabilities;
(ix) any Indebtedness of a partnership in which such
Person is a general partner;
(x) all obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any shares
of capital stock of, or other ownership or profit interests in, such
Person or in any other Person, or any warrants, rights or options to
acquire such shares, valued, in the case of redeemable preferred
stock, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends;
(xi) all Indebtedness as stated in the definition of Net
Investment Borrowings;
(xii) all indebtedness of such Person arising out of such
Person's agreement (i) to pay or purchase such indebtedness or to
advance or supply funds for the payment or purchase of such
indebtedness, excluding in the case of a Borrower Affiliate,
liabilities assumed pursuant to its single premium immediate annuity
program, (ii) to purchase, sell or lease (as lessee or lessor)
property and assets, or to purchase or sell services, primarily for
the purpose of enabling the debtor to make payment of such
indebtedness or to assure the holder of such indebtedness against
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loss, (iii) to supply funds to or in any other manner to invest in the
debtor (including, without limitation, any agreement to pay for the
property and assets or services irrespective of whether such property
and assets are received or such services are rendered) or (iv)
otherwise to assure a creditor against loss; and
(xiii) all Contingent Liabilities of such Person (including,
without limitation, with respect to each of the foregoing clauses (i)
through (xii), any such indebtedness or obligation that is
non-recourse to the credit of such Person but is secured by assets of
such Person, but in any such case only to the extent of the greater of
the fair market value or the book value of such assets);
PROVIDED, HOWEVER, that Indebtedness shall not include amounts payable
in the ordinary course of business under the terms of insurance
policies and annuities issued, assumed, or reinsured by an Insurance
Subsidiary.
"Insurance Code" shall mean, as to the Insurance Subsidiary, the
Insurance Code of the state of domicile and any successor statute of similar
import, together with the regulations thereunder, as amended or otherwise
modified and in effect from time to time. References to sections of the
Insurance Code shall be construed to also refer to successor sections.
"Insurance Policies" shall mean policies purchased from insurance
companies by either the Borrower or any Subsidiary for its own account to
insure against its own liability and property loss (including, without
limitation, casualty, liability and workers' compensation insurance), other
than Reinsurance Agreements.
"Insurance Subsidiary" shall mean Western National Life Insurance
Company, and its respective successors and assigns, and any other Subsidiary of
Borrower the ability of which to pay dividends is regulated by a Governmental
Authority.
"Interest Period" shall have the meaning given to such term in SECTION
2.11.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
and any successor statute of similar import, together with the regulations
thereunder, as amended, reformed or otherwise modified and in effect from time
to time. References to sections of the Internal Revenue Code shall be
construed to also refer to successor sections.
"Investment Grade Securities" shall mean non-equity securities that
are rated "BBB-" or better by S&P, or "Baa3" by Moody's, "2" or better by the
SVO, "BBB-" or better by Fitch Investors Service, Inc., or "BBB-" or better by
Duff & ▇▇▇▇▇▇ Inc., or, in the case of securities not rated by one of the
foregoing rating agencies, an equivalent rating by an equivalent rating agency
selected by the Agent.
"Invitation for Bids" shall have the meaning given to such term in
SECTION 2.3(B).
"Lenders" shall mean First Union and the other banking and financial
institutions signatory hereto, and the other banking and financial institutions
that may become a party to this Agreement pursuant to SECTION 10.1 hereof, and
their successors or assigns.
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"Lending Office" shall mean, with respect to any Lender, the office of
such Lender designated as its "Lending Office" on its signature page hereto or
in an Assignment and Acceptance, or such other office as may be otherwise
designated in writing from time to time by such Lender to the Borrower and the
Agent. A Lender may designate separate Lending Offices as provided in the
foregoing sentence for the purposes of making or maintaining different Types of
Loans, and, with respect to LIBOR Loans, such office may be a domestic or
foreign branch or Affiliate of such Lender.
"LIBOR Auction" shall mean a solicitation of Bids setting forth LIBOR
Bid Margins pursuant to SECTION 2.3.
"LIBOR Bid Loan" shall mean, at any time, any Bid Loan that bears
interest at such time at a rate equal to the LIBOR Rate as in effect at such
time plus (or minus) a LIBOR Bid Margin established pursuant to a LIBOR
Auction.
"LIBOR Bid Margin" shall have the meaning given to such term in
SECTION 2.3(C)(IV).
"LIBOR Committed Loan" shall mean, at any time, any outstanding
Committed Loan that bears interest at such time at the Adjusted LIBOR Rate as
in effect at such time.
"LIBOR Committed Margin" shall mean, at any time with respect to any
Committed Loan, the applicable percentage as determined under the following
table with reference to the Borrower's Senior Debt Rating Level:
============================================
Senior Debt LIBOR
Rating Level Margin
--------------------------------------------
I 0.170%
--------------------------------------------
II 0.200%
--------------------------------------------
III 0.275%
--------------------------------------------
IV 0.350%
============================================
"Senior Debt Rating Level I" shall mean that neither rating assigned by Moody's
or S&P to any class of long-term senior unsecured and unsupported debt issued
by Borrower is lower than "A3" or "A-", respectively; "Senior Debt Rating Level
II" shall mean that neither rating is lower than "Baa1" or "BBB+",
respectively, but at least one such rating is not as high as its Senior Debt
Rating Level I rating; "Senior Debt Rating Level III" shall mean that neither
rating is lower than "Baa2" or "BBB", respectively, but at least one such
rating is not as high as its Senior Debt Rating Level II rating; and "Senior
Debt Rating Level IV" shall mean that either such rating is not as high as its
Senior Debt Rating Level III rating.
Each change in the LIBOR Committed Margin shall apply during the period
commencing on the effective date of any change in the Senior Debt Rating Level
and ending on the date immediately preceding the effective date of the next
such change. If the ratings system of Moody's or S&P shall change, or if any
such rating agency shall cease to be in the business of rating such debt, the
Borrower and the Required Lenders shall negotiate in good faith to agree upon a
substitute rating agency and to amend the references
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to specific ratings in this definition to reflect the ratings used by such
substitute rating agency and, pending such agreement, the LIBOR Committed
Margin shall be determined on the basis of the ratings provided by the other
rating agency.
"LIBOR Loan" shall mean any LIBOR Committed Loan or LIBOR Bid Loan.
"LIBOR Rate" shall mean, for any Interest Period, an interest rate per
annum obtained by dividing (i) (y) the rate of interest appearing on Telerate
Page 3750 (or any successor page) or (z) if no such rate is available, or at
the option of the Agent in any event, the rate of interest determined by the
Agent to be the rate or the arithmetic mean of rates at which Dollar deposits
in immediately available funds are offered by First Union to first-tier banks
in the London interbank Eurodollar market, in each case under (y) and (z) above
at approximately 11:00 a.m., London time, two (2) Business Days prior to the
first day of such Interest Period for a period substantially equal to such
Interest Period and in an amount substantially equal to the amount of First
Union's Loan comprising part of such LIBOR Loan, by (ii) the amount equal to
1.00 minus the Reserve Requirement for such Interest Period. The LIBOR Rate
shall be rounded to the next higher 1/100 of one percentage point; provided
that, for purposes of this definition, with respect to LIBOR Bid Loans
comprising a Bid Borrowing in which First Union is not participating, the LIBOR
Rate shall be determined as if such LIBOR Bid Loans were LIBOR Committed Loans.
"Licenses" is defined in SECTION 4.6.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
security interest, lien (statutory or otherwise), preference, priority, charge
or other encumbrance of any nature, whether voluntary or involuntary,
including, without limitation, the interest of any vendor or lessor under any
conditional sale agreement, title retention agreement, capital lease or any
other lease or arrangement having substantially the same effect as any of the
foregoing.
"Loan" or "Loans" shall mean and collectively refer to the Committed
Loans and the Bid Loans.
"Loan Documents" shall mean and collectively refer to this Agreement,
each of the Notes, all Supplemental Documentation, any Rate Protection
Agreements between the Borrower and any Lender, and any and all amendments,
modifications, replacements, substitutes and supplements to such documents,
together with any other documents executed by or on behalf of the Borrower, its
Insurance Subsidiary or other Affiliates in connection with any of the
foregoing or that designate themselves Loan Documents under this Credit
Agreement.
"Loan Termination Date" shall mean the earliest of (i) the Maturity
Date or such earlier date resulting from any mandatory or voluntary permanent
reduction in the Total Commitment, (ii) the date of termination by the Required
Lenders after the occurrence and during the continuance of an Event of Default,
(iii) such date of termination as is mutually agreed upon by the Lenders and
the Borrower, and (iv) the date after all Obligations have been paid in full
and the Lenders are no longer obligated to make Loans hereunder.
"Margin Stock" shall have the meaning provided in Regulation U.
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"Material Adverse Change" shall mean a material adverse change in the
condition (financial or otherwise), operations, business, properties or
financial prospects of the Borrower or the Borrower and its Subsidiaries, taken
as a whole.
"Material Adverse Effect" shall mean, relative to any occurrence of
whatever nature (including any determination in litigation, arbitration or
governmental proceeding or investigation), a materially adverse effect on:
(a) the assets, business, financial condition, operations
or prospects of a Person; or
(b) the ability of any Person to perform any of its
payment or other obligations under this Credit Agreement, any of the
Notes, or any of the other Loan Documents.
"Material Subsidiary" shall mean Western National Life, WNL Holding
Corp., a Delaware corporation, any Subsidiary that owns, directly or
indirectly, any Stock or Securities of Western National Life, and any other
Subsidiary whose assets, liabilities, or revenues constitute five percent (5%)
or greater of either the assets, liabilities, or revenues, respectively, of the
Borrower on a consolidated basis as shown in the Financial Statements required
under SECTION 5.3(A).
"Maturity Date" shall mean the fifth (5th) anniversary of the Closing
Date.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., its successors
and assigns.
"Multiemployer Plan" shall mean any "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA to which any Borrower Affiliate is
required to make contributions.
"NAIC" shall mean the National Association of Insurance Commissioners,
or any successor thereto.
"Net Investment Borrowings" shall mean (a) Indebtedness of the
Borrower and its Subsidiaries incurred in connection with (i) mortgage-backed
security transactions in which an investor sells mortgage collateral, such as
securities issued by the Government National Mortgage Association and the
Federal Home Loan Mortgage Corporation, for delivery in the current month while
simultaneously contracting to repurchase "substantially the same" (as
determined by the Public Securities Association and GAAP) collateral for a
later settlement; (ii) transactions in which an investor lends cash to a
primary dealer and the primary dealer collateralizes the borrowing of the cash
with certain securities; (iii) transactions in which an investor lends
securities to a primary dealer and the primary dealer collateralizes the
borrowing of the securities with cash collateral; and (iv) transactions in
which an investor makes loans of securities to a broker dealer under an
agreement requiring such loans to be continuously secured by cash collateral or
United States government securities, less, (b) the Short Term Investments of
the Borrower and its Subsidiaries.
"Notes" shall mean the Committed Loan Notes and the Bid Loan Notes.
"Notice of Committed Borrowing" shall have the meaning given to such
term in SECTION 2.2(A).
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"Notice of Conversion/Continuation" shall mean a notice in the form
attached hereto as EXHIBIT B-2 to be delivered by the Borrower to the Agent
pursuant to SECTION 2.12(B).
"OECD" shall mean the Organization for Economic Cooperation and
Development and any successor thereto.
"Obligations" shall mean and include the Loans and all other loans,
advances, indebtedness, liabilities, obligations, covenants and duties
(including post-petition interest on the foregoing, to the extent lawful)
owing, arising, due or payable jointly or severally, from the Borrower to any
Lender, of any kind or nature, present or future, howsoever evidenced, created,
incurred, acquired or owing, whether arising under this Credit Agreement, the
Notes or the other Loan Documents, whether direct or indirect (including those
acquired by assignment), absolute or contingent, primary or secondary, due or
to become due, now existing or hereafter arising and however acquired. The
term includes, without limitation, all interest, charges, expenses, fees,
attorneys' fees and any other sums chargeable to the Borrower by any Lender
under this Credit Agreement or any of the other Loan Documents.
"Pension Benefit Guaranty Corporation" shall mean the Pension Benefit
Guaranty Corporation or any entity succeeding to any or all of its functions.
"Permitted Liens" is defined in SECTION 6.6.
"Person" shall mean a corporation, an association, a joint venture, a
partnership, an organization, a business, an individual, a trust or a
government or political subdivision thereof or any government agency.
"Prohibited Transaction" shall have the meaning given such term under
ERISA or Section 4975 of the Internal Revenue Code.
"Rate Protection Agreement" shall mean (a) any interest rate
protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate collar agreement,
interest rate hedge agreement, basis swap agreement, forward rate agreement or
other similar agreement or arrangement designed to protect any Person against
fluctuations in interest rates (including any option to enter into any of the
foregoing and any master agreement for any of the foregoing); (b) any foreign
exchange contract, forward foreign exchange agreement, currency swap agreement,
cross-currency rate swap agreement, currency option or other similar agreement
or arrangement designed to protect any Person against fluctuations in currency
values (including any option to enter into any of the foregoing and any master
agreement for any of the foregoing); or (c) to the extent not covered by
clauses (a) and (b) above, any derivative instrument, agreement or product used
or entered into by any Person in the ordinary course of selling, issuing or
underwriting insurance or reinsurance.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System, 12 C.F.R. Part 204, or any successor or other
regulation relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"Regulation G" shall mean Regulation G of the Board of Governors of
the Federal Reserve System, 12 C.F.R. Part 207, or any successor or other
regulation relating to reserve requirements applicable to member banks of the
Federal Reserve System.
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"Regulation T" shall mean Regulation T promulgated by the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 220.3 and 220.4, or
any successor or other regulation hereafter promulgated by said Board to
replace the prior Regulation T and having substantially the same function.
"Regulation U" shall mean Regulation U promulgated by the Board of
Governors of the Federal Reserve System, 12 C.F.R. Part 221, or any successor
or other regulation hereafter promulgated by said Board to replace the prior
Regulation U and having substantially the same function.
"Regulation X" shall mean Regulation X promulgated by the Board of
Governors of the Federal Reserve System, 12 C.F.R. Part 224, or any successor
or other regulation hereafter promulgated by said Board to replace the prior
Regulation X and having substantially the same function.
"Reinsurance Agreements" shall mean any agreement, contract, treaty,
certificate or other arrangement (other than a Surplus Relief Reinsurance
Agreement) whereby an Insurance Subsidiary agrees to transfer, cede or
retrocede to another insurer or reinsurer all or part of the liability assumed
by such an Insurance Subsidiary under a policy or policies of insurance issued
by such an Insurance Subsidiary.
"Reportable Event" shall have the meaning given such term in ERISA.
"Required Lenders" shall mean (i) at any time prior to the Loan
Termination Date, the Lenders having more than fifty percent (50%) of the
aggregate Commitments at such time, and (ii) on and after the Termination Date,
the Lenders having more than fifty percent (50%) of the aggregate principal
amount of the Loans outstanding at such time (or, if at any time on or after
the Loan Termination Date at which no Loans are outstanding, the Lenders having
more than fifty percent (50%) of the aggregate Commitments immediately prior to
the termination of the Commitments).
"Requirement of Law" for any Person shall mean the articles of
incorporation and bylaws or other organizational or governing documents of such
Person, and any federal, state or local law (whether statutory, judicial or
administrative), treaty, rule, ordinance or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person
or any of its property is subject.
"Reserve Requirement" shall, on any day, mean that percentage
(expressed as a decimal) that is in effect on such day, as provided by the
Board of Governors of the Federal Reserve System (or any successor governmental
body) applied for determining the maximum reserve requirements (including
without limitation, basic, supplemental, marginal and emergency reserves) under
Regulation D with respect to "Eurocurrency liabilities" as currently defined in
Regulation D, or under any similar or successor regulation with respect to
Eurocurrency liabilities or Eurocurrency funding. Each determination by a
Lender of the Reserve Requirement shall, in the absence of manifest error, be
conclusive and binding.
"S&P" shall mean Standard & Poor's Ratings Group, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc., its successors and assigns.
"Securities" shall mean common and preferred stock, partnership units
and participations, certificates of equity contribution, notes, bonds,
debentures, surplus debentures or notes, trust receipts and other obligations,
instruments or evidences of indebtedness, including debt instruments of public
and private issuers and tax-exempt securities (including, without limitation,
warrants, rights, put and call
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options and other options relating thereto or any combination thereof),
guarantees of indebtedness, choses in action, other property or interests
commonly regarded as securities or any form of interest or participation
therein (whether certificated or uncertificated) or any instruments convertible
into any of the foregoing, other than insurance products issued in the ordinary
course of business of an Insurance Subsidiary and any shares or interests
issued pursuant to the Investment Company Act of 1940 in connection with such
products.
"Senior Debt Rating Level I [through] IV" shall have the meaning given
such terms in the definition of "LIBOR Committed Margin." As of the Closing
Date, Senior Debt Rating Level II shall be applicable to the Borrower.
"Short Term Investments" shall mean Cash Equivalents and Investment
Grade Securities (i) having maturities of less than one year or (ii) bearing
interest at rates that are repriced to market rates at least annually.
"Solvent" shall mean, with respect to any Person at any time, that
such Person (i) has capital sufficient to carry on its business as presently
conducted and as then proposed to be conducted, (ii) has assets sufficient to
pay its debts and other liabilities (including contingent liabilities) as they
become absolute and matured, and (iii) does not then intend to, and does not
then believe that it will, incur debts or liabilities beyond its ability to pay
such debts and liabilities as they mature, and, in the case of the Insurance
Subsidiary, such term shall mean that such Subsidiary, at such time, satisfies
the minimum capital requirements of the Department.
"Statutory Accounting Principles" or "SAP" shall mean the statutory
accounting practices prescribed or permitted by the insurance commissioner (or
other similar authority) in the State of Texas for the preparation of Annual
Statements and other financial reports by insurance corporations of the same
type as the Insurance Subsidiary, as applied by the Insurance Subsidiary on a
basis consistent with prior periods.
"Statutory Financial Statements" is defined in SECTION 4.18(A).
"Stock" shall mean all shares, options, interests or other equivalents
(howsoever designated) of or in a corporation, whether voting or non-voting,
including, without limitation, common stock, warrants, preferred stock,
convertible debentures and all agreements, instruments and documents
convertible, in whole or in part, into any one or more or all of the foregoing.
"Subsidiary" shall mean a corporation of which the Borrower and its
other Subsidiaries, individually or in the aggregate, own, directly or
indirectly, such number of outstanding shares as have at the time of any
determination hereunder more than 50% of the ordinary voting power for the
election of directors (or their equivalent under the laws of the jurisdiction
of organization of such corporation).
"Supplemental Documentation" shall mean all agreements, instruments,
documents, notices, schedules and other written matter necessary or requested
by the Agent or the Lenders to consummate the transactions contemplated by this
Credit Agreement and the Notes.
"Surplus Relief Reinsurance Agreement" shall mean any transaction in
which any Insurance Subsidiary cedes business under a reinsurance agreement
that would be considered a "financing-type"
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reinsurance agreement as determined in accordance with principles set forth in
the Statement of Financial Accounting Standards No. 113 or any successor
thereto.
"SVO" shall mean the Securities Valuation Office of the NAIC.
"Taxes" is defined in SECTION 2.18(A).
"Terminating Senior Indebtedness" shall mean the indebtedness and
other monetary obligations of the Borrower under the Credit Agreement, dated as
of June 8, 1995, among the Borrower, the lenders named therein, the Agent and
the Co-Agent
"Total Capitalization" shall mean, with respect to the Borrower, as of
any date, the sum of (i) the amount of Consolidated Indebtedness as of such
date and (ii) the amount of Consolidated Net Worth as of such date.
"Total Adjusted Capital" shall mean, as to the Insurance Subsidiary,
as of any date, the amount shown on line 27, column 1 of the schedule of Five
Year Historical Data of the Annual Statement, or the amount determined in a
consistent manner for any date other than one as of which an Annual Statement
is prepared.
"Total Commitment" shall mean, at any time, the sum of the commitments
of each of the Lenders at such time, which shall not exceed $150,000,000, as
reduced from time to time pursuant to ARTICLE II hereof.
"Type" shall have the meaning given to such term in SECTION 2.1(C).
"Utilization Fee Rate" shall mean a rate equal to 0.050% that shall be
added to the Base Rate or Adjusted LIBOR Rate, as applicable, of Committed
Loans as provided in SECTION 2.9 at any time that the Loans outstanding exceed
50% of the Total Commitment (it being understood that the Utilization Fee Rate
shall not be added to the rate of interest otherwise applicable to Bid Loans.
"Welfare Plan" shall mean any "employee welfare benefit plan" as such
term is defined in ERISA, as to which the Borrower or its Subsidiaries has any
liability.
"Western National Life" shall mean Western National Life Insurance
Company, a Texas stock insurance corporation.
1.2 USE OF DEFINED TERMS. Unless otherwise defined or the context
otherwise requires, terms for which meanings are provided in this Credit
Agreement shall have such meanings when used in the schedules hereto, the Loan
Documents, the exhibits and any other communications delivered from time to
time in connection with this Credit Agreement.
1.3 CROSS REFERENCES; HEADINGS. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Credit Agreement or
in any of the Loan Documents shall refer to this Credit Agreement or such Loan
Document as a whole and not to any particular provision of this Credit
Agreement or such Loan Document. Section, schedule and exhibit references
contained in this Credit Agreement are references to sections, schedules and
exhibits in or to this Credit Agreement unless
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otherwise specified. Any reference in any section or definition to any clause
is, unless otherwise specified, to such clause of such section or definition.
The various headings in this Credit Agreement and the Loan Documents are
inserted for convenience only and shall not affect the meaning or
interpretation of this Credit Agreement or such Loan Document or any provision
hereof or thereof.
1.4 ACCOUNTING TERMS. Any accounting terms used in this Credit
Agreement that are not specifically defined shall have the meanings customarily
given them in accordance with Statutory Accounting Principles or if any such
term has no customary meaning under Statutory Accounting Principles, then such
term shall have the meaning customarily given it in accordance with Generally
Accepted Accounting Principles; provided, however, that, in the event that
changes in Statutory Accounting Principles shall be mandated by applicable
Governmental Authorities or the NAIC or changes in Generally Accepted
Accounting Principles shall be mandated by the Financial Accounting Standards
Board, or any similar accounting body of comparable standing, or any change in
accounting practices shall be recommended, by the Borrower's independent
certified public accountants, and to the extent that such changes would modify
or could modify such accounting terms or the interpretation or computation
thereof, such changes shall be followed in defining such accounting terms only
from and after the date the Borrower, the Agent and the Lenders shall have
amended this Credit Agreement to the extent necessary to reflect any such
changes in the financial covenants and other terms and conditions of this
Credit Agreement. References to amounts on particular exhibits, schedules,
lines, pages and columns of the Annual Statement are based on the format
promulgated by the NAIC for the 1994 Annual Statements. If such format is
changed in future years so that different information is contained in such
items or they no longer exist, it is understood that the reference is to
information consistent with that reported in the referenced item in the
Insurance Subsidiaries' 1994 Annual Statements.
1.5 OTHER DEFINITIONAL PROVISIONS. Unless the context otherwise
requires, words in the singular include the plural and words in the plural
include the singular. In addition, when used herein, the terms "best knowledge
of" or "to the best knowledge of" any Person shall mean matters within the
actual knowledge of such Person (or an executive officer or general partner of
such Person) or which should have been known by such Person after reasonable
inquiry.
ARTICLE II
REVOLVING CREDIT FACILITY
2.1 COMMITMENTS; LOANS. (a) Each Lender severally agrees,
subject to and on the terms and conditions of this Agreement, to make loans
(each, a "Committed Loan," and collectively, the "Committed Loans") to the
Borrower, from time to time on any Business Day during the period from and
including the Closing Date to but not including the Loan Termination Date, in
an aggregate principal amount at any time outstanding not exceeding its
Commitment at such time, provided that no Committed Borrowing shall be made if,
immediately after giving effect thereto, the sum of the aggregate principal
amount of Committed Loans outstanding at such time and the aggregate principal
amount of Bid Loans outstanding at such time would exceed the aggregate
Commitments at such time. Subject to and on the terms and conditions of this
Agreement, the Borrower may borrow, repay and reborrow Committed Loans.
(b) In addition to Committed Borrowings pursuant to subsection (a)
above, each Lender severally agrees that the Borrower may, subject to and on
the terms and conditions of this Agreement and
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as more particularly set forth in SECTION 2.3, request the Lenders to submit
offers to make loans (each, a "Bid Loan," and collectively, the "Bid Loans") to
the Borrower, from time to time on any Business Day during the period from and
including the Closing Date to but not including the earlier of (i) the date
that is one (1) Business Day prior to the seventh (7th) day prior to the
Maturity Date or (ii) the Loan Termination Date; provided, however, that the
Lenders may, but shall have no obligation to, submit such offers and the
Borrower may, but shall have no obligation to, accept any such offers; and
provided further that no Bid Borrowing shall be made if, immediately after
giving effect thereto, the sum of the aggregate principal amount of Bid Loans
outstanding at such time and the aggregate principal amount of Committed Loans
outstanding at such time would exceed the Total Commitment at such time.
(c) The Loans shall, at the option of the Borrower and subject to
the terms and conditions of this Agreement, be (i) in the case of Committed
Loans, either Base Rate Loans or LIBOR Committed Loans, or (ii) in the case of
Bid Loans, either Absolute Rate Loans or LIBOR Bid Loans (Base Rate Loans,
LIBOR Committed Loans, Absolute Rate Loans and LIBOR Bid Loans, each, a "Type"
of Loan), provided that all Loans comprising the same Borrowing shall, unless
otherwise specifically provided herein, be of the same Type.
2.2 COMMITTED BORROWINGS. (a) In order to make a Committed
Borrowing (other than Committed Borrowings involving continuations or
conversions of outstanding Committed Loans, which shall be requested pursuant
to SECTION 2.12), the Borrower will give the Agent written notice not later
than 12:00 noon, Charlotte time, three (3) Business Days prior to each
Committed Borrowing to be comprised of LIBOR Committed Loans and one (1)
Business Day prior to each Committed Borrowing to be comprised of Base Rate
Loans; provided, however, that the Borrower may, on the proposed Borrowing Date
for any Bid Borrowing of Absolute Rate Loans duly requested in accordance with
SECTION 2.3, give a request in accordance with this subsection (a) not later
than 12:00 noon, Charlotte time, for a Committed Borrowing on such date to be
comprised of Base Rate Loans. Each such notice (each, a "Notice of Committed
Borrowing") shall be irrevocable, shall be given in the form of EXHIBIT B-1 and
shall specify (a) the aggregate principal amount and initial Type of the
Committed Loans to be made pursuant to such Committed Borrowing, (b) in the
case of a Committed Borrowing of LIBOR Committed Loans, the initial Interest
Period to be applicable thereto, and (c) the requested Borrowing Date, which
shall be a Business Day. Notwithstanding anything to the contrary contained
herein:
(i) the aggregate principal amount of each Committed
Borrowing comprised of Base Rate Loans shall not be less than
$3,000,000 or, if greater, an integral multiple of $1,000,000 in
excess thereof (or, if less, in the amount of the Aggregate Unutilized
Commitments), and the aggregate principal amount of each Committed
Borrowing comprised of LIBOR Committed Loans shall not be less than
$3,000,000 or, if greater, an integral multiple of $1,000,000 in
excess thereof;
(ii) if the Borrower shall have failed to designate the
Type of Committed Loans comprising a Committed Borrowing, the Borrower
shall be deemed to have requested a Committed Borrowing comprised of
Base Rate Loans; and
(iii) if the Borrower shall have failed to select the
duration of the Interest Period to be applicable to any Committed
Borrowing of LIBOR Committed Loans, then the Borrower shall be deemed
to have selected an Interest Period with a duration of one month.
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(b) Upon its receipt of a Notice of Committed Borrowing, the Agent
will promptly notify each Lender of the proposed Committed Borrowing. Not later
than 2:00 p.m., Charlotte time, on the requested Borrowing Date, each Lender
will make available to the Agent at its office referred to in SECTION 11.5 (or
at such other location as the Agent may designate) an amount, in Dollars and in
immediately available funds, equal to the amount of the Committed Loan to be
made by such Lender. To the extent the Lenders have made such amounts available
to the Agent as provided hereinabove, the Agent will make the aggregate of such
amounts available to the Borrower by 3:30 p.m. Charlotte time in accordance with
SECTION 2.4(A) and in like funds as received by the Agent.
2.3 BID BORROWINGS. (a) In order to request the Lenders to
submit Bids to make Bid Loans hereunder, the Borrower will give the Agent
written notice not later than 11:00 a.m., Charlotte time, (y) five (5) Business
Days prior to the requested Bid Borrowing, in the case of a LIBOR Auction, or
(z) two (2) Business Days prior to the requested Bid Borrowing, in the case of
an Absolute Rate Auction. The Borrower may request offers to make Bid Loans
for up to three (3) separate Interest Periods in a single notice, and each such
request for offers for a separate Interest Period shall be deemed a request for
a separate Bid Borrowing. Each such notice (each, a "Bid Request") shall be
given in the form of EXHIBIT C-1 and shall specify, with respect to each
requested Bid Borrowing for a particular Interest Period:
(i) the Interest Period to be applicable to such Bid
Borrowing;
(ii) the aggregate amount of such requested Bid Borrowing,
which shall not (with respect to any single Interest Period) be less
than $10,000,000 or, if greater, an integral multiple of $5,000,000 in
excess thereof, but shall not cause the limits specified in SECTION
2.1(B) to be exceeded;
(iii) whether the Bid Borrowing requested for a particular
Interest Period is to be comprised of LIBOR Bid Loans or Absolute Rate
Loans; and
(iv) the requested Borrowing Date, which shall be a
Business Day;
PROVIDED, HOWEVER, that (x) no Interest Period applicable to any Bid Borrowing
shall expire on a date later than the first (1st) Business Day prior to the
Maturity Date, (y) the Borrower may not submit a Bid Request within five (5)
Business Days after the date of submission of any previous Bid Request, and (z)
no Bid Borrowing shall be made if, immediately after giving effect thereto,
there would be outstanding Bid Loans having more than four (4) separate
Interest Periods or outstanding LIBOR Committed Loans and Bid Loans together
having more than eight (8) separate Interest Periods (for which purpose
Interest Periods applicable to LIBOR Committed Loans and Interest Periods
applicable to Bid Loans shall be deemed to be separate Interest Periods even if
they are coterminous). A Bid Request not given in the form of EXHIBIT C-1 or
otherwise not given in compliance with the requirements of this subsection (a)
may be rejected by the Agent in its sole discretion, and the Agent shall
promptly notify the Borrower of any such rejection.
(b) Upon receipt of a Bid Request that is not rejected as
aforesaid, the Agent will promptly deliver to the Lenders a notice in
substantially the form of EXHIBIT C-2 (each such notice, an "Invitation for
Bids"), the delivery of which shall constitute an invitation by the Borrower to
each Lender to submit Bids, on the terms and subject to the conditions of this
Agreement, offering to make Bid Loans pursuant to such Bid Request.
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(c) Each Lender may, at its discretion, submit a Bid containing an
offer or offers to make Bid Loans in response to any Invitation for Bids;
provided that such Lender may submit a single Bid containing an offer or offers
to make up to three separate Bid Loans for each Interest Period specified in the
relevant Bid Request. Each Bid must comply with the requirements of this
subsection (c) and must be submitted to the Agent in writing (by facsimile
transmission or otherwise) not later than 10:30 a.m., Charlotte time, (y) three
(3) Business Days prior to the requested Borrowing Date, in the case of a LIBOR
Auction, or (z) on the requested Borrowing Date, in the case of an Absolute Rate
Auction; provided, however, that Bids submitted by the Agent (or any Affiliate
of the Agent) in its capacity as a Lender may be submitted only if the Agent or
such Affiliate notifies the Borrower of the terms of the offer or offers
contained therein not later than 10:15 a.m., Charlotte time, (y) three (3)
Business Days prior to the requested Bid Borrowing, in the case of a LIBOR
Auction, or (z) on the requested Borrowing Date, in the case of an Absolute Rate
Auction. Each Bid by a Lender shall (subject to the conditions of ARTICLE III
and SECTION 7.1) be irrevocable, shall be submitted in substantially the form of
EXHIBIT C-3 and shall specify:
(i) the identity of such Lender;
(ii) the Interest Period with respect to each Bid Loan for
which such Bid is being made;
(iii) with respect to each such Interest Period, the
principal amount of each Bid Loan for which such Bid is being made,
which principal amounts shall, in the aggregate with respect to each
such Interest Period, be not less than $10,000,000 or, if greater, in
an integral multiple of $5,000,000 in excess thereof, provided that
(y) the aggregate principal amount of all Bid Loans for which a Bid is
submitted may be equal to, greater than or less than the Commitment of
such Lender, and (z) the aggregate principal amount of all Bid Loans
offered by such Lender for a single Interest Period shall not exceed
the requested principal amount of the Bid Borrowing for such Interest
Period;
(iv) in the case of a LIBOR Auction, the margin above or
below the applicable LIBOR Rate (the "LIBOR Bid Margin") offered for
each such Bid Loan, expressed as a percentage (rounded to the nearest
1/1000 of 1%) to be added to or subtracted from the applicable LIBOR
Rate;
(v) in the case of an Absolute Rate Auction, the fixed
rate of interest per annum (rounded to the nearest 1/1000th of 1%)
offered for each such Bid Loan (the "Absolute Rate"); and
(vi) the proposed Borrowing Date.
A Bid shall be disregarded by the Agent if it (w) is not given substantially in
the form of EXHIBIT C-3 or fails to specify all of the information required by
this subsection (c), (x) contains qualifying, conditional or similar language,
(y) proposes terms other than or in addition to those set forth in the
applicable Invitation for Bids (other than setting forth separate offers for
any Interest Period as contemplated by the preceding sentence), or (z) is
submitted to the Agent after 10:30 a.m., Charlotte time, (i) three (3) Business
Days prior to the requested Borrowing Date, in the case of a LIBOR Auction, or
(ii) on the requested Borrowing Date, in the case of an Absolute Rate Auction.
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(d) Promptly upon receipt thereof and in any event not later than
11:00 a.m., Charlotte time, (y) three (3) Business Days prior to the requested
Borrowing Date, in the case of a LIBOR Auction, or (z) on the requested
Borrowing Date, in the case of an Absolute Rate Auction, the Agent will notify
the Borrower of the terms (i) of each Bid, if any, submitted by a Lender in
compliance with the provisions of subsection (c) above, and (ii) of each Bid, if
any, submitted by a Lender that amends, modifies or is otherwise inconsistent
with a previous Bid submitted by such Lender with respect to the same Bid
Request. Any such subsequent Bid shall be disregarded by the Agent unless such
subsequent Bid is submitted solely to correct a manifest error in such former
Bid and is timely received as provided in subsection (c) above. The Agent's
notice to the Borrower shall specify the aggregate principal amount of each Bid
Borrowing in respect of which Bids were made for each Interest Period specified
in the relevant Bid Request, the respective principal amounts and LIBOR Bid
Margins or Absolute Rates, as the case may be, so offered, and the identity of
the Lender that made each such Bid.
(e) Not later than 11:30 a.m., Charlotte time, (y) three (3)
Business Days prior to the requested Borrowing Date, in the case of a LIBOR
Auction, or (z) on the requested Borrowing Date, in the case of an Absolute
Rate Auction, the Borrower will notify the Agent of its acceptance or rejection
of the offers referred to in subsection (d) above. The Borrower shall be under
no obligation to accept any offer and may choose to reject all offers, provided
that the failure by the Borrower to give such notice in a timely manner shall
be deemed to constitute a rejection of all Bids. In the case of acceptance,
such notice shall specify the aggregate principal amount of offers for each
Interest Period that are accepted. The Borrower may accept any Bid in whole or
in part, subject to the limitations on the aggregate outstanding principal
amount of Bid Loans set forth in SECTION 2.1(B) and provided that:
(i) the aggregate principal amount of each Bid Borrowing
with regard to each Interest Period shall not exceed the applicable
amount set forth in the related Bid Request;
(ii) the aggregate principal amount of each Bid Borrowing
shall not be less than $10,000,000 or, if greater, an integral
multiple of $5,000,000 in excess thereof (subject to the provisions of
clause (v) below);
(iii) acceptance of Bids may be made only on the basis of
ascending (i.e., from the lowest effective yield to the highest) LIBOR
Bid Margins or Absolute Rates within each Interest Period, as the case
may be;
(iv) the Borrower may not accept any Bid that is required
to be disregarded under the provisions of subsection (c) above or that
otherwise fails to comply with the terms and conditions of this
SECTION 2.3; and
(v) if offers are made by two or more Lenders with the
same LIBOR Bid Margins or Absolute Rates, as the case may be, for a
greater aggregate principal amount than the amount in respect of which
such offers are permitted to be accepted for the related Interest
Period, then if the Borrower elects to accept any such offers, the
aggregate principal amount of Bid Loans in respect of which such
offers are accepted shall be allocated by the Borrower among such
Lenders (after consultation with the Agent) as nearly as practicable
(in such integral multiples of not less than $1,000,000 as the
Borrower, after consultation with the Agent, may deem appropriate) in
proportion to the respective aggregate principal amounts of such
offers. Determinations by the Borrower and the Agent of the amounts
of Bid Loans shall be conclusive absent manifest error.
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(f) The Agent will promptly notify each Lender having submitted a
Bid whether its offer has been accepted or rejected (and if accepted, with
regard to each applicable Interest Period, of the amount and Absolute Rate or
LIBOR Bid Margin, as the case may be). Not later than 2:00 p.m., Charlotte
time, on the requested Borrowing Date, each Lender that has received such
notice will make available to the Agent at its office referred to in SECTION
11.5 (or at such other location as the Agent may designate) an amount, in
Dollars and in immediately available funds, equal to the amount of the Bid Loan
or Bid Loans required to be made by such Lender. To the extent the relevant
Lenders have made such amounts available to the Agent as provided hereinabove,
the Agent will make the aggregate of such amounts available to the Borrower by
3:30 p.m. Charlotte time in accordance with SECTION 2.4(A) and in like funds as
received by the Agent.
(g) In respect of each Bid Request received by the Agent hereunder
(regardless of whether any Bid Loans shall be offered or made in response
thereto), the Borrower will pay to the Agent, on the date of receipt by the
Agent of such Bid Request, a fee in the amount set forth in paragraph (ii) of
the Fee Letter.
2.4 DISBURSEMENTS; FUNDING RELIANCE; DOMICILE OF LOANS. (a) The
Borrower hereby authorizes the Agent to disburse the proceeds of each Borrowing
in accordance with the terms of any written instructions from any of the
Authorized Officers, provided that the Agent shall not be obligated under any
circumstances to forward amounts to any account not listed in an Account
Designation Letter. The Borrower may at any time deliver to the Agent an
Account Designation Letter listing any additional accounts or deleting any
accounts listed in a previous Account Designation Letter.
(b) Unless the Agent has received, prior to 2:00 p.m., Charlotte
time, on the relevant Borrowing Date, written notice from a Lender that such
Lender will not make available to the Agent such Lender's ratable portion, if
any, of the relevant Borrowing, the Agent may assume that such Lender has made
such portion available to the Agent in immediately available funds on such
Borrowing Date in accordance with the relevant provisions of SECTION 2.2 or
SECTION 2.3, as applicable, and the Agent may, in reliance upon such
assumption, but shall not be obligated to, make a corresponding amount
available to the Borrower on such Borrowing Date. If and to the extent that
such Lender shall not have made such portion available to the Agent, and the
Agent shall have made such corresponding amount available to the Borrower, such
Lender, on the one hand, and the Borrower, on the other, severally agree to pay
to the Agent forthwith on demand such corresponding amount, together with
interest thereon for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Agent, (i) in the case
of such Lender, at the Federal Funds Rate, and (ii) in the case of the
Borrower, at the rate of interest applicable at such time to Loans comprising
such Borrowing, as determined under the provisions of SECTION 2.9. If such
Lender shall repay to the Agent such corresponding amount, such amount shall
constitute such Lender's Loan as part of such Borrowing for purposes of this
Agreement. The failure of any Lender to make any Loan required to be made by
it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Loan as part of such Borrowing, but
no Lender shall be responsible for the failure of any other Lender to make the
Loan to be made by such other Lender as part of any Borrowing.
(c) Each Lender may, at its option, make and maintain any Loan at,
to or for the account of any of its Lending Offices, PROVIDED that any exercise
of such option shall not affect the obligation of the
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Borrower to repay such Loan to or for the account of such Lender in accordance
with the terms of this Agreement.
2.5 NOTES. (a) The Loans made by each Lender shall be evidenced
(i) in the case of Committed Loans, by a Committed Loan Note appropriately
completed in substantially the form of EXHIBIT A-1, and (ii) in the case of Bid
Loans, by a Bid Loan Note appropriately completed in substantially the form of
EXHIBIT A-2.
(b) Each Committed Loan Note issued to a Lender shall (i) be
executed by the Borrower, (ii) be payable to the order of such Lender, (iii) be
dated as of the Closing Date, (iv) be in a stated principal amount equal to
such Lender's Commitment, (v) bear interest in accordance with the provisions
of SECTION 2.9, as the same may be applicable to the Committed Loans made by
such Lender from time to time, and (vi) be entitled to all of the benefits of
this Agreement and the other Loan Documents and subject to the provisions
hereof and thereof.
(c) Each Bid Loan Note issued to a Lender shall (i) be executed by
the Borrower, (ii) be payable to the order of such Lender, (iii) be dated as of
the Closing Date, (iv) be in a stated principal amount equal to the Total
Commitment, (v) bear interest in accordance with the provisions of SECTION 2.9,
as the same may be applicable to the Bid Loans made by such Lender from time to
time, and (vi) be entitled to all of the benefits of this Agreement and the
other Loan Documents and subject to the provisions hereof and thereof.
(d) Each Lender will record on its internal records the amount of
each Loan made by it and each payment received by it in respect thereof and
will, in the event of any transfer of any of its Notes, either endorse on the
reverse side thereof or on a schedule attached thereto (or any continuation
thereof) the outstanding principal amount of the Loans evidenced thereby as of
the date of transfer or provide such information on a schedule to the
Assignment and Acceptance relating to such transfer; provided, however, that
the failure of any Lender to make any such recordation or provide any such
information, or any error therein, shall not affect the Borrower's obligations
under this Agreement or the Notes.
2.6 TERMINATION AND REDUCTION OF COMMITMENTS. (a) The
Commitments shall be automatically and permanently terminated on the Maturity
Date unless sooner terminated pursuant to subsection (b) below or SECTION 8.1.
(b) At any time and from time to time after the date hereof, upon
not less than five (5) Business Days' prior written notice to the Agent, the
Borrower may terminate in whole or reduce in part the Aggregate Unutilized
Commitments, provided that any such partial reduction shall be in an aggregate
amount of not less than $10,000,000 or, if greater, an integral multiple
thereof. Promptly upon receipt of such notice, the Agent shall provide the
Lenders a copy thereof. The amount of any termination or reduction made under
this subsection (b) may not thereafter be reinstated. Each reduction of the
Commitments pursuant to this subsection (b) shall be applied ratably among the
Lenders according to their respective Commitments.
2.7 MANDATORY PAYMENT AND PREPAYMENT. (a) Except to the extent
due or made sooner pursuant to the provisions of this Agreement, (i) the
Borrower will repay the aggregate outstanding principal amount of the Committed
Loans in full on the Maturity Date, and (ii) the Borrower will repay each Bid
Loan on the last day of the Interest Period applicable thereto.
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(b) In the event that, at any time, the sum of the aggregate
principal amount of Committed Loans outstanding at such time and the aggregate
principal amount of Bid Loans outstanding at such time shall exceed the
aggregate Commitments at such time (after giving effect to any concurrent
termination or reduction thereof), the Borrower will immediately prepay the
outstanding principal amount of the Loans in the amount of such excess. Each
such prepayment shall be applied (i) first, to the outstanding principal amount
of the Committed Loans, and (ii) second, to the outstanding principal amount of
the Bid Loans, ratably among the Lenders holding Bid Loans in proportion to the
aggregate principal amount of Bid Loans held by each.
(c) Each payment or prepayment of a LIBOR Committed Loan or a Bid
Loan made pursuant to the provisions of this SECTION 2.7 on a day other than
the last day of the Interest Period applicable thereto shall be made together
with all amounts required under SECTION 2.19 to be paid as a consequence
thereof.
2.8 VOLUNTARY PREPAYMENT. (a) At any time and from time to time,
the Borrower shall have the right to prepay the Committed Loans, in whole or in
part, without premium or penalty (except as provided in clause (iii) below),
upon written notice to the Agent given not later than 11:00 a.m., Charlotte
time, three (3) Business Days prior to each intended prepayment of LIBOR
Committed Loans and one (1) Business Day prior to each intended prepayment of
Base Rate Loans, PROVIDED that (i) each partial prepayment shall be in an
aggregate principal amount of not less than $3,000,000 or, if greater, an
integral multiple of $1,000,000 in excess thereof, (ii) no partial prepayment
of LIBOR Committed Loans made pursuant to any single Committed Borrowing shall
reduce the aggregate outstanding principal amount of the remaining LIBOR
Committed Loans under such Committed Borrowing to less than $3,000,000 or to
any greater amount not an integral multiple of $1,000,000 in excess thereof,
and (iii) unless made together with all amounts required under SECTION 2.19 to
be paid as a consequence of such prepayment, a prepayment of a LIBOR Committed
Loan may be made only on the last day of the Interest Period applicable
thereto. Each such notice shall specify the proposed date of such prepayment
and the aggregate principal amount and the Types of the Committed Loans to be
prepaid (and, in the case of LIBOR Committed Loans, the specific Committed
Borrowing or Borrowings pursuant to which made) and shall be irrevocable and
shall bind the Borrower to make such prepayment on the terms specified therein.
Promptly upon receipt of such notice, the Agent shall provide the Lenders a
copy thereof. Amounts prepaid pursuant to this subsection (a) may be
reborrowed, subject to the terms and conditions of this Agreement.
(b) The Borrower shall have the right to prepay the Bid Loans on a
date other than the last day of the Interest Period applicable thereto,
provided that any such prepayment shall be made together with all amounts
required under SECTION 2.19 to be paid as a consequence thereof.
2.9 INTEREST. (a) The Borrower will pay interest in respect of
the unpaid principal amount of each Loan, from the date of Borrowing thereof
until such principal amount shall be paid in full:
(i) in respect of each Committed Loan, (y) at the Base
Rate, as in effect from time to time during such periods as such
Committed Loan is a Base Rate Loan, and (z) at a rate per annum equal
to the Adjusted LIBOR Rate, as in effect from time to time during such
periods as such Committed Loan is a LIBOR Committed Loan, plus, in
either case, the Utilization Fee Rate, if applicable; and
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(ii) in respect of each Bid Loan, (y) at the applicable
Absolute Rate established in accordance with the provisions of SECTION
2.3, if such Loan is an Absolute Rate Loan, and (z) at a rate per annum
equal to the LIBOR Rate, as in effect from time to time during the
applicable Interest Period, plus (or minus) the applicable LIBOR Bid
Margin, if such Loan is a LIBOR Bid Loan.
(b) Any principal amounts of the Loans not paid when due and, to
the greatest extent permitted by law, all interest accrued on the Loans and all
other fees and amounts hereunder not paid when due (whether at maturity,
pursuant to acceleration or otherwise), shall bear interest at a rate per annum
equal to the interest rate applicable under subsection (a) above from time to
time thereafter to such Loans plus 2% (or, in the case of fees and other
amounts, at the Base Rate plus 2%), and, in each case, such default interest
shall be payable on demand. To the greatest extent permitted by law, interest
shall continue to accrue after the filing by or against the Borrower of any
petition seeking any relief in bankruptcy or under any law pertaining to
insolvency or debtor relief.
(c) Accrued (and theretofore unpaid) interest shall be payable as
follows:
(i) in respect of each Base Rate Loan (including any Base
Rate Loan or portion thereof paid or prepaid pursuant to the
provisions of SECTION 2.7 or SECTION 2.8, except as provided
hereinbelow), in arrears on the last Business Day of each calendar
quarter; PROVIDED, that in the event the Committed Loans are repaid or
prepaid in full and the Commitments have been terminated, then accrued
interest in respect of all Base Rate Loans shall be payable together
with such repayment or prepayment on the date thereof;
(ii) in respect of each LIBOR Committed Loan (including
any LIBOR Committed Loan or portion thereof paid or prepaid pursuant
to the provisions of SECTION 2.7 or SECTION 2.8, except as provided
hereinbelow), in arrears (y) on the last Business Day of the Interest
Period applicable thereto (subject to the provisions of clause (iv) in
SECTION 2.11) and (z) in the case of a LIBOR Committed Loan having an
Interest Period of six months, on the date three months after the
first day of such Interest Period; provided, that in the event all
LIBOR Committed Loans made pursuant to a single Committed Borrowing
are repaid or prepaid in full, then accrued interest in respect of
such LIBOR Committed Loans shall be payable together with such
repayment or prepayment on the date thereof;
(iii) in respect of each Bid Loan, (1) in arrears on the
last day of the Interest Period applicable thereto, and (2) on the
date of any repayment or prepayment thereof in full; and
(iv) in respect of any Loan, at maturity (whether pursuant
to acceleration or otherwise) and, after maturity, on demand.
(d) Nothing contained in this Agreement or in any other Loan
Document shall be deemed to establish or require the payment of interest to any
Lender at a rate in excess of the maximum rate permitted by applicable law. If
the amount of interest payable for the account of any Lender on any interest
payment date would exceed the maximum amount permitted by applicable law to be
charged by such Lender, the amount of interest payable for its account on such
interest payment date shall be automatically reduced to such maximum
permissible amount. In the event of any such reduction affecting any Lender,
if from time to time thereafter the amount of interest payable for the account
of such Lender on any interest payment
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date would be less than the maximum amount permitted by applicable law to be
charged by such Lender, then the amount of interest payable for its account on
such subsequent interest payment date shall be automatically increased to such
maximum permissible amount, provided that at no time shall the aggregate amount
by which interest paid for the account of any Lender has been increased pursuant
to this sentence exceed the aggregate amount by which interest paid for its
account has theretofore been reduced pursuant to the previous sentence.
(e) Although it is the express intention of this Agreement that
the laws of the State of Texas shall not apply hereto, solely in the event that
a court applies Texas law with respect to interest or usury, and
notwithstanding anything to the contrary herein or in any other Loan Document,
the following provisions shall apply: (i) the aggregate of all consideration
which constitutes interest that is contracted for, taken, reserved, charged or
received under the Loan Documents or otherwise in connection with the
Obligations shall under no circumstances exceed the maximum amount allowed by
such applicable law, (ii) in the event that the maturity of the Obligations is
accelerated for any reason, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest may never include
more than such maximum amount and (iii) excess interest, if any, provided for
in this Agreement or otherwise shall be cancelled automatically and, if
theretofore paid, shall be credited by the Lenders on the principal amount of
the Obligations (or, to the extent that the principal amount of the Obligations
shall have been or would thereby be paid in full, refunded by the Lenders to
the Borrower). The right to accelerate the maturity of the Obligations does
not include the right to accelerate any interest which has not otherwise
accrued on the date of such acceleration, and the Lenders do not intend to
collect any unearned interest in the event of acceleration. All sums paid or
agreed to be paid to the Lenders for the use, forbearance or detention of sums
included in the Obligations shall, to the extent permitted by applicable law,
be amortized, prorated, allocated and spread throughout the full term of the
Obligations until payment in full so that the rate or amount of interest on
account of the Obligations does not exceed the applicable usury ceiling, if
any. To the extent that Article 5069-1.04 of the Texas Revised Civil Statutes
is relevant to the Lenders for the purpose of determining the highest lawful
interest rate, the Lenders hereby elect to determine the applicable rate
ceiling under such Article by the indicated (weekly) rate ceiling from time to
time in effect, subject to the Lenders' right subsequently to change such
methods in accordance with applicable law. In no event shall Article 5069,
Chapter 15 of the Texas Revised Civil Statutes apply to the Notes or this
Agreement.
(f) The Agent shall promptly notify the Borrower and the Lenders
upon determining the interest rate for each Committed Borrowing of LIBOR
Committed Loans after its receipt of the relevant Notice of Committed Borrowing
or Notice of Conversion/Continuation; PROVIDED, HOWEVER, that the failure of
the Agent to provide the Borrower or the Lenders with any such notice shall
neither affect any obligations of the Borrower or the Lenders hereunder nor
result in any liability on the part of the Agent to the Borrower or any Lender.
Each such determination (including each determination of the Reserve
Requirement) shall, absent manifest error, be final and conclusive and binding
on all parties hereto.
2.10 FEES. The Borrower agrees to pay:
(a) To the Agent, for the account of each Lender, a facility fee
for the period from the earlier of (i) the date of the initial Borrowing
hereunder or (ii) February 27, 1997 to the Loan Termination Date, at the
Facility Fee Rate on the average daily Commitment of such Lender (whether or
not used), payable in arrears (y) on the last Business Day of each calendar
quarter and (z) on the Loan Termination Date; and
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(b) To the Agent, for its own account, the annual administrative
fee described in paragraph (ii) of the Fee Letter, on the terms, in the amount
and at the times set forth therein.
2.11 INTEREST PERIODS. Concurrently with the giving of a Notice
of Committed Borrowing or Notice of Conversion/Continuation in respect of any
Committed Borrowing comprised of LIBOR Committed Loans, and concurrently with
the giving of a Bid Request in respect of any requested Bid Loans, the Borrower
shall have the right to elect, pursuant to such notice, the interest period
(each, an "Interest Period") to be applicable to such LIBOR Committed Loans or
Bid Loans, as the case may be, which Interest Period (x) in the case of any
LIBOR Committed Loan and at the option of the Borrower, shall be a one, two,
three or six-month period commencing on the date of the Borrowing of such LIBOR
Committed Loan (including the date of any continuation of, or conversion into,
such LIBOR Committed Loan) and (as to any successive Interest Period applicable
to such LIBOR Committed Loan) on the day on which the next preceding Interest
Period applicable thereto expires, (y) in the case of any LIBOR Bid Loan and as
agreed to by the Borrower and the Lender making such LIBOR Bid Loan, shall be a
one, two or three-month period commencing on the date of the Borrowing of such
LIBOR Bid Loan, or (z) in the case of any Absolute Rate Loan and as agreed to
by the Borrower and the Lender making such Absolute Rate Loan, shall be a
period of not less than seven (7) nor more than ninety (90) days commencing on
the date of the Borrowing of such Absolute Rate Loan; PROVIDED, HOWEVER, that:
(i) all LIBOR Loans comprising a single Borrowing shall
at all times have the same Interest Period;
(ii) the Borrower may not select any Interest Period that
expires after the Maturity Date;
(iii) Bid Loans may not be outstanding under more than
three (3) separate Interest Periods at any one time, and LIBOR
Committed Loans and Bid Loans together may not be outstanding under
more than seven (7) separate Interest Periods at any one time (for
which purpose Interest Periods applicable to LIBOR Committed Loans and
Interest Periods applicable to Bid Loans shall be deemed to be
separate Interest Periods even if they are coterminous);
(iv) if any Interest Period otherwise would expire on a
day that is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day, PROVIDED that, in the case of an
Interest Period applicable to LIBOR Loans, if such next succeeding
Business Day falls in another calendar month, then such Interest
Period shall expire on the next preceding Business Day;
(v) if any Interest Period applicable to LIBOR Loans
begins on a day for which there is no numerically corresponding day in
the calendar month during which such Interest Period would otherwise
expire, such Interest Period shall expire on the last Business Day of
such calendar month; and
(vi) if, upon the expiration of any Interest Period
applicable to LIBOR Committed Loans, the Borrower shall have failed to
elect a new Interest Period to be applicable to such LIBOR Committed
Loans, then the Borrower shall be deemed to have elected to convert
such LIBOR Committed Loans into Base Rate Loans as of the expiration
of the then current Interest Period applicable thereto.
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2.12 CONVERSIONS AND CONTINUATIONS. (a) The Borrower shall have the
right on any Business Day to elect (i) to convert all or a portion of the
outstanding principal amount of any Base Rate Loans into LIBOR Committed Loans,
or to convert any LIBOR Committed Loans the Interest Periods for which end on
the same day into Base Rate Loans, or (ii) to continue all or a portion of the
outstanding principal amount of any LIBOR Committed Loans the Interest Periods
for which end on the same day for an additional Interest Period, PROVIDED that
(x) any such conversion or continuation shall involve an aggregate principal
amount of not less than $3,000,000 or, if greater, an integral multiple of
$1,000,000 in excess thereof, and no partial conversion of LIBOR Committed Loans
made pursuant to a single Borrowing shall reduce the outstanding principal
amount of such LIBOR Committed Loans to less than $3,000,000 or to any greater
amount not an integral multiple of $1,000,000 in excess thereof, (y) except as
otherwise provided in SECTION 2.17(D), LIBOR Committed Loans may be converted
into Base Rate Loans only on the last day of the Interest Period applicable
thereto (and, in any event, if a LIBOR Committed Loan is converted into a Base
Rate Loan on any day other than the last day of the Interest Period applicable
thereto, the Borrower will pay, upon such conversion, all amounts required under
SECTION 2.19 to be paid as a consequence thereof) and (z) no conversion of Base
Rate Loans into LIBOR Committed Loans or continuation of LIBOR Committed Loans
shall be permitted during the continuance of a Default or Event of Default.
(b) The Borrower shall make each such election by giving the
Agent written notice not later than 12:00 noon, Charlotte time, three (3)
Business Days prior to the effective date of any conversion of Base Rate Loans
into, or continuation of, LIBOR Committed Loans and one (1) Business Day prior
to the effective date of any conversion of LIBOR Committed Loans into Base Rate
Loans. Each such notice (each, a "Notice of Conversion/Continuation") shall be
irrevocable, shall be given in the form of EXHIBIT B-2 and shall specify (x)
the date of such conversion or continuation (which shall be a Business Day),
(y) in the case of a conversion into, or a continuation of, LIBOR Committed
Loans, the Interest Period to be applicable thereto, and (z) the aggregate
amount and Type of the Loans being converted or continued. Upon the receipt of
a Notice of Conversion/Continuation, the Agent will promptly notify each Lender
of the proposed conversion or continuation. In the event that the Borrower
shall fail to deliver a Notice of Conversion/Continuation as provided herein
with respect to any outstanding LIBOR Committed Loans, such LIBOR Committed
Loans shall automatically be converted to Base Rate Loans upon the expiration
of the then current Interest Period applicable thereto (unless repaid pursuant
to the terms hereof).
2.13 METHOD OF PAYMENTS; COMPUTATIONS. (a) All payments by the
Borrower hereunder shall be made without setoff, counterclaim or other defense,
in Dollars and in immediately available funds to the Agent, for the account of
the Lenders (except as otherwise expressly provided herein as to payments
required to be made directly to the Lenders) at its office referred to in
SECTION 11.5, prior to 12:00 noon, Charlotte time, on the date payment is due.
Any payment made as required hereinabove, but after 12:00 noon, Charlotte time,
shall be deemed to have been made on the next succeeding Business Day. If any
payment falls due on a day that is not a Business Day, then such due date shall
be extended to the next succeeding Business Day (except that in the case of
LIBOR Loans to which the proviso of clause (iv) in SECTION 2.11 is applicable,
such due date shall be the next preceding Business Day), and such extension of
time shall then be included in the computation of payment of interest, fees or
other applicable amounts.
(b) The Agent will distribute to the Lenders like amounts
relating to payments made to the Agent for the account of the Lenders as
follows: (i) if the payment is received by 12:00 noon, Charlotte time, in
immediately available funds, the Agent will make available to each relevant
Lender on the same date, by wire transfer of immediately available funds, such
Lender's ratable share of such payment (based
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on the percentage that the amount of the relevant payment owing to such Lender
bears to the total amount of such payment owing to all of the relevant
Lenders), and (ii) if such payment is received after 12:00 noon, Charlotte
time, or in other than immediately available funds, the Agent will make
available to each such Lender its ratable share of such payment by wire
transfer of immediately available funds on the next succeeding Business Day (or
in the case of uncollected funds, as soon as practicable after collected). If
the Agent shall not have made a required distribution to the appropriate
Lenders as required hereinabove after receiving a payment for the account of
such Lenders, the Agent will pay to each such Lender, on demand, its ratable
share of such payment with interest thereon at the Federal Funds Rate for each
day from the date such amount was required to be disbursed by the Agent until
the date repaid to such Lender.
(c) Unless the Agent shall have received written notice from the
Borrower prior to the date on which any payment is due to any Lender hereunder
that such payment will not be made in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date, and the Agent
may, in reliance on such assumption, but shall not be obligated to, cause to be
distributed to such Lender on such due date an amount equal to the amount then
due to such Lender. If and to the extent the Borrower shall not have so made
such payment in full to the Agent, and without limiting the obligation of the
Borrower to make such payment in accordance with the terms hereof, such Lender
shall repay to the Agent forthwith on demand such amount so distributed to such
Lender, together with interest thereon for each day from the date such amount
is so distributed to such Lender until the date repaid to the Agent, at the
Federal Funds Rate.
(d) Each Lender for whose account any payment is to be made
hereunder may, but shall not be obligated to, debit the amount of any such
payment not made as and when required hereunder to any ordinary deposit account
of the Borrower with such Lender (with prompt notice to the Agent and the
Borrower); PROVIDED, HOWEVER, that the failure to give such notice shall not
affect the validity of such debit by such Lender.
(e) With respect to each payment hereunder, except as
specifically provided otherwise herein or in any of the other Loan Documents,
the Borrower may designate by written notice to the Agent prior to or
concurrently with such payment the specific Loans or other Obligations that are
to be paid, repaid or prepaid, PROVIDED that (i) unless made together with all
amounts required under SECTION 2.19 to be paid as a consequence thereof, a
prepayment of a LIBOR Committed Loan or a Bid Loan may be made only on the last
day of the Interest Period applicable thereto, and (ii) each payment on account
of any Obligations to or for the account of any one or more Lenders shall be
apportioned ratably among such Lenders in proportion to the amounts of such
Obligations owed to them respectively. In the absence of any such designation
by the Borrower, or if an Event of Default has occurred and is continuing, the
Agent shall make such designation in its sole discretion or as the Required
Lenders may direct, subject to the foregoing and to the other provisions of
this Agreement.
(f) All computations of interest and fees hereunder (including
computations of the Reserve Requirement) shall be made on the basis of a year
consisting of 365 days and the actual number of days (including the first day,
but excluding the last day) elapsed; PROVIDED that interest on LIBOR Loans
shall be computed on the basis of a 360-day year and the actual days elapsed.
2.14 RECOVERY OF PAYMENTS. (a) The Borrower agrees that to the
extent the Borrower makes a payment or payments to or for the account of the
Agent or any Lender, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required
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to be repaid to a trustee, receiver or any other party under any bankruptcy,
insolvency or similar state or federal law, common law or equitable cause,
then, to the extent of such payment or repayment, the Obligation intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been received.
(b) If any amounts distributed by the Agent to any Lender are
subsequently returned or repaid by the Agent to the Borrower or its
representative or successor in interest, whether by court order or by
settlement approved by the Lender in question, such Lender will, promptly upon
receipt of notice thereof from the Agent, pay the Agent such amount. If any
such amounts are recovered by the Agent from the Borrower or its representative
or successor in interest, the Agent will redistribute such amounts to the
Lenders on the same basis as such amounts were originally distributed.
2.15 USE OF PROCEEDS. The proceeds of the Loans shall be used
solely (i) to repay in full the Terminating Senior Indebtedness, (ii) to pay or
reimburse reasonable fees and expenses in connection with the consummation of
the transactions contemplated hereby, and (iii) for working capital and general
corporate purposes.
2.16 PRO RATA TREATMENT; SHARING OF PAYMENTS. (a) All fundings,
continuations and conversions of Committed Loans shall be made by the Lenders
pro rata on the basis of their respective Commitments (in the case of the
initial funding of Committed Loans pursuant to SECTION 2.2) or Committed Loans
(in the case of continuations and conversions of outstanding Committed Loans
pursuant to SECTION 2.12), as applicable from time to time.
(b) Each Lender agrees that if it shall receive any amount
hereunder (whether by voluntary payment, realization upon security, exercise of
the right of setoff or banker's lien, counterclaim or cross action, or
otherwise, other than pursuant to SECTIONS 10.1 or 10.2) applicable to the
payment of any of the Obligations that exceeds its ratable share (according to
the proportion of (i) the amount of such Obligations due and payable to such
Lender at such time to (ii) the aggregate amount of such Obligations due and
payable to all Lenders at such time) of payments on account of such Obligations
then or therewith obtained by all the Lenders to which such payments are
required to have been made, such Lender shall forthwith purchase from the other
Lenders such participations in such Obligations as shall be necessary to cause
such purchasing Lender to share the excess payment or other recovery ratably
with each of them; PROVIDED, HOWEVER, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each such other Lender shall be rescinded and each such other Lender shall
repay to the purchasing Lender the purchase price to the extent of such
recovery, together with an amount equal to such other Lender's ratable share
(according to the proportion of (i) the amount of such other Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to the provisions of
this subsection may, to the fullest extent permitted by law, exercise any and
all rights of payment (including, without limitation, setoff, banker's lien or
counterclaim) with respect to such participation as fully as if such
participant were a direct creditor of the Borrower in the amount of such
participation. If under any applicable bankruptcy, insolvency or similar law,
any Lender receives a secured claim in lieu of a setoff to which this
subsection applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this subsection to share in the benefits of any
recovery on such secured claim. If at any time any Lender having outstanding
both Committed Loans and Bid Loans exercises a right of
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setoff, such Lender shall apply the proceeds of such setoff first to its
Committed Loans until reduced to zero, and thereafter to its Bid Loans.
2.17 INCREASED COSTS; CHANGE IN CIRCUMSTANCES; Illegality; etc.
(a) If, at any time after the Closing Date and from time to time, the
introduction of or any change in any applicable law, rule or regulation or in
the interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof, or compliance by any
Lender with any guideline or request from any such Governmental Authority
(whether or not having the force of law), shall (i) subject such Lender to any
tax or other charge, or change the basis of taxation of payments to such
Lender, in respect of any of its LIBOR Committed Loans or Bid Loans or any
other amounts payable hereunder or its obligation to make, fund or maintain any
LIBOR Committed Loans or Bid Loans (other than any change in the rate or basis
of tax on the overall net income of such Lender or its applicable Lending
Office), (ii) impose, modify or deem applicable any reserve, special deposit or
similar requirement (other than as a result of any change in the Reserve
Requirement) against assets of, deposits with or for the account of, or credit
extended by, such Lender or its applicable Lending Office, or (iii) impose on
such Lender or its applicable Lending Office any other condition affecting its
LIBOR Committed Loans or Bid Loans, and the result of any of the foregoing
shall be to increase the cost to such Lender of making or maintaining any LIBOR
Committed Loans or Bid Loans or to reduce the amount of any sum received or
receivable by such Lender hereunder, the Borrower will, within fifteen (15)
days after delivery to the Borrower by such Lender of written demand therefor
(which shall set forth the basis for such demand in reasonable detail), pay to
such Lender such additional amounts as shall compensate such Lender for such
increase in costs or reduction in return.
(b) If, at any time after the Closing Date and from time to
time, any Lender shall have reasonably determined that the introduction of or
any change in any applicable law, rule or regulation regarding capital adequacy
or in the interpretation or administration thereof by any Governmental
Authority charged with the interpretation or administration thereof, or
compliance by such Lender with any guideline or request from any such
Governmental Authority (whether or not having the force of law), has or would
have the effect, as a consequence of such Lender's Commitment or Loans
hereunder, of reducing the rate of return on the capital of such Lender or any
Person controlling such Lender to a level below that which such Lender or
controlling Person could have achieved but for such introduction, change or
compliance (taking into account such Lender's or controlling Person's policies
with respect to capital adequacy), the Borrower will, within fifteen (15) days
after delivery to the Borrower by such Lender of written demand therefor (which
shall set forth the basis for such demand in reasonable detail), pay to such
Lender such additional amounts as will compensate such Lender or controlling
Person for such reduction in return.
(c) If, on or prior to the first day of any Interest Period, (y)
the Agent shall have determined that adequate and reasonable means do not exist
for ascertaining the applicable LIBOR Rate for such Interest Period or (z) the
Agent shall have received written notice from the Required Lenders of their
determination that the rate of interest referred to in the definition of "LIBOR
Rate" upon the basis of which the applicable interest rate for LIBOR Loans for
such Interest Period is to be determined will not adequately and fairly reflect
the cost to such Lenders of making or maintaining LIBOR Loans during such
Interest Period, the Agent will forthwith so notify the Borrower and the
Lenders. Upon such notice, (i) all then outstanding LIBOR Committed Loans
shall automatically, on the expiration date of the respective Interest Periods
applicable thereto (unless then repaid in full), be converted into Base Rate
Loans, (ii) the obligation of the Lenders to make LIBOR Bid Loans or to make,
to convert Base Rate Loans into, or to continue, LIBOR Committed Loans shall be
suspended (including pursuant to the Borrowing to which such
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Interest Period applies), and (iii) any Notice of Committed Borrowing, Bid
Request or Notice of Conversion/Continuation given at any time thereafter with
respect to LIBOR Loans shall be deemed to be a request for Base Rate Loans (or,
in the case of a Bid Borrowing, Absolute Rate Loans), in each case until the
Agent or the Required Lenders, as the case may be, shall have determined that
the circumstances giving rise to such suspension no longer exist (and the
Required Lenders, if making such determination, shall have so notified the
Agent), and the Agent shall have so notified the Borrower and the Lenders.
Notwithstanding the foregoing, the Agent and each Lender will take any
reasonable actions available to it (including designation of a different
Lending Office), consistent with legal and regulatory restrictions, that will
avoid the need to take the steps described in this subsection (c) and that will
not, in the reasonable judgment of the Agent or such Lender, be materially
disadvantageous to it.
(d) Notwithstanding any other provision in this Agreement, if,
at any time after the Closing Date and from time to time, any Lender shall have
determined in good faith that the introduction of or any change in any
applicable law, rule or regulation or in the interpretation or administration
thereof by any Governmental Authority charged with the interpretation or
administration thereof, or compliance with any guideline or request from any
such Governmental Authority (whether or not having the force of law), has or
would have the effect of making it unlawful for such Lender to make or to
continue to make or maintain LIBOR Loans, such Lender will forthwith so notify
the Agent and the Borrower. Upon such notice, (i) each of such Lender's then
outstanding LIBOR Committed Loans shall automatically, on the expiration date
of the respective Interest Period applicable thereto (or, to the extent any
such LIBOR Committed Loan may not lawfully be maintained as a LIBOR Committed
Loan until such expiration date, upon such notice), be converted into a Base
Rate Loan, (ii) the obligation of such Lender to make LIBOR Bid Loans or to
make, to convert Base Rate Loans into, or to continue, LIBOR Committed Loans
shall be suspended (including pursuant to any Borrowing for which the Agent has
received a Notice of Committed Borrowing or Bid Request but for which the
Borrowing Date has not arrived), and (iii) any Notice of Committed Borrowing,
Bid Request or Notice of Conversion/Continuation given at any time thereafter
with respect to LIBOR Loans shall, as to such Lender, be deemed to be a request
for a Base Rate Loan (or, in the case of a Bid Borrowing, an Absolute Rate
Loan), in each case until such Lender shall have determined that the
circumstances giving rise to such suspension no longer exist and shall have so
notified the Agent, and the Agent shall have so notified the Borrower.
Notwithstanding the foregoing, the Agent and each Lender will take any
reasonable actions available to it (including designation of a different
Lending Office), consistent with legal and regulatory restrictions, that will
avoid the need to take the steps described in this subsection (d) and that will
not, in the reasonable judgment of the Agent or such Lender, be materially
disadvantageous to it.
(e) Determinations by the Agent or any Lender for purposes of
this SECTION 2.17 of any increased costs, reduction in return, market
contingencies, illegality or any other matter shall, absent manifest error, be
conclusive, PROVIDED that such determinations are made in good faith. Nothing
in this SECTION 2.17 shall require or be construed to require the Borrower to
pay any interest, fees, costs or other amounts in excess of that permitted by
applicable law.
2.18 TAXES. (a) Any and all payments by the Borrower hereunder
or under any Note shall be made, in accordance with the terms hereof and
thereof, free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, other than net income and franchise taxes
imposed on the Agent or any Lender by the United States or by the jurisdiction
under the laws of which the Agent or such Lender, as the case may be, is
organized or in which its principal office or (in the case of a Lender) its
applicable Lending Office is
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located, or any political subdivision or taxing authority thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to the Agent or any Lender, (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this SECTION 2.18), the Agent or such Lender, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower will make such deductions, (iii) the Borrower will pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law and (iv) the Borrower will deliver to the
Agent or such Lender, as the case may be, evidence of such payment.
(b) The Borrower will indemnify the Agent and each Lender for
the full amount of Taxes (including, without limitation, any Taxes imposed by
any jurisdiction on amounts payable under this SECTION 2.18) paid by the Agent
or such Lender, as the case may be, and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or
not such Taxes were correctly or legally asserted. This indemnification shall
be made within 30 days from the date the Agent or such Lender, as the case may
be, makes written demand therefor.
(c) Each of the Agent and the Lenders agrees that if it
subsequently recovers, or receives a permanent net tax benefit with respect to,
any amount of Taxes (i) previously paid by it and as to which it has been
indemnified by or on behalf of the Borrower or (ii) previously deducted by the
Borrower (including, without limitation, any Taxes deducted from any additional
sums payable under clause (i) of subsection (a) above), the Agent or such
Lender, as the case may be, shall reimburse the Borrower to the extent of the
amount of any such recovery or permanent net tax benefit (but only to the
extent of indemnity payments made, or additional amounts paid, by or on behalf
of the Borrower under this SECTION 2.18 with respect to the Taxes giving rise
to such recovery or tax benefit); PROVIDED, HOWEVER, that the Borrower, upon
the request of the Agent or such Lender, agrees to repay to the Agent or such
Lender, as the case may be, the amount paid over to the Borrower (together with
any penalties, interest or other charges), in the event the Agent or such
Lender is required to repay such amount to the relevant taxing authority or
other Governmental Authority. The determination by the Agent or any Lender of
the amount of any such recovery or permanent net tax benefit shall, in the
absence of manifest error, be conclusive and binding.
(d) If any Lender is a "foreign corporation, partnership or
trust" within the meaning of the Internal Revenue Code, and such Lender claims
exemption from United States withholding tax under Section 1441 or 1442 of the
Internal Revenue Code, such Lender will deliver to each of the Agent and the
Borrower, on or prior to the date of any payment by the Borrower to such Lender
under this Agreement or the Notes, a properly completed Internal Revenue
Service Form 4224 or 1001, as applicable (or successor forms), certifying that
such Lender is entitled to an exemption from or a reduction of withholding or
deduction for or on account of United States federal income taxes in connection
with payments under this Agreement or any of the Notes, together with a
properly completed Internal Revenue Service Form W-8 or W-9, as applicable (or
successor forms). Each such Lender further agrees to deliver to each of the
Agent and the Borrower an additional copy of each such relevant form on or
before the date that such form expires (currently, three successive calendar
years for Form 1001 and one calendar year for Form 4224) or becomes obsolete or
after the occurrence of any event requiring a change in the most recent forms
so delivered by it, in each case certifying that such Lender is entitled to an
exemption from or a reduction of withholding or deduction for or on account of
United States federal income taxes in connection with payments under this
Agreement or any of the Notes, unless an event (including, without limitation,
any
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change in treaty, law or regulation) has occurred prior to the date on which
any such delivery would otherwise be required, which event renders all such
forms inapplicable or the exemption to which such forms relate unavailable and
such Lender notifies the Agent and the Borrower that it is not entitled to
receive payments without deduction or withholding of United States federal
income taxes. Each such Lender will promptly notify the Agent and the Borrower
of any changes in circumstances that would modify or render invalid any claimed
exemption or reduction.
(e) Any Lender claiming any additional amounts payable pursuant
to this Section shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document requested by the
Borrower or the Agent or to change the jurisdiction of its applicable Lending
Office or to contest any tax imposed if the making of such a filing or change
or contesting such tax would avoid the need for or reduce the amount of any
such additional amounts that may thereafter accrue and would not, in the sole
determination of such Lender, be otherwise disadvantageous to such Lender.
(f) If any Lender is entitled to a reduction in (and not a
complete exemption from) the applicable withholding tax, the Borrower and the
Agent may withhold from any interest payment to such Lender an amount
equivalent to the applicable withholding tax after taking into account such
reduction. If any of the forms or other documentation required under
subsection (d) above are not delivered to the Agent as therein required, then
the Borrower and the Agent may withhold from any interest payment to such
Lender not providing such forms or other documentation an amount equivalent to
the applicable withholding tax.
2.19 COMPENSATION. The Borrower will compensate each Lender,
upon its written request through the Agent (which request shall be accompanied
by a statement setting forth the basis for requesting such compensation in
reasonable detail and using the methodology set forth in EXHIBIT F), for all
losses, expenses and liabilities (including, without limitation, any loss,
expense or liability incurred by reason of the liquidation or reemployment of
deposits or other funds required by such Lender to fund or maintain LIBOR
Loans) that such Lender may incur or sustain (i) if for any reason (other than
a default by such Lender) a borrowing or continuation of, or conversion into, a
LIBOR Committed Loan, or a borrowing of a Bid Loan, does not occur on a date
specified therefor in a Notice of Committed Borrowing, Notice of
Conversion/Continuation or Bid Request, (ii) if any repayment, prepayment or
conversion of any LIBOR Committed Loan, or repayment of any Bid Loan, occurs on
a date other than the last day of an Interest Period applicable thereto
(including as a consequence of acceleration of the maturity of the Loans
pursuant to SECTION 8.1), (iii) if any prepayment of any LIBOR Committed Loan
or Bid Loan is not made on any date specified in a notice of prepayment given
by the Borrower or (iv) as a consequence of any other failure by the Borrower
to make any payments with respect to any LIBOR Committed Loan or Bid Loan when
due hereunder. Calculation of all amounts payable to a Lender under this
SECTION 2.19 in respect of LIBOR Loans shall be made as though such Lender had
actually funded its relevant LIBOR Loan through the purchase of a Eurodollar
deposit bearing interest at the LIBOR Rate in an amount equal to the amount of
such LIBOR Loan, having a maturity comparable to the relevant Interest Period;
PROVIDED, HOWEVER, that each Lender may fund its LIBOR Loans in any manner it
sees fit and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this SECTION 2.19. Determinations by any
Lender for purposes of this SECTION 2.19 of any such losses, expenses or
liabilities shall, absent manifest error, be conclusive, PROVIDED that such
determinations are made in good faith and in accordance with the methodology
set forth in EXHIBIT F.
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ARTICLE III
CONDITIONS OF CLOSING AND BORROWING
3.1 CONDITIONS OF CLOSING AND INITIAL BORROWING. The obligation
of each Lender to make Loans in connection with the initial Borrowing hereunder
is subject to the satisfaction of the following conditions precedent:
(a) The Agent shall have received Commitments from the Lenders
(in addition to the Commitment of First Union) to provide funds to the Borrower
in the amount of the Total Commitment and on the terms and conditions set forth
in the Loan Documents.
(b) The Agent shall have received the following, each dated as
of the Closing Date (unless otherwise specified) and, except for the Notes, in
sufficient copies for each Lender:
(i) a Committed Loan Note for each Lender that is a party
hereto as of the Closing Date in the amount of such Lender's
Commitment and duly completed and executed by the Borrower;
(ii) a Bid Loan Note for each Lender that is a party
hereto as of the Closing Date in the amount of the Total Commitment
and duly completed and executed by the Borrower;
(iii) a certificate, signed by the chief executive officer,
chief financial officer or a vice chairman of the Borrower, in form
and substance satisfactory to the Agent, certifying that, as of the
Closing Date and both immediately before and after the initial
Borrowing of Loans hereunder and the application of the proceeds
thereof, (A) all representations and warranties of the Borrower
contained in this Agreement and the other Loan Documents are true and
correct (B) no Default or Event of Default has occurred and is
continuing, (C) there are no insurance regulatory proceedings pending
or, to such individual's knowledge, threatened against the Insurance
Subsidiary in any jurisdiction that, if adversely determined, would be
reasonably likely to have a Material Adverse Effect, and (D) no
Material Adverse Change has occurred since December 31, 1995 (except
as may be disclosed in the Forms 10-K and 10-Q filed by the Borrower
for the periods ending December 31, 1995 through September 30, 1996),
and there exists no event, condition or state of facts that could
reasonably be expected to result in a Material Adverse Change;
(iv) a certificate of the secretary or an assistant
secretary of the Borrower, in form and substance satisfactory to the
Agent, certifying (A) that attached thereto is a true and complete
copy of the certificate of incorporation and all amendments thereto of
the Borrower, certified as of a recent date by the Secretary of State
of the State of Delaware, and that the same has not been amended since
the date of such certification, (B) that attached thereto is a true
and complete copy of the bylaws of the Borrower, as then in effect and
as in effect at all times from the date on which the resolutions
referred to in clause (C) below were adopted to and including the date
of such certificate and (C) that attached thereto is a true and
complete copy of the resolutions adopted by the board of directors of
the Borrower authorizing the execution, delivery and performance by
the Borrower of the Loan Documents to which it is a party, and as to
the incumbency and genuineness of the signature of each officer of the
Borrower executing any of such Loan Documents, and attaching all such
copies of the documents described above; and
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(v) a certificate of the secretary or an assistant
secretary of the Insurance Subsidiary, in form and substance
satisfactory to the Agent, certifying (A) that attached thereto is a
true and complete copy of the certificate of incorporation and all
amendments thereto of the Insurance Subsidiary, certified as of a
recent date by the Commissioner of the Texas Department of Insurance,
and that the same has not been amended since the date of such
certification and (B) that attached thereto is a true and complete
copy of the bylaws of the Insurance Subsidiary, as then in effect, and
attaching all such copies of the documents described above; and
(vi) favorable opinions of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice Chairman
and General Counsel of the Borrower, and ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.,
special counsel to the Borrower, addressed to the Agent and the
Lenders, in substantially the form of EXHIBIT G and addressing such
other matters as the Agent or any Lender may reasonably request.
(c) The Agent shall have received (i) a certificate as of a recent
date of the good standing of each of the Borrower Affiliates under the laws of
the jurisdictions of organization, from the Secretary of State (or comparable
Governmental Authority) of such jurisdiction, and (ii) as to each Insurance
Subsidiary, a certificate of compliance as of a recent date, issued by the
Insurance Regulatory Authority of its jurisdiction of domicile.
(d) All approvals, permits and consents of any Governmental
Authorities (including, without limitation, all relevant Insurance Regulatory
Authorities) or other Persons required in connection with the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby shall have been obtained (without the imposition of
conditions that are not reasonably acceptable to the Agent), and all related
filings, if any, shall have been made, and all such approvals, permits,
consents and filings shall be in full force and effect and the Agent shall have
received such copies thereof as it shall have requested; all applicable waiting
periods shall have expired without any adverse action being taken by any
Governmental Authority having jurisdiction; and no action, proceeding,
investigation, regulation or legislation shall have been instituted, threatened
or proposed before, and no order, injunction or decree shall have been entered
by, any court or other Governmental Authority, in each case to enjoin, restrain
or prohibit, to obtain substantial damages in respect of, or that is otherwise
related to or arises out of, this Agreement or the consummation of the
transactions contemplated hereby, or that, in the opinion of the Agent, would
otherwise be reasonably likely to have a Material Adverse Effect.
(e) Since December 31, 1995, both immediately before and after
giving effect to the consummation of the transactions contemplated by this
Agreement, there shall not have occurred any Material Adverse Change or any
event, condition or state of facts that could reasonably be expected to result
in a Material Adverse Change (except as may be disclosed in the Forms 10-K and
10-Q filed by the Borrower for the periods ending December 31, 1995 through
September 30, 1996).
(f) The Borrower shall have paid (i) to the Agent, the initial
payment of the annual administrative fee described in paragraph (ii) of the Fee
Letter, and (ii) all other fees and expenses of the Agent and the Lenders
required under this Agreement or under any other Loan Document to be paid on or
prior to the Closing Date (including fees and expenses of counsel) in
connection with this Agreement and the transactions contemplated thereby.
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(g) The Agent shall have received evidence satisfactory to it
that, concurrently with the making of the initial Loans hereunder, all
principal, interest and other amounts outstanding with respect to the
Terminating Senior Indebtedness shall be repaid and satisfied in full.
(h) The results of a search of all filings made against the
Borrower Affiliates under the Uniform Commercial Code as in effect in any state
in which any assets of the Borrower Affiliates are located which results shall
be satisfactory to the Lenders.
(i) There shall not have occurred and been continuing any event or
condition in the United States financial and capital markets that could
reasonably be expected to have a material adverse effect on the primary
syndication of the revolving credit facility provided for hereunder.
(j) The Agent shall have received an Account Designation Letter,
together with written instructions from an Authorized Officer of the Borrower,
including wire transfer information, directing the payment of the proceeds of
the initial Loans.
(k) The Agent and each Lender shall have received such other
documents, certificates, opinions and instruments as it shall have reasonably
requested.
3.2 CONDITIONS TO ALL LOANS. The obligation of each Lender to
make any Loans hereunder is subject to the satisfaction of the following
conditions precedent on the relevant Borrowing Date:
(a) The Agent shall have received a Notice of Committed Borrowing
in accordance with SECTION 2.2(A) or a Bid Request in accordance with SECTION
2.3(A), as applicable;
(b) Each of the representations and warranties contained in
ARTICLE IV and in the other Loan Documents shall be true and correct on and as
of the relevant Borrowing Date with the same effect as if made on and as of
such date, both immediately before and after giving effect to the Loans to be
made on such date (except to the extent any such representation or warranty is
expressly stated to have been made as of a specific date, in which case such
representation or warranty shall be true and correct as of such date); and
(c) No Default or Event of Default shall have occurred and be
continuing on such date, both immediately before and after giving effect to the
Loans to be made on such date.
Each giving of a Notice of Committed Borrowing or a Bid Request, and
the consummation of each Borrowing, shall be deemed to constitute a
representation by the Borrower that the statements contained in subsections (b)
and (c) above are true, both as of the date of such notice or request and as of
the relevant Borrowing Date.
3.3 WAIVER OF CONDITIONS PRECEDENT. If any Lender makes any Loan
hereunder prior to the fulfillment of any of the conditions precedent set forth
in this ARTICLE III, the making of such Loan shall constitute only an extension
of time for the fulfillment of such condition and not a waiver thereof, and
unless the Required Lenders indicate otherwise in writing, the Borrower shall
thereafter use its best efforts to fulfill each such condition promptly. No
failure by the Borrower to fulfill any such condition precedent shall
constitute a Default or an Event of Default hereunder, except to the extent any
such failure is
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continuing after the expiration of any period within which such condition is
specifically required to be fulfilled.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Credit Agreement and to make
the Loans, the Borrower makes the following warranties and representations to
the Agent and the Lenders, all of which shall be true and correct as of the
date hereof, the Closing Date and any other date on which any Loans are made
hereunder:
4.1 CORPORATE ORGANIZATION AND POWER. Each Borrower Affiliate (i)
is a corporation duly organized, validly existing and in good standing under
the laws of its state of incorporation, (ii) is duly qualified to do business
and in good standing in each jurisdiction where, because of the nature of its
activities or properties, such qualification is required, except where any
failure to comply herewith would not reasonably be expected to have a Material
Adverse Effect on such Borrower Affiliate, (iii) has the requisite corporate
power and authority and the right to own and operate its properties, to lease
the property it operates under lease, and to conduct its business as now and
proposed to be conducted and (iv) has obtained all material licenses, permits,
consents or approvals from or by, and has made all filings with, and given all
notices to, all Governmental Authorities having jurisdiction, to the extent
required for such ownership, operation and conduct (including, without
limitation, the consummation of the transactions contemplated by this Credit
Agreement and the other Loan Documents) as to each of the foregoing, except
where any failure to comply herewith would not reasonably be expected to have a
Material Adverse Effect on such Borrower Affiliate. The execution, delivery
and performance by the Borrower of each Loan Document and the consummation of
the transactions contemplated hereby and thereby are within its corporate
powers and have been duly authorized by all necessary corporate action
(including, without limitation, shareholder approval, if required). Each
Borrower Affiliate has received all material governmental and other consents
and approvals (if any shall be required) necessary for such execution, delivery
and performance of this Credit Agreement and the other Loan Documents, and such
execution, delivery and performance do not and will not contravene or conflict
with, or create a lien or right of termination or acceleration under, any
Requirement of Law or Contractual Obligation binding upon any Borrower
Affiliate. This Credit Agreement and each of the Loan Documents is (or when
executed and delivered will be) the legal, valid, and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally or by general equitable principles.
4.2 CERTAIN AGREEMENTS. There have been delivered to the Agent,
on behalf of each Lender, true, correct and complete copies of each of the
Credit Agreement, such Lender's Note, and each of the other Loan Documents and
any other material documents required to be delivered in connection therewith,
as amended to the date hereof, and all exhibits and schedules delivered in
connection therewith. Each of the Loan Documents existing as of the Closing
Date is in full force and effect, and the Borrower has performed all of its
material obligations thereunder required to be performed on or prior to the
date hereof.
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4.3 LITIGATION; GOVERNMENT REGULATION. No claim, litigation
(including, without limitation, derivative actions), arbitration, or
governmental investigation, proceeding or inquiry is pending or threatened
against the Borrower or any Subsidiary (i) that is reasonably expected to have
a Material Adverse Effect on any Borrower Affiliate or (ii) that relates to any
of the transactions contemplated hereby, and there is no basis known to the
Borrower for any of the foregoing. SCHEDULE 4.3 sets forth all material
claims, litigation, arbitration, and governmental investigations, proceedings
or inquiries pending or threatened against any Borrower Affiliate, and none of
such actions, individually or in the aggregate is reasonably expected to have a
Material Adverse Effect on such Borrower Affiliate. No Borrower Affiliate has
any material contingent liabilities not provided for or referred to in the
Financial Statements and Statutory Financial Statements delivered pursuant to
SECTIONS 4.17, 4.18 and 5.3.
4.4 TAXES. No Borrower Affiliate is delinquent in the payment of
any taxes that have been levied or assessed by any Governmental Authority
against it or its assets. Each Borrower Affiliate has timely filed all tax
returns that are required by law to be filed, and has paid all taxes shown on
said returns and all other assessments or fees levied upon such Borrower
Affiliate, or upon its respective properties to the extent that such taxes,
assessments or fees have become due and if not due, such taxes have been
adequately provided for, except for matters contested in good faith in
appropriate proceedings. No material controversy in respect of income taxes is
pending or, to the Borrowers's knowledge, threatened, against any Borrower
Affiliate. As used in this SECTION 4.4, the term "taxes" includes all taxes of
any nature whatsoever and however denominated, including, without limitation,
income, sales, use, and excise taxes, import and governmental fees, duties and
all other charges, as well as additions to tax, penalties and interest thereon,
imposed by any government or instrumentality.
4.5 CONFLICTS WITH OTHER INSTRUMENTS, LAWS. Neither the
execution, delivery or performance of the Loan Documents by the Borrower or any
Subsidiary nor its compliance therewith: (a) conflicts or will conflict with
or results or will result in any breach of, or constitutes or will constitute,
with the passage of time or the giving of notice or both, a default under, or
requires the consent or approval of any Person with respect to, (i) the
articles of incorporation or bylaws of any Borrower Affiliate, (ii) any law,
rule, statute or regulation or any order, writ, injunction or decree of any
court or governmental authority or (iii) any agreement or instrument to which
any Borrower Affiliate is a party or by which such Borrower Affiliate, or its
respective properties, is bound or (b) results or will result in the creation
or imposition of any lien, charge or encumbrance upon its properties pursuant
to any such agreement or instrument.
4.6 GOVERNMENTAL COMPLIANCE; INSURANCE LICENSES. (a) Except as
disclosed on SCHEDULE 4.6, each Borrower Affiliate has been and is in good
standing with respect to all material governmental approvals, licenses,
permits, certificates, inspections, consents and franchises necessary to
continue to conduct its business as heretofore conducted and to own or lease
and operate its properties as now owned or leased by them. None of such
approvals, licenses, permits, certificates, consents or franchises contains any
term, provision, condition or limitation more burdensome than such as are
generally applicable to Persons engaged in the same or similar business as
either such Borrower Affiliate.
(b) SCHEDULE 4.6 lists all of the jurisdictions in which the
Insurance Subsidiary holds licenses (including, without limitation, licenses or
certificates of authority from applicable insurance departments), permits or
authorizations to transact insurance and reinsurance business (collectively,
the "Licenses"). Except as set forth on SCHEDULE 4.6, no such License is the
subject of a proceeding for suspension, revocation or limitation or any similar
proceedings, there is no sustainable basis for such a suspension, revocation or
limitation, and no such suspension, revocation or limitation is threatened by
any state
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insurance department. SCHEDULE 4.6 indicates the line or lines of insurance in
which the Insurance Subsidiary is permitted to be engaged with respect to each
License therein listed. The Insurance Subsidiary does not transact any
insurance business, directly or indirectly, in any state other than those
enumerated on SCHEDULE 4.6 hereto, where such business requires any license,
permit, governmental approval, consent or other authorization.
4.7 DEFAULT. No event has occurred and is continuing that
constitutes a Default or an Event of Default.
4.8 MARGIN SECURITIES. Neither the making of any Loan hereunder,
nor the use of the proceeds thereof, will violate or be inconsistent with the
provisions of Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System, and no part of the proceeds of any Loans will be used to
purchase or carry any Margin Stock in violation of Regulation U or to extend
credit for the purpose of purchasing or carrying any Margin Stock in violation
of Regulation U.
4.9 USE OF PROCEEDS. The Borrower's use of the proceeds of any
Loans are and will be for legal and proper corporate uses, duly authorized by
its Board of Directors, and such uses are and will comply with SECTION 2.15 and
be consistent in all material respects with all applicable laws and statutes,
as in effect from time to time.
4.10 INSURANCE. Each Borrower Affiliate is adequately insured for
its benefit under policies issued by insurers of recognized responsibility,
with coverage of types and in amounts as are customary in the Borrower
Affiliates' respective industries. No notice of any pending or threatened
cancellation or material premium increase has been received by a Borrower
Affiliate with respect to any such insurance policies. Each Borrower
Affiliate is in substantial compliance with all material conditions contained
in such insurance policies.
4.11 OWNERSHIP OF PROPERTIES, SUBSIDIARY. On the date of any Loan,
each Borrower Affiliate will have good title, subject to any Permitted Liens,
to all of its properties and assets, real and personal, of any nature
whatsoever reflected in the Financial Statements and Statutory Financial
Statements. Borrower owns 100% of the outstanding Stock and Securities of WNL
Holding Corp., and WNL Holding Corp. owns 100% of the outstanding Stock and
Securities of Western National Life, in each case free and clear of all liens,
encumbrances and charges whatsoever.
4.12 BUSINESS LOCATIONS. SCHEDULE 4.12 lists each of the locations
where each of the Borrower Affiliates maintains an office, a place of business
or any records.
4.13 ACCURACY OF INFORMATION. All factual written information
furnished heretofore or contemporaneously herewith by any Borrower Affiliate or
known by any Borrower Affiliate to have been furnished on its behalf to the
Agent or the Lenders for purposes of or in connection with this Credit
Agreement or any of the transactions contemplated hereby, as supplemented to
the date hereof, is, and all other such factual written information hereafter
furnished by or on behalf of any Borrower Affiliate to the Agent or the Lenders
will be, true and accurate in every material respect on the date as of which
such information is dated or certified and not incomplete by omitting to state
any material fact necessary to make such information, in light of the
circumstances under which it is provided, not misleading, and the Borrower has
notified the Lenders of all events that have occurred since such date that
would render such information incomplete or misleading in any material respect.
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4.14 SUBSIDIARIES; AFFILIATES. As of the date hereof, other than
as set forth on SCHEDULE 4.14, the Borrower has and, to its knowledge, has had
no Subsidiaries or Affiliates other than the Insurance Subsidiary, and the
Insurance Subsidiary has and, to the knowledge of Borrower, has had no
Subsidiaries. In addition, SCHEDULE 4.14 sets forth the ownership by any
Person of five percent (5%) or more of any class of capital stock in the
Borrower Affiliates.
4.15 INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT.
No Borrower Affiliate is an "investment company" or a company "controlled by an
investment company," within the meaning of the Investment Company Act of 1940,
as amended, provided, however, that the WNL Series Trust is an "investment
company" operating a mutual fund as part of the Insurance Subsidiary's variable
annuity program and may in the future become a Borrower Affiliate, and, at all
times, shall be in material compliance with the Investment Company Act of 1940.
No Borrower Affiliate is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
4.16 EMPLOYEE PLANS; ERISA.
(a) All Multiemployer Plans, all Welfare Plans and all other
Employee Plans that each Borrower Affiliate has adopted with respect to its
employees are in compliance with ERISA and the Internal Revenue Code.
(b) Except as set forth in SCHEDULE 4.16, no accumulated funding
deficiency (as defined in Section 302 of ERISA and Section 412 of the Internal
Revenue Code), whether or not waived, has occurred with respect to any Employee
Plan, and no ERISA Event has occurred or is reasonably expected to occur with
respect to any Employee Plan. Except as set forth in SCHEDULE 4.16, the
present value of all accrued benefits under each Employee Plan (based on those
assumptions used to fund such Employee Plan) did not, as of the most recent
valuation date, exceed the then current value of the assets of such Employee
Plan allocable to such benefits. Except as set forth in SCHEDULE 4.16, full
payment has been made on or before the due date thereof of all amounts that any
Borrower Affiliate is required under the terms of each such Employee Plan to
have paid as contributions to such plan.
(c) Except as set forth in SCHEDULE 4.16, no Borrower Affiliate
has incurred any withdrawal liability under Section 4201 of ERISA.
(d) No Borrower Affiliate has participated in any Prohibited
Transaction that has subjected, or may subject, it to any material civil
penalty or tax imposed by Section 502(i) of ERISA or Section 4975 of the
Internal Revenue Code, respectively. Except as set forth in SCHEDULE 4.16, no
Borrower Affiliate has incurred, or is reasonably expected to incur, any
liability to the Pension Benefit Guaranty Corporation (other than for insurance
premiums, which have been paid when due).
(e) The present value (determined using actuarial and other
assumptions that are reasonable in respect of the benefits provided and the
employees participating) of the liability of any Borrower Affiliate for
post-retirement benefits to be provided to their current and former employees
under all Welfare Plans does not, in the aggregate, exceed the assets under all
such plans allocable to such benefits by an amount that would materially and
adversely affect the financial condition of such Borrower Affiliate or the
Borrower's ability to perform its obligations hereunder.
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(f) The execution and delivery of this Credit Agreement will not
involve any transaction that is subject to the prohibitions of Section 406 of
ERISA or in connection with which a tax could be imposed pursuant to Section
4975 of the Internal Revenue Code.
(g) No Borrower Affiliate is making or has ever made or been
required to make any contributions to a Multiemployer Plan.
4.17 FINANCIAL STATEMENTS OF THE BORROWER AND ITS INSURANCE
SUBSIDIARY. The Borrower has previously delivered to the Agent the Financial
Statements consisting of the audited consolidated balance sheets of the
Borrower and its Insurance Subsidiary as of December 31, 1995, December 31,
1994 and December 31, 1993 and the related statements of income and cash flows
for the Fiscal Years then ended, and the unaudited consolidated balance sheets
of the Borrower and its Insurance Subsidiary as of September 30, 1996 and the
related statements of income and cash flows for the three- month period then
ended have been prepared by the Borrower in accordance with Generally Accepted
Accounting Principles, and they contain no material misstatement or omission
and fairly present the financial position, assets and liabilities of the
Borrower and its Insurance Subsidiary, on a consolidated basis, as of the
respective dates thereof and the results of operations of the Borrower and its
Insurance Subsidiary, on a consolidated basis, for the respective periods then
ended. Since December 31, 1995, there has been no Material Adverse Change in
the assets, liabilities or financial position of any Borrower Affiliate or in
the results of any such Borrower Affiliate's operations (except as may be
disclosed in the Forms 10-K and 10-Q filed by the Borrower for the periods
ending December 31, 1995 through September 30, 1996), and no Borrower Affiliate
has incurred any obligation or liability that could materially and adversely
affect its financial condition or business operations.
4.18 SAP FINANCIAL STATEMENTS.
(a) The Annual Statements of the Insurance Subsidiary including,
without limitation, the provisions made therein for investments and the
valuation thereof, losses (reserves), and Statutory Liabilities, as filed with
the Department and delivered to Agent prior to the execution and delivery of
this Agreement, as of the end of, and for, the 1993, 1994 and 1995 Fiscal Years
(collectively, the "Statutory Financial Statements"), have been prepared in
accordance with SAP. Each such Statutory Financial Statement was in compliance
with applicable law when filed. The Statutory Financial Statements fairly
present the financial position, the results of operations, changes in equity
and changes in financial position of the Insurance Subsidiary as of and for the
respective dates and periods indicated therein in accordance with SAP, except
as set forth in the notes thereto. Except for liabilities and obligations
disclosed or provided for in the Statutory Financial Statements, including,
without limitation, losses (reserves) and Statutory Liabilities (all of which
have been computed in accordance with SAP), the Insurance Subsidiary did not
have, as of the respective dates of each of such Statutory Financial
Statements, any material liabilities or obligations (whether absolute or
contingent and whether due or to become due) that in conformity with SAP would
have been required to be or should be disclosed or provided for in such
Statutory Financial Statements. All books of account of the Insurance
Subsidiary fully and fairly disclose all of the transactions, properties,
assets, investments, liabilities and obligations of the Insurance Subsidiary
and all of such books of account are in the possession of the Insurance
Subsidiary and are true, correct and complete in all material respects.
(b) The investments of the Insurance Subsidiary reflected in the
1995 Annual Statements comply in all material respects with all applicable
requirements of the Department as well as those of any
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other Governmental Authority with jurisdiction over the investment of the
Insurance Subsidiary's funds.
(c) The amounts shown in the 1995 Annual Statement for the Insurance
Subsidiary for (i) aggregate reserve for life policies and contracts and for
accident and health policies (set forth in lines 1 and 2, column 1, of page 3
thereof), and (ii) Statutory Liabilities were computed in accordance with
commonly accepted actuarial standards consistently applied and were fairly
stated in accordance with sound actuarial principles, were based on actuarial
assumptions that were in accordance with or more stringent than those called for
in the insurance policies and contracts and in the related reinsurance,
co-insurance or similar contracts of the Insurance Subsidiary, were computed on
the basis of assumptions consistent with those of the preceding Fiscal Year or
Quarter, as the case may be, and met the requirements of the Department, as
applicable, as well as those of any other applicable Governmental Authority.
Such reserves established by the Insurance Subsidiary were, in the judgment of
Borrower and such Insurance Subsidiary, adequate as of such date for the payment
by the Insurance Subsidiary of all insurance benefits, losses, claims and
investigative expenses of the Insurance Subsidiary.
(d) Marketable securities and short term investments reflected in
the Insurance Subsidiary's 1995 Annual Statement are valued at cost, amortized
cost or market value, as required by applicable law or regulation.
4.19 SOLVENCY. The Borrower is Solvent, and will not, as a result
of the transactions contemplated hereby become not Solvent or be left with
unreasonably small capital.
4.20 ENVIRONMENTAL MATTERS. (a) Except as reflected in SCHEDULE
4.20, (i) to the best knowledge of Borrower, no Hazardous Material is or has
been generated, used, released, treated, disposed of or stored, or otherwise
located, in, on or under any Realty (or any portion thereof) in violation of
any Environmental Law, and no part of the Realty or other property owned,
leased or operated by the Borrower or any Subsidiary (now or in the past),
including without limitation the soil and groundwater located thereon and
thereunder, has been contaminated by any Hazardous Material; (ii) no
improvements on the Realty contain any asbestos or substances containing
asbestos; (iii) none of the Realty has been the subject of an environmental
audit or assessment, or remedial action; and (iv) to the best of the Borrower's
knowledge, the foregoing statements are true and correct with respect to all of
the real property adjoining any of the Realty.
(b) To the best of the Borrower's knowledge, no portion of the
Realty has been used as or for a mine, a landfill, a dump or other disposal
facility, a gasoline service station, or a petroleum products storage facility,
and none of the Realty or other property owned, leased or operated by the
Borrower or any Subsidiary (now or in the past) has, pursuant to any
Environmental Law, been placed on the "National Priorities List" or "CERCLIS
List" (or any similar federal, state or local list) of sites subject to
possible environmental problems.
(c) Except as set forth in SCHEDULE 4.20, there are no underground
storage tanks situated on the Realty and, to the best of the knowledge of the
Borrower, no underground storage tanks have ever been situated on the Realty.
(d) Except as set forth in SCHEDULE 4.20, to the best knowledge of
Borrower, all activities and operations of the Borrower and Subsidiaries meet
the requirements of all applicable Environmental Laws,
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neither the Borrower nor any Subsidiary has violated any Environmental Law in
the past, and the Realty has never been the site of a violation of any
Environmental Law.
(e) Except as set forth on SCHEDULE 4.20, to the best knowledge of
Borrower, neither the Borrower nor any Subsidiary has ever sent a Hazardous
Material to a site which, pursuant to any Environmental Law, (1) has been
placed on the "National Priorities List" or "CERCLIS List" (or any similar
federal, state or local list) of sites subject to possible environmental
problems, or (2) which is subject to a claim, an administrative order or other
request to take "response," "removal," "corrective" or "remedial" action, as
defined in any Environmental Law, or to pay for or contribute to the costs of
cleaning up the site.
(f) Neither the Borrower nor any Subsidiary is involved in any
suit or proceeding or has received any notice from any Governmental Authority
or other third party with respect to a release or threat of release of any
Hazardous Material, or violation or alleged violation of any Environmental Law,
or has received notice of any claim from any person or entity relating to
property damage or to personal injuries from exposure to any Hazardous
Material.
(g) To the Borrower's knowledge, the Borrower and each Subsidiary
has timely filed all reports required to be filed, has acquired all necessary
certificates, approvals and permits, and has generated and maintained in all
material respects all required data, documentation and records required under
all Environmental Laws.
4.21 ASSETS FOR CONDUCT OF BUSINESS. Each of the Borrower
Affiliates possesses adequate assets, contract rights, patents, patent
applications, copyrights, trademarks, servicemarks and trade names, or licenses
thereto, to continue to conduct its business as heretofore conducted, without
any material conflict with the rights of others.
4.22 TRADE RELATIONS. There exists no actual or, to the best of
the Borrower's knowledge following due inquiry, threatened termination,
cancellation or limitation of, or any modification or change in (other than
fluctuation in sales by individual insurance agents or agencies or distributors
that occur in the ordinary course of business), the business relationship of
any Borrower Affiliate with any customer or any group of customers that
Borrower anticipates will have a Material Adverse Effect on the business of
such Borrower Affiliate, or with any agent, distributor (including a bank), or
insurance agency or group of agents, distributors, or insurance agencies, that
Borrower anticipates will have a Material Adverse Effect on the business of
such Borrower Affiliate, and there exists no present condition or state of
facts or circumstances that would have a Material Adverse Effect on any
Borrower Affiliate or prevent such Borrower Affiliate from conducting its
business after the consummation of the transactions contemplated by this Credit
Agreement in substantially the same manner in which it has heretofore been
conducted.
4.23 SECURITIES LAWS. Neither the Borrower nor any Subsidiary, nor
anyone acting on behalf of any such Person, has directly or indirectly offered
any interest in any Note or any other Obligation for sale to, or solicited any
offer to acquire any such interest from, or has sold any such interest to, any
Person that would subject the issuance or sale of such Note or any other
liability to registration under the Securities Act of 1933, as amended.
4.24 COMPLIANCE WITH LAWS. Neither the Borrower nor any Subsidiary
is in violation of any law, ordinance, rule, regulation, order, policy,
guideline or other requirement of any Governmental
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Authority, if the effect of such violation, or cumulative effect of such
violations, could reasonably be expected to have a Material Adverse Effect on
any Borrower Affiliate and, to the best of the Borrower's knowledge, no such
violation has been alleged, and the Borrower and each Subsidiary (i) has filed
in a timely manner all reports, documents and other materials required to be
filed by it with any Governmental Authority, if such failure to so file could
reasonably be expected to have a Material Adverse Effect on any Borrower
Affiliate, and the information contained in each of such filings is true,
correct and complete in all material respects, and (ii) has retained all
records and documents required to be retained by it pursuant to any law,
ordinance, rule, regulation, order, policy, guideline or other requirement of
any Governmental Authority, if the failure to so retain such records and
documents could reasonably be expected to have a Material Adverse Effect on any
Borrower Affiliate.
4.25 EMPLOYEES AND LABOR. There is no unfair labor practice
complaint against any Borrower Affiliate pending before the National Labor
Relations Board or any state or local agency and there is not a labor strike or
other labor dispute pending or, to the best of the Borrower's knowledge,
threatened, affecting any of the foregoing that if adversely resolved would
have a Material Adverse Effect on such Borrower Affiliate and, to the best of
the Borrower's knowledge, there are no organizational attempts affecting any of
the employees of any Borrower Affiliate that could have a Material Adverse
Effect on any Borrower Affiliate; there is no grievance, labor dispute or work
stoppage involving or affecting any Borrower Affiliate pending or, to the best
of the Borrower's knowledge, threatened that could have a Material Adverse
Effect on any Borrower Affiliate.
4.26 REINSURANCE. The Insurance Subsidiary is not a party to any
existing Surplus Relief Reinsurance Agreement. SCHEDULE 4.26 lists all
existing Reinsurance Agreements of the Insurance Subsidiary. Except as set
forth on SCHEDULE 4.26, (i) as of the date hereof all such Reinsurance
Agreements are in full force and effect and are with reinsurers rated "A" or
better by A.M. Best & Company and (ii) no party to any such agreements is in
default in any material respect as to any provision thereof, and no such
agreement contains any provision providing that the other party thereto may
terminate such agreement by reason of the transactions contemplated by the
Credit Agreement. To the best knowledge of the Borrower, there is no reason to
believe that the financial condition of any other party to any such Reinsurance
Agreement is impaired with the result that a default thereunder may reasonably
be anticipated.
4.27 POLICIES OF INSURANCE. Except with respect to terms
specifically negotiated with policyholders, if any, and subject to such
exceptions, if any, as are not material to Borrower or Western National Life
all policies of insurance issued by the Insurance Subsidiary as now in force
are, to the extent required under applicable law, on forms approved by the
appropriate Governmental Authorities in the jurisdictions where issued or have
been filed with and not objected to by such Governmental Authorities within the
period provided for objection. None of the terms embraced by the exception
contained in the preceding sentence adversely affects, or could reasonably be
expected to adversely affect, the enforceability of any such policies or
jeopardizes, or could reasonably be expected to jeopardize, the License of the
Insurance Subsidiary in any jurisdiction.
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ARTICLE V
AFFIRMATIVE COVENANTS
Until payment in full of all Obligations of the Borrower to each of
the Lenders and termination of the Commitments, the Borrower covenants and
agrees that, unless the Required Lenders consent otherwise in writing, the
Borrower shall:
5.1 REPAYMENT OF OBLIGATIONS. Promptly repay the Obligations when
due, including without limitation the amounts due under the Notes, according to
the terms of this Credit Agreement and the other Loan Documents.
5.2 PERFORMANCE UNDER LOAN DOCUMENTS. Perform, and cause its
Subsidiaries to perform, all obligations required to be performed by the
Borrower and each such Subsidiary, as applicable, under the terms of this
Credit Agreement and the other Loan Documents and any other agreements now or
hereafter existing or entered into between any Borrower Affiliate and the
Lenders, subject to notice and cure provisions contained therein.
5.3 REPORTS, CERTIFICATES AND OTHER INFORMATION. Furnish or cause
to be furnished to the Agent and the Lenders:
(a) GAAP Financial Statements.
(i) Within 45 days after the end of each of the first
three Fiscal Quarters of each Fiscal Year of the Borrower, (A) a copy
of the unaudited consolidated and consolidating balance sheet of the
Borrower and its Insurance Subsidiary, as of the close of such Fiscal
Quarter, and (B) a copy of the unaudited consolidated and
consolidating statements of income of the Borrower and its Insurance
Subsidiary for such Fiscal Quarter and for the elapsed portion of the
Fiscal Year, and (C) the consolidated and consolidating statements of
cash flows of the Borrower and its Insurance Subsidiary, for such
Fiscal Quarter and for the elapsed portion of the Fiscal Year, all
prepared in accordance with Generally Accepted Accounting Principles
(subject to normal year-end adjustments and except that footnote and
schedule disclosure may be abbreviated) and accompanied by the
certification of the chief executive officer or chief financial
officer of the Borrower that all such Financial Statements are
complete and correct and present fairly in accordance with Generally
Accepted Accounting Principles (subject to normal year-end
adjustments) the financial position and results of operations of the
Borrower and its Insurance Subsidiary as at the end of such Fiscal
Quarter, and for such Fiscal Quarter and for the elapsed portion of
the Fiscal Year.
(ii) Within 90 days after the close of each Fiscal Year, a
copy of the annual audited consolidated Financial Statements of the
Borrower, consisting of the consolidated and consolidating balance
sheets and statements of income, retained earnings and cash flows,
setting forth in comparative form in each case the consolidated
figures for the previous Fiscal Year, which Financial Statements shall
be prepared in accordance with Generally Accepted Accounting
Principles, certified without qualification by the independent
certified public accountants regularly retained by the Borrower, or
any other firm of independent certified public accountants of
recognized national standing selected by the Borrower and reasonably
acceptable to the Required Lenders that all such Financial Statements
are complete and correct and present fairly in
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accordance with Generally Accepted Accounting Principles the
consolidated financial position and the consolidated results of
operations and cash flows of the Borrower and its Insurance
Subsidiary as at the end of such Fiscal Year and for such Fiscal Year.
(b) SAP Financial Statements.
(i) As soon as possible, but in any event within 60 days
after the end of each Fiscal Year of the Insurance Subsidiary, a copy
of the Annual Statement for such Fiscal Year prepared in accordance
with SAP and accompanied by the certification of the chief financial
officer or chief executive officer of the Insurance Subsidiary that
such financial statement is complete and correct and presents fairly
in accordance with SAP the financial position of the Insurance
Subsidiary for such Fiscal Year.
(ii) As soon as possible, but in any event within 60 days
after the end of each Fiscal Year of the Insurance Subsidiary, the
certification of the chief valuation actuary of the Insurance
Subsidiary as to the adequacy of the Insurance Subsidiary's reserves
set forth in the applicable Annual Statement. Such opinion shall be
in the format, if any, prescribed by the applicable Insurance Code.
(iii) Within 90 days after the end of each Fiscal Year, a
copy of the Insurance Subsidiary's Annual Statement prepared in
accordance with SAP, certified without qualification by the
independent certified public accountants regularly retained by the
Insurance Subsidiary, or any other firm of independent certified
public accountants of recognized national standing selected by the
Borrower and reasonably acceptable to the Required Lenders that such
Annual Statement is complete and correct and presents fairly in
accordance with SAP the Insurance Subsidiary's financial position for
such Fiscal Year and continuing consolidated and consolidating
financial statements.
(iv) As soon as possible, but in any event within 45 days
after the end of each of the first three Fiscal Quarters of each
Fiscal Year of the Insurance Subsidiary, a copy of the Insurance
Subsidiary's quarterly statement for such Fiscal Quarter, all prepared
in accordance with SAP and accompanied by the certification of the
Insurance Subsidiary's chief financial officer or chief executive
officer that all such financial statements are complete and correct
and present fairly in accordance with SAP the Insurance Subsidiary's
financial position for the periods then ended.
(v) Upon filing with the Department, the Insurance
Subsidiary's management discussion and analysis.
(c) Notice of Default. As soon as practicable, but in any event
within three (3) Business Days after the Borrower becomes aware of the
existence of any Default or Event of Default, or any development that would
have a Material Adverse Effect on any Borrower Affiliate, telephonic,
facsimile, telegraphic notice specifying the nature of such Default, Event of
Default or development, including the anticipated effect thereof, which notice
shall be promptly confirmed in writing within two (2) Business Days, other than
developments that affect the economy of the United States generally or the
insurance industry generally.
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(d) Additional Information. The following certificates
and other information:
(i) As soon as received, but not later than ten (10)
Business Days after receipt thereof, a copy of any reports on
examination or similar reports, financial examination reports or
market conduct examination reports by a Governmental Authority with
respect to the Insurance Subsidiary's insurance business.
(ii) Copies of all material filings with Governmental
Authorities by any Borrower Affiliate not later than five (5) Business
Days after such filings are made, including, without limitation,
filings that seek approval of Governmental Authorities with respect to
material transactions between any Borrower Affiliate and any
Affiliates thereof.
(iii) Within three (3) Business Days of such notice, notice
of actual suspension, termination, limitation or revocation of any
material license of any Borrower Affiliate (including any License of
the Insurance Subsidiary) by any Governmental Authority or of receipt
of notice from any Governmental Authority notifying the Insurance
Subsidiary of a hearing relating to such a suspension, termination,
limitation or revocation, including any request by a Governmental
Authority that commits any Borrower Affiliate to take, or refrain from
taking, any action that otherwise materially and adversely affects the
authority of such Borrower Affiliate to conduct its business.
(iv) Within three (3) Business Days of such notice, notice
of any material pending or threatened inquiry, investigation or
regulatory proceeding (other than routine periodic inquiries,
investigations or reviews) by any Governmental Authority concerning
the business, practices or operations of any Borrower Affiliate,
including any agent or managing general agent thereof.
(v) Promptly, notice of any actual or, to the best of the
Borrower's knowledge, proposed material changes (other than proposed
changes existing as of the date of this Credit Agreement) in the
Insurance Code governing the investment or dividend practices of Texas
domiciled insurance companies.
(vi) (A) Promptly, notice of any change or modification to
any Reinsurance Agreement whether entered into before or after the
Closing Date, which change or modification could reasonably be
expected to have a Material Adverse Effect on any Borrower Affiliate;
(B) promptly, notice of any written notice received by any Borrower
Affiliate of denial of coverage, litigation, claim or arbitration
arising out of any Reinsurance Agreement to which such entity is a
party; and (C) promptly, such other financial, actuarial and other
information with respect to Reinsurance Agreements as the Agent may
reasonably request.
(e) Compliance Certificates. Concurrently with each delivery of
the financial statements described in SECTIONS 5.3(A) AND (B), and at any other
time no later than thirty (30) Business Days following a written request of the
Agent, a duly completed Compliance Certificate, signed by the chief financial
officer of the Borrower, containing, among other things, a computation of, and
showing compliance with, each of the applicable financial ratios and financial
restrictions contained in ARTICLE VI and to the effect that, to the best of
such officer's knowledge, as of such date no Default or Event of Default has
occurred and is continuing.
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(f) Auditors' Reports. Promptly upon receipt thereof, copies of
all material detailed financial and management reports regarding any Borrower
Affiliate submitted to any such entity by independent public accountants in
connection with each annual or interim audit report made by such accountants of
the books of such entity.
(g) Reports to Shareholders and SEC. Promptly upon (and in any
event within three (3) Business Days after) the sending or filing thereof,
copies of (i) all financial statements, reports, notices and proxy statements
that the Borrower shall send or make available generally to its public
shareholders or file with the Securities and Exchange Commission, (ii) all
regular, periodic and special reports, registration statements and
prospectuses, including all amendments thereto, that the Borrower or any of its
Subsidiaries shall render to or file with the Securities and Exchange
Commission, the NASD or any national securities exchange (excluding filings
related to variable annuity products and related operations), and (iii) all
press releases and other statements that the Borrower or any of its
Subsidiaries shall make available generally to the public concerning
developments in the business of the Borrower or any of its Subsidiaries, other
than press releases or statements issued in the ordinary course of business.
(h) Notice of Litigation and ERISA Matters. Upon learning of the
occurrence of any of the following, written notice thereof, describing the same
and the steps being taken by the Borrower or Subsidiary with respect thereto:
(i) the institution of, or any adverse determination in, any litigation,
arbitration proceeding or governmental proceeding (including any Internal
Revenue Service or Department of Labor proceeding with respect to any Employee
Plan or Welfare Plan) that could, if adversely determined, be reasonably
expected to have a Material Adverse Effect on any Borrower Affiliate, (ii) the
failure of any Borrower Affiliate timely to make a required contribution to any
Employee Plan if such failure is sufficient to give rise to a lien under
section 302(f)(1) of ERISA, (iii) the institution of any steps by any Borrower
Affiliate to withdraw from, or the institution of any steps by any Borrower
Affiliate to terminate under a distress termination, any Employee Plan or the
taking of any action with respect to an Employee Plan that could result in the
requirement that the Borrower Affiliate furnish a bond or other security to
such Employee Plan, or the occurrence of any event with respect to any Employee
Plan that could result in the incurrence by any Borrower Affiliate of any
material liability (other than a liability for contributions or premiums), fine
or penalty, or (iv) the commencement of any dispute that might lead to the
modification, transfer, revocation, suspension or termination of this Credit
Agreement or any Loan Document.
(i) Insurance Reports. Within five (5) Business Days of receipt
of such notice by any Borrower Affiliate, written notice of any cancellation or
Material Adverse Change in any material Insurance Policy carried by such
Borrower Affiliate.
(j) Bonding of Fiduciaries. Upon request of the Agent, evidence
that every fiduciary and every Person who handles funds of an Employee Plan or
Welfare Plan is bonded in accordance with section 412 of ERISA.
(k) Change of Name, Places of Business. As soon as reasonably
practicable but in any event within 30 days after such event, written notice to
the Agent of any change in the name or principal place of business of any
Borrower Affiliate.
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(l) Subsidiaries. Borrower shall deliver with its Financial
Statements notice of (i) any newly created or acquired Material Subsidiary and
(ii) any Subsidiary that has become a Borrower Affiliate since the most recent
delivery of Financial Statements.
(m) Other Information. From time to time such other information
under Borrower's possession or control concerning any Borrower Affiliate as the
Agent may reasonably request.
5.4 CORPORATE EXISTENCE; FOREIGN QUALIFICATION. Do and cause to
be done at all times all things necessary to (i) maintain and preserve the
corporate existence of each Borrower Affiliate, (ii) be, and ensure that each
Borrower Affiliate is, duly qualified to do business and be in good standing as
a foreign corporation in each jurisdiction where the nature of its business
makes such qualification necessary, (iii) comply, and cause each other Borrower
Affiliate to comply, in all material respects with all Contractual Obligations
and Requirements of Law binding upon such entity, and (iv) do or cause to be
done all things necessary to preserve and keep in full force and effect the
Insurance Subsidiary's corporate existence and all Licenses required by the
Insurance Subsidiary to engage in the insurance business in all jurisdictions
in which the Insurance Subsidiary is so engaged; provided, however, with
respect to (i) above, Borrower Affiliates may merge with other Borrower
Affiliates (so long as the Borrower is the survivor in any merger to which it
is a party) and, provided, further, with respect to (iv) above and subject to
the other provisions of this Credit Agreement, the Insurance Subsidiary need
not maintain Licenses in jurisdictions in which it ceases to do business).
5.5 BOOKS, RECORDS AND INSPECTIONS. (i) Maintain, and cause its
Subsidiaries to maintain, materially complete and accurate books and records,
(ii) permit, and cause each Subsidiary to permit access at reasonable times by
the Agent to its books and records, (iii) permit, and cause each Subsidiary to
permit, the Agent to inspect at reasonable times its properties and operations,
and (iv) permit, and cause each Subsidiary to permit, the Agent to discuss its
business, operations and financial condition with such entities' officers.
5.6 INSURANCE. Maintain, and cause each Subsidiary to maintain,
such insurance policies to such extent and against such hazards and liabilities
as is customarily maintained by prudent companies similarly situated or as may
be required by law.
5.7 TAXES AND LIABILITIES. Pay, and cause each Subsidiary to pay,
when due, all material taxes, assessments and other material liabilities except
as contested in good faith and by appropriate proceedings, with respect to
which reserves have been established, and are being maintained, in accordance
with Generally Accepted Accounting Principles, if and so long as such contest
could not reasonably be expected to have a Material Adverse Effect on any
Borrower Affiliate.
5.8 EMPLOYEE BENEFIT PLANS. Maintain, and cause each Subsidiary
to maintain, each Employee Plan, Multiemployer Plan and Welfare Plan in
compliance in all material respects with all applicable Requirements of Law.
5.9 COBRA. Operate, and cause each Subsidiary to operate, each
Employee Plan in such a manner that such Borrower Affiliate or Subsidiary will
not incur any material tax liability under Section 4980B of the Internal
Revenue Code or any material liability to any qualified beneficiary as defined
in such Section 4980B.
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5.10 COMPLIANCE WITH LAWS. Comply, and cause each Subsidiary to
comply, in all material respects with all federal, state and local laws, rules
and regulations related to its businesses (including, without limitation, the
establishment of all insurance reserves required to be established under SAP
and applicable laws restricting the Insurance Subsidiary's investments).
5.11 MAINTENANCE OF PERMITS. Maintain, and cause each Subsidiary
to maintain, all material permits, licenses and consents as may be required for
the conduct of its business by any state, federal or local government agency or
instrumentality.
5.12 INVESTMENTS. Cause the assets of the Insurance Subsidiary to
be invested at all times so as to be in material compliance, at the time of
making each investment, with the investment policies adopted by the Board of
Directors of the Insurance Subsidiary, as amended by such Board from time to
time.
5.13 INTEREST RATE PROTECTION. Subject to maintaining the required
ratio of SECTION 6.3 hereof, the Borrower may enter into Rate Protection
Agreements and shall promptly furnish to Lenders copies thereof.
ARTICLE VI
NEGATIVE COVENANTS
Until payment in full of all Obligations of the Borrower to each of
the Lenders and termination of the Commitments, the Borrower covenants and
agrees that, unless the Required Lenders consent in writing, the Borrower shall
not, and shall not permit any Borrower Affiliate, to:
6.1 CONSOLIDATED NET WORTH. Permit Consolidated Net Worth of the
Borrower to be less than $675,000,000.
6.2 ADJUSTED STATUTORY CAPITAL AND SURPLUS. Permit Adjusted
Statutory Capital and Surplus of Western National Life to be less than
$550,000,000.
6.3 RATIO OF CONSOLIDATED INDEBTEDNESS TO TOTAL CAPITALIZATION.
Permit the ratio of (i) Consolidated Indebtedness at any time to (ii) the Total
Capitalization of the Borrower at such time to be more than 0.375 to 1.0.
6.4 RISK BASED CAPITAL. Permit the Total Adjusted Capital of
Western National Life to be less than 150% of the Company Action Level RBC.
6.5 BEST RATING. Permit the Insurance Subsidiary to have an A.M.
Best Rating of less than "A-."
6.6 LIMITATION ON LIENS. Except as provided below, incur, issue,
assume or guarantee any Indebtedness secured by a Lien on any property or
assets of the Borrower or the Insurance Subsidiary, or any shares of capital
stock of any Subsidiary, without effectively providing that the Obligations
(together with, if the Borrower shall so determine, any other Indebtedness
which is not subordinated to the Obligations) shall be secured equally and
ratably with (or prior to) such Indebtedness, so long as such
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Indebtedness shall be so secured; provided, however, that this covenant shall
not apply to Indebtedness secured by (a) Liens existing on the date of this
Agreement listed on SCHEDULE 6.6; (b) Liens on property of, or on any shares of
stock of, any corporation existing at the time such corporation becomes a
Subsidiary or merges into or consolidates with the Borrower or a Subsidiary;
(c) Liens on property or shares of stock existing at the time of acquisition
thereof by the Borrower or any Subsidiary; (d) Liens to secure (i) the
financing of the acquisition, construction or improvement of real property, or
(ii) the acquisition of shares of stock by the Borrower or any Subsidiary to
the extent the Liens cover only the shares of stock being acquired; provided,
that such Liens are created not later than one year after such acquisition or,
in the case of real property, not later than one year after completion of
construction or commencement of commercial operation, whichever is later; (e)
Liens in favor of the Borrower; (f) Liens in favor of, or required by,
governmental authorities; (g) liens arising in the ordinary and customary
course of the Insurance Subsidiary's investment activities so long as such
activities are otherwise in compliance with this Agreement; (h) statutory liens
for the payment of goods and services that individually and in the aggregate
are not expected to have a Material Adverse Effect on any Borrower Affiliate;
and (i) any extension, renewal or replacement as a whole or in part, of any
Lien referred to in the foregoing clauses (a) to (d) inclusive; provided,
however, that (A) such extension, renewal or replacement Lien shall be limited
to all or a part of the same property or shares of stock that secured the Lien
extended, renewed or replaced and (b) the Indebtedness secured by such Lien at
such time is not so increased. The foregoing are hereinafter referred to as
"Permitted Liens."
6.7 REINSURANCE AGREEMENTS.
(a) Enter into any Reinsurance Agreement with any reinsurer that
is not rated "A" or better by A.M. Best & Company, Inc.
(b) Enter into any Surplus Relief Reinsurance Agreement.
6.8 LIMITATION ON LINES OF BUSINESS. Permit the Insurance
Subsidiary to engage in any line of business other than the lines of business
described in detail on SCHEDULE 6.8, without the approval of the Required
Lenders.
6.9 MERGERS, CONSOLIDATIONS AND SALES.
(a) Enter into any merger, consolidation or other transaction to
which Borrower is a party and is not the surviving entity, or permit any
Borrower Affiliate to enter into a merger, consolidation or purchase or other
acquisition of assets or stock of any other Person if such transaction has or
is expected to have a negative effect on Borrower's Senior Debt Rating Level.
(b) Sell, transfer, convey or lease, or permit any Subsidiary to
sell, transfer, convey or lease, to any Person other than a Borrower Affiliate,
(i) any asset or line of business of any Borrower Affiliate material to the
operations or financial condition of such Borrower Affiliate, including, but
not limited to, as to the Insurance Subsidiary, any asset or group of assets
constituting, (x) in any single transaction, ten percent (10%) of such
Subsidiary's Admitted Assets as of the most recent financial statement provided
pursuant to SECTION 5.3(B) or, (y) during the term of this Agreement, thirty
percent (30%) of such Subsidiary's Admitted Assets as of December 31, 1996 and
(ii) the Stock or other Securities (other than insurance products issued in the
ordinary course of business) of the Insurance Subsidiary; provided,
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however, that clause (i) above shall not limit the sale of Securities in the
ordinary course of managing any Borrower Affiliate's investment portfolio.
6.10 CHANGE IN OWNERSHIP; ISSUANCE OF STOCK. (a) Permit a Change
in Ownership to occur without the prior written consent of the Required
Lenders, which may withhold their consent in their absolute discretion; or
(b) Issue any Stock, or permit any Subsidiary to issue any Stock,
options or warrant or other rights to purchase such Stock, to any Person
without the prior written consent of the Required Lenders, which may withhold
consent in their absolute discretion; provided, however, that (i) Borrower
shall be permitted to issue its Stock, or options or warrants to purchase its
Stock, to any Person and (ii) Borrower may alter the capital structure of any
Subsidiary so long as Borrower continues to own, directly or indirectly, 100%
of the outstanding Stock and Securities (other than insurance products issued
in the ordinary course of business) of such Subsidiary, free and clear of all
liens, encumbrances and charges whatsoever.
6.11 SUBSIDIARIES. Create or permit to exist any Subsidiary (other
than WNL Holding Corp.) or other Person that owns or would own any Stock or
Security of Western National Life or WNL Holding Corp.
6.12 BUSINESS ACTIVITIES.
(a) Engage, or permit any Borrower Affiliate to engage, in any
type of business except the business in which it is engaged as of the date
hereof, the business activities described in detail in SCHEDULE 6.12, lines of
business customarily associated with the life insurance business, and, in the
case of the Insurance Subsidiary, the business allowed under SECTION 6.8. For
purposes of this SECTION 6.12(A), the business of the Borrower shall include
the holding of stock in Subsidiaries engaged in any line of business, provided
that any Material Subsidiaries otherwise comply with this SECTION 6.12.
(b) Engage in the business of issuing insurance policies other
than through an Insurance Subsidiary.
(c) Change, or permit the Insurance Subsidiary to change, the
location of its principal executive office to a jurisdiction other than the
State of Texas without the approval of the Required Lenders.
6.13 TRANSACTIONS WITH AFFILIATES. Enter into, or cause, suffer or
permit to exist, except as set forth in the Borrower's proxy statement relating
to its 1996 annual meeting or Form 10-Q for the quarter ending September 30,
1996, directly or indirectly, any arrangement, transaction or contract (other
than ordinary compensation and benefits arrangements) with any officer,
director or holder of 10% or more of Borrower's shares (other than a
shareholder who is the Borrower or a Subsidiary) of a Borrower Affiliate unless
such arrangement, transaction or contract is in the ordinary course of business
and on terms and conditions reasonably believed to be at least as favorable to
such Borrower Affiliate as the terms and conditions that would apply in a
similar arrangement, transaction or contract with an unrelated Person.
6.14 RESTRICTED PAYMENTS. If an Event of Default shall have
occurred and be continuing, purchase or redeem, or permit any Borrower
Affiliate to purchase or redeem, any shares of its Stock or
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declare or pay any dividends or make any distribution to stockholders or set
aside any funds for any such purpose (except, with respect to any Subsidiary,
dividends paid to the Borrower for the sole purpose of enabling the Borrower to
make any payments of principal or interest to the Lenders or to other creditors
of Borrower ranking pari passu with the Lenders as required hereunder).
6.15 STOCK OF SUBSIDIARIES. Transfer or dispose of, or permit any
Borrower Affiliate to transfer or dispose of, any Stock of any Borrower
Affiliate to any Person; or, pledge or otherwise encumber, or permit any
Subsidiary to pledge or otherwise encumber, any Stock of any Subsidiary except
as permitted under SECTION 6.6.
6.16 NEGATIVE PLEDGE AGREEMENTS. Create, incur, assume or suffer
to exist any agreement, other than this Credit Agreement, the Loan Documents,
the agreements set forth on SCHEDULE 6.16, and agreements hereafter entered
into by the Borrower which shall not be any more restrictive than this Credit
Agreement, that places any restrictions (i) upon the right of a Borrower
Affiliate to sell, pledge or otherwise dispose of any material portion of its
properties now owned or hereafter acquired other than as permitted herein,
except for such restrictions imposed (x) by federal or state securities laws,
(y) under the terms of agreements relating to Permitted Liens, and (z) on
assets held in favor of policy holders in the ordinary course of business for
variable products or other separate account activities, (ii) upon the right of
a Borrower Affiliate to sell, pledge or otherwise dispose of Securities owned
by it, except customary restrictions incurred in the ordinary course of such
Borrower Affiliate's investment activities, or (iii) upon the right or ability
of any Insurance Subsidiary to pay dividends or make any other distributions on
its Stock held by the Borrower, respectively, or to pay any obligation owed to
the Borrower, except as may be required by any Governmental Authority.
6.17 FISCAL YEAR. Change its fiscal year from a fiscal year ending
on December 31.
6.18 CERTAIN INVESTMENTS. Permit the assets of the Insurance
Subsidiary to be invested at any time in violation in any material respect of
the Insurance Code as applicable to the Insurance Subsidiary as well as the
applicable insurance laws and regulations of any other applicable jurisdiction
relating to investments by the Insurance Subsidiary.
6.19 HAZARDOUS MATERIALS. Violate any Environmental Law or permit
any Hazardous Material to be brought onto any of the Realty or any other
property owned, leased or operated by any Borrower or Subsidiary, except as
permitted by applicable law. If any Hazardous Material is brought or found
thereon or therein, except as may be permitted above (and then only in strict
compliance with all applicable Environmental Laws), Borrower, without cost or
expense to the Agent or any Lender, shall perform or cause to be performed all
required environmental response, removal, disposal, corrective and remedial
actions in a diligent manner and in accordance with all Environmental Laws.
The Borrower shall promptly, after any officer of the Borrower learns or
obtains knowledge of the occurrence thereof, give written notice to the Agent
of receipt of any written notice of violation or noncompliance, order or
request for information from any Governmental Authority with respect to any
Environmental Law, and shall promptly remedy any breach of any Environmental
Law by Borrower. Agent shall have the right to enter upon the Realty or other
property owned, leased or operated by the Borrower or any Subsidiary, or any
part thereof (through its employees and/or agents), to verify compliance by
Borrower with the terms of this Agreement and to conduct such environmental
assessments and audits as Agent shall deem advisable to facilitate such
verification; provided, however, BORROWER HEREBY ACKNOWLEDGES THAT ALL
HAZARDOUS MATERIAL HANDLING PRACTICES AND ENVIRONMENTAL PRACTICES AND
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PROCEDURES OF THE BORROWER AND ITS SUBSIDIARIES ARE THE SOLE RESPONSIBILITY OF
THE BORROWER AND ITS SUBSIDIARIES, AND THE BORROWER HAS FULL DECISION-MAKING
POWER WITH RESPECT THERETO. BORROWER FURTHER ACKNOWLEDGES THAT NEITHER THE
AGENT NOR ANY LENDER IS AN ENVIRONMENTAL CONSULTANT, ENGINEER, INVESTIGATOR OR
INSPECTOR OF ANY TYPE WHATSOEVER. NO ACT (OR DECISION NOT TO ACT) OF THE AGENT
OR ANY LENDER RELATED TO THIS AGREEMENT OR ANY LOAN DOCUMENT SHALL GIVE RISE TO
ANY OBLIGATION OR LIABILITY ON THE PART OF THE AGENT OR ANY LENDER WITH RESPECT
TO ENVIRONMENTAL MATTERS. IN NO EVENT SHALL ANY INFORMATION OBTAINED FROM THE
AGENT OR ANY LENDER OR THEIR RESPECTIVE AGENTS PURSUANT TO THIS AGREEMENT OR
ANY LOAN DOCUMENT CONCERNING THE ENVIRONMENTAL CONDITION OF THE REALTY OR OTHER
PROPERTY BE CONSIDERED BY THE BORROWER OR ANY SUBSIDIARY (OR ANY OTHER
RECIPIENT OF SAID INFORMATION) AS CONSTITUTING LEGAL OR ENVIRONMENTAL
CONSULTING, ENGINEERING, INVESTIGATING OR INSPECTING ADVICE, AND NEITHER THE
BORROWER NOR ANY OF ITS SUBSIDIARIES (NOR ANY OTHER RECIPIENT OF SAID
INFORMATION) SHALL RELY ON SAID INFORMATION. THE RESPONSIBILITY OF THE
BORROWER AND ITS SUBSIDIARIES FOR COMPLIANCE WITH ENVIRONMENTAL LAWS RESTS
SOLELY WITH THE BORROWER AND ITS SUBSIDIARIES.
ARTICLE VII
EVENTS OF DEFAULT
7.1 EVENTS OF DEFAULT. The occurrence of any one or more of the
following events shall constitute an "Event of Default" under this Credit
Agreement, the Note and the other Loan Documents:
(a) The Borrower shall fail to pay any principal on the
Loans when due, or shall fail to pay any interest, fees or any other
Obligations when due or within three Business Days thereafter;
(b) The Borrower or any Subsidiary shall fail or neglect
to observe, perform or comply with any term, provision, condition or
covenant contained in SECTIONS 5.3(C) or 5.4(I) or in ARTICLE VI of
this Credit Agreement;
(c) The Borrower shall fail or neglect to observe,
perform or comply with any other term, provision, condition or
covenant contained in this Credit Agreement, except those enumerated
in SECTIONS 7.1(A) and 7.1(B) above, and the same is not cured within
thirty (30) days after the Borrower acquires knowledge thereof;
(d) Any representation or warranty made in writing by or
on behalf of the Borrower or any Subsidiary in this Credit Agreement
or the other Loan Documents or in any certificate, instrument or
document delivered in connection herewith or therewith, or in
connection with the transactions contemplated hereby or thereby, shall
prove to have been false or incorrect in any material respect at the
time as of which such representation or warranty was made;
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(e) The Borrower or any Subsidiary shall fail to observe,
perform or comply with any term, condition or covenant contained in any
of the Loan Documents other than this Agreement, and such failure shall
continue unremedied for any grace period specifically applicable
thereto or, if no specific grace period is applicable, for a period of
thirty (30) days after Borrower acquires knowledge thereof;
(f) Any Borrower Affiliate shall fail to pay when due,
whether by scheduled maturity, acceleration or otherwise (taking into
account any applicable grace period), any principal of, interest on or
other amount payable in respect of any Indebtedness (other than the
Indebtedness incurred pursuant to this Agreement) having an aggregate
principal amount of at least $10,000,000; any other default or event
of default shall occur under the terms of any agreement or instrument
pursuant to which a Borrower Affiliate has incurred any such
Indebtedness, the effect of which default or event of default is to
accelerate, or permit acceleration of (after any applicable grace
period, notice or lapse of time), the maturity of at least $10,000,000
in principal amount of such Indebtedness; or any such Indebtedness of
a Borrower Affiliate shall be declared to be due and payable or
required to be prepaid or redeemed (other than pursuant to a regular
schedule therefor), purchased or defeased, or an offer to prepay,
redeem, purchase or defease shall be required to be made, in each case
prior to the stated maturity thereof;
(g) The institution of an action or proceeding by any
Governmental Authority seeking to place the Insurance Subsidiary under
supervision, conservation or rehabilitation, or the appointment of a
receiver of any such entity;
(h) Any Borrower Affiliate shall (i) file a voluntary
petition or commence a voluntary case seeking liquidation,
reorganization, dissolution, arrangement, readjustment of debts or any
other relief under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, (ii)
consent to the appointment of or taking possession by a custodian,
trustee, receiver or similar official for or of all or a substantial
part of its properties, (iii) fail generally to pay its debts as they
become due or admit in writing its inability to pay its debts
generally as they become due, (iv) make a general assignment for the
benefit of creditors or (v) take any corporate action to authorize or
approve any of the actions described above;
(i) Any involuntary petition or case shall be filed or
commenced against a Borrower Affiliate seeking liquidation,
reorganization, dissolution, arrangement, readjustment of debts, the
appointment of a custodian, trustee, receiver or similar official for
it or all or a substantial part of its properties or any other relief
under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect, which petition
or case is not dismissed, bonded or discharged within sixty (60) days
of the date of filing; or an order for relief (including, without
limitation, the appointment of a custodian, trustee, receiver or
similar official) shall be entered in any such proceeding, which order
is not immediately stayed or made subject to other similar relief;
(j) Any Borrower Affiliate shall (i) cease to be Solvent,
or (ii) be enjoined, restrained or in any way prevented by order of
court or any other Governmental Authority from conducting all or any
material part of its business affairs;
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(k) Any one or more judgments, writs or warrants of
attachment, executions or similar processes involving an aggregate
amount in excess of $10,000,000 shall be entered or filed against any
Borrower Affiliate or any of its respective properties, and all such
judgments and processes shall not be dismissed, vacated, stayed,
discharged or bonded for a period of thirty (30) days or in any event
later than five (5) days prior to the date of any proposed sale
thereunder, and, if bonded, such bond (or a replacement bond) shall not
continue in effect at all times until such judgment is dismissed or
discharged;
(l) Any lien, levy or assessment, or notice thereof,
shall be filed of record with respect to all or any portion of the
assets of any Borrower Affiliate by the United States, or any
department, agency or instrumentality thereof, or by any other
Governmental Authority, including, without limitation, the Pension
Benefit Guaranty Corporation; such lien, levy or assessment, taken
together with all other Liens, levies or assessments then of record
with respect to the assets of the Borrower Affiliates, taken as a
whole, exceeds $10,000,000; and such lien, levy or assessment shall be
executed upon or shall not be paid, dismissed, vacated, stayed,
released, bonded or discharged within thirty (30) days after the same
becomes a lien or, in the case of a lien involving ad valorem taxes,
prior to the last day when payment may be made without penalty;
(m) Any one or more licenses, permits or authorizations
now or hereafter held by any Insurance Subsidiary shall be terminated,
suspended or revoked or shall not be renewed, which terminations,
suspensions, revocations or failures to renew would, individually or
in the aggregate, be likely, in the reasonable judgement of the
Required Lenders, to have a Material Adverse Effect;
(n) Any Loan Document, at any time after execution and
delivery thereof, shall for any reason cease, in any material respect,
to be a legal, valid and binding obligation of the Borrower (and any
party that becomes a party thereto after the Closing Date),
enforceable against such party, or to give the Agent the rights,
powers and remedies purported to be created thereby, in each case
unless any such cessation is due to any act or failure to act on the
part of the Agent or any Lender;
(o) The occurrence of any of the following events: (i)
the happening of a Reportable Event (which is not waived by the
Pension Benefit Guaranty Corporation) with respect to any Employee
Plan; (ii) the termination of any Employee Plan in a "distress
termination" under the provisions of section 4041 of ERISA; (iii) the
appointment of a trustee by an appropriate United States District
Court to administer any Employee Plan; (iv) the institution of any
proceedings by the Pension Benefit Guaranty Corporation to terminate
any Employee Plan or to appoint a trustee to administer any such plan;
and (v) the failure of the Borrower to notify the Agent promptly upon
receipt by a Borrower Affiliate of any notice of the institution of
any proceeding or any other actions that may result in the termination
of any such plan;
(p) Any change is made in the Insurance Code that affects
the dividend practices of the Insurance Subsidiary and that could
reasonably be expected to have a Material Adverse Effect on such
entity or the Borrower or the ability of the Borrower to perform its
Obligations under the Loan Documents;
(q) Any event or events occur that individually or in the
aggregate has had or could be expected, in the reasonable judgement of
the Required Lenders, to have a Material Adverse
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Effect on the Borrower or the Insurance Subsidiary and that is not
capable of being rectified (as reasonably determined by the Required
Lenders) to prevent such Material Adverse Effect, or, if capable of
being so rectified (as so determined), is not rectified within sixty
(60) days after such event occurs; or
(r) A Change in Ownership occurs.
ARTICLE VIII
RIGHTS AND REMEDIES AFTER EVENT OF DEFAULT;
INTERCREDITOR PROVISIONS
8.1 RIGHTS AND REMEDIES. Upon and at any time after the
occurrence and during the continuance of any Event of Default, unless such
Event of Default shall have been waived in accordance with SECTION 11.9, the
Agent may, with the consent of the Required Lenders, or shall, upon request of
the Required Lenders, by notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of any Lender to enforce its
claims against the Borrower, except as otherwise specifically provided for in
this Credit Agreement: (i) declare the Total Commitment terminated, whereupon
the Commitment of each Lender shall forthwith terminate immediately and any
fees payable in respect thereof shall forthwith become due and payable without
any other notice of any kind; (ii) declare all or any part of the Obligations
owing hereunder immediately due and payable, whereupon such Obligations shall
become immediately due and payable without presentment, demand, protest, notice
or legal process of any kind, all of which are hereby expressly waived by the
Borrower and/or (iii) exercise all of the rights and remedies of the Lenders
under this Credit Agreement, the other Loan Documents and applicable law
(including, without limitation, the Lenders' rights under SECTION 8.2 hereof),
in order to satisfy all of the Borrower's Obligations; provided, however, that
all obligations shall automatically become due and payable upon the occurrence
of an Event of Default pursuant to SECTIONS 7.1(G), (H) or (I) hereof.
8.2 SET-OFF. The Borrower agrees that, in addition to any rights
now or hereafter granted under applicable law or otherwise, the Agent and each
of the Lenders shall have, and are hereby granted by the Borrower and
authorized to exercise, all rights of set-off provided by applicable law (to
the fullest extent thereof) and, in addition thereto, the Borrower agrees that
at any time (a) any payment or amount owing by the Borrower under or in
connection with this Credit Agreement or the Loan Documents is then due or (b)
any Event of Default exists, each Lender or the Agent, without advance notice
to the Borrower of any kind (any such notice being expressly waived by the
Borrower), may set-off and apply to the payment of such payment or other amount
any and all balances, credits, deposits, accounts or moneys (general or
special, time or demand, provisional or final) at any time held and any other
Indebtedness at any time owing by the Agent or any Lender to or for the credit
or the account of the Borrower against any or all of the Obligations of the
Borrower to the Agent or any Lender under this Credit Agreement or any other
Loan Document, now or hereafter existing, whether or not such Obligations have
matured. The Agent and each Lender agree promptly to notify the Borrower after
any such set-off or application by it, provided that the failure to give such
notice shall not affect the validity of such set-off or application.
8.3 INTERCREDITOR PROVISIONS. (a) Upon the occurrence and
during the continuance of an Event of Default, the proceeds of any collection
actions or claims payable to the Agent, for the benefit of
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the Lenders, and all payments made to the Agent, for the benefit of the Lenders,
under this Agreement, the Notes and any of the other Loan Documents, shall be
applied by the Agent in the following order:
(i) First, to the payment in full of all reasonable costs
and expenses incurred by the Agent, on behalf of the
Lenders, in connection with the collection of the
Obligations, including, without limitation,
out-of-pocket costs, court costs, attorneys' fees and
all liabilities and advances incurred by the Agent in
connection therewith, and all other fees, expenses
and amounts due to the Agent hereunder and under the
other Loan Documents (it is intended that expenses
shared by the Lenders, including the Agent, be
reimbursed on a pro rata basis pursuant to this
clause (i);
(ii) Second, to the payment in full of all reasonable
costs and expenses incurred by the Lenders in
connection with the collection of the Obligations,
including, without limitation, out-of-pocket costs,
court costs attorneys' fees and all liabilities and
advances incurred by the Lenders in connection
therewith, but only to the extent that such costs and
expenses are required to be paid hereunder and under
the other Loan Documents;
(iii) Third, to the payment in full of all interest with
respect to the Obligations accrued and unpaid as of
the date of the Agent's receipt of such proceeds, pro
rata to each Lender based on the percentage that the
amount of such interest owed to such Lender bears to
the aggregate amount of such interest owed to all
Lenders;
(iv) Fourth, to the payment in full of all remaining
Obligations (including, without limitation, principal
on the Loans) outstanding and unpaid as of the date
of the Agent's receipt of such proceeds, pro rata to
each Lender based on the percentage that the amount
of such Obligations owed to such Lender bears to the
aggregate amount of such Obligations owed to all
Lenders; and
(v) The balance, to the Borrower or to such other Persons
as may be required by law.
(b) Each Lender agrees that it shall not, unless
specifically requested to do so by the Agent, commence or cause to be
commenced against the Borrower any enforcement proceeding with respect
to a Note or this Credit Agreement.
8.4 RIGHTS AND REMEDIES CUMULATIVE; NON-WAIVER; ETC. The
enumeration of the Lenders' rights and remedies set forth in this Credit
Agreement is not intended to be exhaustive and the exercise by any Lender of
any right or remedy shall not preclude the exercise of any other rights or
remedies, all of which shall be cumulative, and shall be in addition to any
other right or remedy given hereunder, under the Loan Documents or under any
other agreement between any of the Borrower Affiliates and any of the Lenders
or which may now or hereafter exist in law or in equity or by suit or
otherwise. No delay or failure to take action on the part of the Agent or any
Lender in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude other or further exercise thereof or the exercise of any
other right, power or privilege or shall be construed to be a waiver of any
Event of Default. No course of dealing between the Borrower and the Agent or
any Lender or the agents or employees of either of them shall be effective to
change,
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modify or discharge any provision of this Agreement or to constitute a waiver of
any Default or Event of Default.
ARTICLE IX
THE AGENT
9.1 APPOINTMENT. Each Lender hereby irrevocably appoints and
authorizes First Union to act as Agent hereunder and under the other Loan
Documents and to take such actions as agent on its behalf hereunder and under
the other Loan Documents, and to exercise such powers and to perform such
duties, as are specifically delegated to the Agent by the terms hereof or
thereof, together with such other powers and duties as are reasonably
incidental thereto.
9.2 NATURE OF DUTIES. The Agent shall have no duties or
responsibilities other than those expressly set forth in this Agreement and the
other Loan Documents. The Agent shall not have, by reason of this Agreement or
any other Loan Document, a fiduciary relationship in respect of any Lender; and
nothing in this Agreement or any other Loan Document, express or implied, is
intended to or shall be so construed as to impose upon the Agent any
obligations or liabilities in respect of this Agreement or any other Loan
Document except as expressly set forth herein or therein. The Agent may
execute any of its duties under this Agreement or any other Loan Document by or
through agents or attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact that it selects
with reasonable care. The Agent shall be entitled to consult with legal
counsel, independent public accountants and other experts selected by it with
respect to all matters pertaining to this Agreement and the other Loan
Documents and its duties hereunder and thereunder and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts. The Lenders hereby
acknowledge that the Agent shall not be under any duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Agreement or any other Loan Document unless it shall be requested in
writing to do so by the Required Lenders (or, where a higher percentage of the
Lenders is expressly required hereunder, such Lenders).
9.3 EXCULPATORY PROVISIONS. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall
be (i) liable for any action taken or omitted to be taken by it or such Person
under or in connection with the Loan Documents, except for its or such Person's
own gross negligence or willful misconduct, (ii) responsible in any manner to
any Lender for any recitals, statements, information, representations or
warranties herein or in any other Loan Document or in any document, instrument,
certificate, report or other writing delivered in connection herewith or
therewith, for the execution, effectiveness, genuineness, validity,
enforceability or sufficiency of this Agreement or any other Loan Document, or
for the financial condition of the Borrower, its Subsidiaries or any other
Person, or (iii) required to ascertain or make any inquiry concerning the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Loan Document or the existence or possible existence of
any Default or Event of Default, or to inspect the properties, books or records
of the Borrower or any of its Subsidiaries.
9.4 RELIANCE BY AGENT. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any notice, statement, consent or
other communication (including, without limitation, any thereof by telephone,
telecopy, telex, telegram or cable) believed by it in good faith to be genuine
and
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correct and to have been signed, sent or made by the proper Person or Persons.
The Agent may deem and treat each Lender as the owner of its interest hereunder
for all purposes hereof unless and until a written notice of the assignment,
negotiation or transfer thereof shall have been given to the Agent in
accordance with the provisions of this Agreement. The Agent shall be entitled
to refrain from taking or omitting to take any action in connection with this
Agreement or any other Loan Document (i) if such action or omission would, in
the reasonable opinion of the Agent, violate any applicable law or any
provision of this Agreement or any other Loan Document or (ii) unless and until
it shall have received such advice or concurrence of the Required Lenders (or,
where a higher percentage of the Lenders is expressly required hereunder, such
Lenders) as it deems appropriate or it shall first have been indemnified to its
satisfaction by the Lenders against any and all liability and expense (other
than liability and expense arising from its own gross negligence or willful
misconduct) that may be incurred by it by reason of taking, continuing to take
or omitting to take any such action. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Agent as a result of the
Agent's acting or refraining from acting hereunder or under any other Loan
Document in accordance with the instructions of the Required Lenders (or, where
a higher percentage of the Lenders is expressly required hereunder, such
Lenders), and such instructions and any action taken or failure to act pursuant
thereto shall be binding upon all of the Lenders (including all subsequent
Lenders).
9.5 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representation or warranty to it and that no act by the Agent or any such
Person hereafter taken, including any review of the affairs of the Borrower and
its Subsidiaries, shall be deemed to constitute any representation or warranty
by the Agent to any Lender. Each Lender represents to the Agent that (i) it
has, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects, operations,
properties, financial and other condition and creditworthiness of the Borrower
and its Subsidiaries and made its own decision to enter into this Agreement and
extend credit to the Borrower hereunder, and (ii) it will, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
hereunder and under the other Loan Documents and to make such investigation as
it deems necessary to inform itself as to the business, prospects, operations,
properties, financial and other condition and creditworthiness of the Borrower
and its Subsidiaries. Except as expressly provided in this Agreement and the
other Loan Documents, the Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information concerning the business, prospects, operations, properties,
financial or other condition or creditworthiness of the Borrower, its
Subsidiaries or any other Person that may at any time come into the possession
of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
9.6 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Agent shall have received written notice from the Borrower or a Lender
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." In the event that the Agent
receives such a notice, the Agent will give notice thereof to the Lenders as
soon as reasonably practicable; PROVIDED, HOWEVER, that if any such notice has
also been furnished to the Lenders, the Agent shall have no obligation to
notify the Lenders with respect thereto. The Agent shall (subject to SECTIONS
9.4 and 11.9) take such action with respect to such Default or Event of Default
as shall reasonably be directed by the Required Lenders; PROVIDED that, unless
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and until the Agent shall have received such directions, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.
9.7 INDEMNIFICATION. To the extent the Agent is not reimbursed
by or on behalf of the Borrower, and without limiting the obligation of the
Borrower to do so, the Lenders agree (i) to indemnify the Agent and its
officers, directors, employees, agents, attorneys-in-fact and Affiliates,
ratably in proportion to their respective percentages as used in determining
the Required Lenders as of the date of determination, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including, without limitation, attorneys' fees and
expenses) or disbursements of any kind or nature whatsoever that may at any
time (including, without limitation, at any time following the repayment in
full of the Loans and the termination of the Commitments) be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any documents contemplated by
or referred to herein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Agent under or in connection with any of the
foregoing, and (ii) to reimburse the Agent upon demand, ratably in proportion
to their respective percentages as used in determining the Required Lenders as
of the date of determination, for any expenses incurred by the Agent in
connection with the preparation, negotiation, execution, delivery,
administration, amendment, modification, waiver or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement or any of the other Loan
Documents (including, without limitation, reasonable attorneys' fees and
expenses and compensation of agents and employees paid for services rendered on
behalf of the Lenders); PROVIDED, HOWEVER, that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent
resulting from the gross negligence or willful misconduct of the party to be
indemnified.
9.8 THE AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its
Commitment, the Loans made by it, the Letters of Credit issued or participated
in by it and the Note or Notes issued to it, the Agent in its individual
capacity and not as Agent shall have the same rights and powers under the Loan
Documents as any other Lender and may exercise the same as though it were not
performing the agency duties specified herein; and the terms "Lenders,"
"Required Lenders," "holders of Notes" and any similar terms shall, unless the
context clearly otherwise indicates, include the Agent in its individual
capacity. The Agent and its Affiliates may accept deposits from, lend money
to, make investments in, and generally engage in any kind of banking, trust,
financial advisory or other business with the Borrower, any of its Subsidiaries
or any of their respective Affiliates as if the Agent were not performing the
agency duties specified herein, and may accept fees and other consideration
from any of them for services in connection with this Agreement and otherwise
without having to account for the same to the Lenders.
9.9 SUCCESSOR AGENT. The Agent may resign at any time by
giving ten (10) days' prior written notice to the Borrower and the Lenders.
Upon any such notice of resignation, the Required Lenders will, with the prior
written consent of the Borrower (which consent shall not be unreasonably
withheld), appoint from among the Lenders a successor to the Agent (PROVIDED
that the Borrower's consent shall not be required in the event a Default or
Event of Default shall have occurred and be continuing). If no successor to
the Agent shall have been so appointed by the Required Lenders and shall have
accepted such appointment within such ten-day period, then the retiring Agent
may, on behalf of the Lenders and after consulting with the Lenders and the
Borrower, appoint a successor Agent from among the Lenders. Upon the
acceptance of any appointment as Agent by a successor Agent, such successor
Agent shall
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thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder and under the other Loan Documents.
After any retiring Agent's resignation as Agent, the provisions of this Article
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent. If no successor to the Agent has accepted appointment as
Agent by the thirtieth (30th) day following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective, and the Lenders shall thereafter perform all of the duties of
the Agent hereunder and under the other Loan Documents until such time, if any,
as the Required Lenders appoint a successor Agent as provided for hereinabove.
9.10 CO-AGENT. Notwithstanding any other provision of this
Agreement or any of the other Loan Documents, the Co-Agent is named as such for
recognition purposes only, and in its capacity as such shall have no powers,
rights, duties, responsibilities or liabilities with respect to this Agreement
and the other Loan Documents and the transactions contemplated hereby and
thereby.
ARTICLE X
ASSIGNMENTS AND PARTICIPATIONS
10.1 ASSIGNMENTS. (a) Each Lender may assign to one or more
other Eligible Assignees (each, an "Assignee") all or a portion of its rights
and obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the outstanding Loans made by it and the Note or
Notes held by it); PROVIDED, HOWEVER, that (i) any such assignment (other than
an assignment to a Lender or an Affiliate of a Lender) shall not be made
without the prior written consent of the Agent and the Borrower (to be
evidenced by their counterexecution of the relevant Assignment and Acceptance),
which consent shall not be unreasonably withheld, (ii) except in the case of an
assignment to a Lender or an Affiliate of a Lender, the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to each such assignment) shall in no event be less than the lesser of
(y) the entire Commitment of such Lender immediately prior to such assignment
or (z) $5,000,000, and (iii) the parties to each such assignment will execute
and deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note or Notes subject to such
assignment, and will pay a nonrefundable processing fee of $2,500 to the Agent
for its own account. Upon such execution, delivery, acceptance and recording
of the Assignment and Acceptance, from and after the effective date specified
therein, which effective date shall be at least five Business Days after the
execution thereof (unless the Agent shall otherwise agree), (A) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of the assigning Lender
hereunder with respect thereto and (B) the assigning Lender shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights (other than rights
under the provisions of this Agreement and the other Loan Documents relating to
indemnification or payment of fees, costs and expenses, to the extent such
rights relate to the time prior to the effective date of such Assignment and
Acceptance) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of such assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto). The terms and provisions of each
Assignment and Acceptance shall, upon the effectiveness thereof, be
incorporated into and made a part of this
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Agreement, and the covenants, agreements and obligations of each Lender set
forth therein shall be deemed made to and for the benefit of the Agent and the
other parties hereto as if set forth at length herein.
(b) The Agent will maintain at its address for notices referred
to herein a copy of each Assignment and Acceptance delivered to and accepted by
it and a register for the recordation of the names and addresses of the Lenders
and the Commitments of, and principal amount of the Loans owing to, each Lender
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower and
each Lender at any reasonable time and from time to time upon reasonable prior
notice.
(c) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an Assignee and counterexecuted
by the Borrower (if required), together with the Notes subject to such
assignment and the processing fee referred to in subsection (a) above, the
Agent will (i) accept such Assignment and Acceptance, (ii) on the effective
date thereof, record the information contained therein in the Register and
(iii) give notice thereof to the Borrower and the Lenders. Within five (5)
Business Days after its receipt of such notice, the Borrower, at its own
expense, will execute and deliver to the Agent in exchange for the surrendered
Notes (y) a new Committed Loan Note to the order of such Assignee in a
principal amount equal to the principal amount of the Commitment (or, if the
Commitments have been terminated, the principal amount of the Committed Loans)
assumed by it pursuant to such Assignment and Acceptance and, to the extent the
assigning Lender has retained its Committed Loans and/or Commitment hereunder,
a new Committed Loan Note to the order of the assigning Lender in an amount
equal to the principal amount of the Commitment (or, if the Commitments have
been terminated, the principal amount of the Committed Loans) retained by it
hereunder, and (z) a new Bid Loan Note to the order of such Assignee in a
principal amount equal to the Total Commitment. Such new Notes shall be dated
the date of the replaced Notes and shall otherwise be in substantially the
forms of EXHIBITS A-1 and A-2, as applicable. The Agent will return cancelled
Notes to the Borrower.
10.2 PARTICIPATIONS. Each Lender may, without the consent of
the Borrower, the Agent or any other Lender, sell to one or more other Persons
(each, a "Participant") participations in any portion comprising less than all
of its rights and obligations under this Agreement (including, without
limitation, a portion of its Commitment, the outstanding Loans made by it and
the Note or Notes held by it); PROVIDED, HOWEVER, that (i) such Lender's
obligations under this Agreement shall remain unchanged and such Lender shall
remain solely responsible for the performance of such obligations, (ii) the
principal amount of the participation shall not be less than $3,000,000 and no
Lender shall sell any participation that, when taken together with all other
participations, if any, sold by such Lender, covers all of such Lender's rights
and obligations under this Agreement, (iii) the Borrower, the Agent 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
no Lender shall permit any Participant to have any voting rights or any right
to control the vote of such Lender with respect to any amendment, modification,
waiver, consent or other action hereunder or under any other Loan Document
(except as to actions that would (x) reduce or forgive the principal amount of,
or rate of interest on, any Loan, or reduce or forgive any fees or other
Obligations, (y) extend any date (including the Maturity Date) fixed for the
payment of any principal of or interest on any Loan, any fees or any other
Obligations, or (z) increase any Commitment of any Lender), and (iv) no
Participant shall have any rights under this Agreement or any of the other Loan
Documents, each Participant's rights against the granting Lender in respect of
any participation to be those set forth in the
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participation agreement, and all amounts payable by the Borrower hereunder
shall be determined as if such Lender had not granted such participation.
Notwithstanding the foregoing, each Participant shall have the rights of a
Lender for purposes of SECTIONS 2.17(A), 2.17(B), 2.18, 2.19 and 8.2, and shall
be entitled to the benefits thereto, to the extent that the Lender granting
such participation would be entitled to such benefits if the participation had
not been made, provided that no Participant shall be entitled to receive any
greater amount pursuant to any of such Sections than the Lender granting such
participation would have been entitled to receive in respect of the amount of
the participation made by such Lender to such Participant had such
participation not been made.
10.3 MISCELLANEOUS. (a) The Agent and each Lender may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this Section, disclose to the assignee or
participant, or proposed assignee or participant, any information relating to
the Borrower and its Subsidiaries furnished to it by or on behalf of any other
party hereto.
(b) Nothing herein shall prohibit the pledging by any Lender of
any Note to any Federal Reserve Bank in accordance with applicable law.
ARTICLE XI
MISCELLANEOUS
11.1 FEES AND EXPENSES. Whether or not the transactions
contemplated by this Agreement shall be consummated, the Borrower shall be
obligated:
(a) to pay or reimburse the Agent upon demand and after notice
in accordance with SECTION 11.5 for all reasonable expenses (including, without
limitation, attorneys' fees, but excluding salaries of the Agent's regularly
employed personnel and overhead) incurred or paid by the Agent in connection
with: (i) the preparation, execution, delivery, interpretation, modification,
amendment or termination of this Agreement or the other Loan Documents or any
consent or waiver requested by the Borrower hereunder or thereunder; (ii)
charges for appraisers, examiners, environmental consultants, auditors or
similar Persons whom the Agent may engage with respect to rendering opinions
concerning the financial condition of the Borrower and its Subsidiaries; and
(iii) any commercially reasonable attempt to inspect, verify, protect,
preserve, collect, sell, liquidate or otherwise dispose of assets of the
Borrower or any Subsidiary;
(b) to pay or reimburse the Agent and each Lender upon demand
and after notice in accordance with SECTION 11.5 for all reasonable expenses
(including, without limitation, attorneys' fees, but excluding salaries of the
Agent's or such Lender's regularly employed personnel and overhead) incurred or
paid by the Agent or such Lender in connection with: (i) any litigation,
contest, dispute, suit or proceeding or action (whether instituted by the
Agent, the Lenders, or any of them, the Borrower or any other Person) in any
way relating to this Agreement or the other Loan Documents or to the Borrower's
or any Subsidiary's affairs (other than a dispute solely between or among the
Lenders); (ii) any attempt by the Agent or such Lender to enforce any of its
rights against the Borrower or any other Person that may be obligated to the
Agent or such Lender by virtue of this Agreement or the other Loan Documents;
and (iii) any refinancing or restructuring of the credit arrangement provided
under this Agreement in the nature of a "work-out" or in any insolvency or
bankruptcy proceeding;
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(c) to pay and hold the Agent and each Lender harmless from and
against any and all liability and loss with respect to or resulting from the
nonpayment or delayed payment of any and all intangibles, documentary stamp and
other similar taxes, fees and excises, if any, including any interest and
penalties, that may be, or be determined to be, payable in connection with the
transactions contemplated by this Agreement and the other Loan Documents or in
any modification hereof or thereof; and
(d) to pay and hold the Agent and each Lender harmless from and
against any and all finder's or brokerage fees and commissions that may be
payable in connection with the transactions contemplated by this Agreement and
the other Loan Documents, other than any fees or commissions of finders or
brokers engaged by the Agent or any Lender.
11.2 SURVIVAL OF AGREEMENTS. All agreements, representations
and warranties contained herein or made in writing by or on behalf of the
Borrower in connection with the transactions contemplated hereby shall survive
the execution and delivery of this Credit Agreement and the other Loan
Documents. No termination or cancellation (regardless of cause or procedure)
of this Credit Agreement shall in any way affect or impair the powers,
obligations, duties, rights and liabilities of the parties hereto in any way
with respect to (a) any transaction or event occurring prior to such
termination or cancellation, or (b) any of the Borrower's undertakings,
agreements, covenants, warranties and representations contained in this Credit
Agreement and the other Loan Documents and all such undertakings, agreements,
covenants, warranties and representations shall survive such termination or
cancellation until payment in full of the Obligations. The Borrower further
agrees that to the extent the Borrower makes a payment or payments to the
Lenders, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy, insolvency or similar state or federal law, common law or equitable
cause, then, to the extent of such payment or repayment, the Obligation or part
thereof intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been received by the Lenders.
11.3 GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS HAVE BEEN EXECUTED, DELIVERED AND ACCEPTED IN, AND
SHALL BE DEEMED TO HAVE BEEN MADE IN, NORTH CAROLINA AND SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA (WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF). THE
BORROWER HEREBY CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE COURT
WITHIN MECKLENBURG COUNTY, NORTH CAROLINA OR ANY FEDERAL COURT LOCATED WITHIN
THE WESTERN DISTRICT OF THE STATE OF NORTH CAROLINA FOR ANY PROCEEDING
INSTITUTED HEREUNDER OR UNDER ANY OF THE OTHER LOAN DOCUMENTS, OR ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR
ANY PROCEEDING TO WHICH THE AGENT OR ANY LENDER OR THE BORROWER IS A PARTY,
INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN CONNECTION WITH, ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF THE AGENT OR ANY LENDER OR THE BORROWER. THE BORROWER IRREVOCABLY
AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF APPEAL) BY ANY JUDGMENT
RENDERED OR RELIEF GRANTED THEREBY AND FURTHER WAIVES ANY OBJECTION THAT IT MAY
HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE OR FORUM NON CONVENIENS TO
THE CONDUCT OF ANY SUCH PROCEEDING. THE BORROWER CONSENTS THAT ALL SERVICE OF
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PROCESS BE MADE BY REGISTERED OR CERTIFIED MAIL DIRECTED TO IT AT ITS ADDRESS
SET FORTH HEREINBELOW, AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON
THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE
UNITED STATES MAILS, PROPER POSTAGE PREPAID AND PROPERLY ADDRESSED. NOTHING IN
THIS SECTION SHALL AFFECT THE RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY PARTY TO BRING ANY ACTION OR
PROCEEDING AGAINST ANY OTHER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
11.4 ARBITRATION; PRESERVATION AND LIMITATION OF REMEDIES. (a)
Upon demand of any party hereto, whether made before or after institution of
any judicial proceeding, any dispute, claim or controversy arising out of,
connected with or relating to this Agreement or any other Loan Document
("Disputes") between or among the Borrower, the Agent and the Lenders, or any
of them, shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of
that party to demand arbitration hereunder. Disputes may include, without
limitation, tort claims, counterclaims, claims brought as class actions, claims
arising from documents executed in the future, or claims arising out of or
connected with the transactions contemplated by this Agreement and the other
Loan Documents. Arbitration shall be conducted under and governed by the
Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules") of
the American Arbitration Association (the "AAA"), as in effect from time to
time, and Title 9 of the U.S. Code, as amended. All arbitration hearings shall
be conducted in the city in which the principal office of the Agent is located.
The expedited procedures set forth in Rule 51 et seq. of the Arbitration Rules
shall be applicable to claims of less than $1,000,000. All applicable statutes
of limitation shall apply to any Dispute. A judgment upon the award may be
entered in any court having jurisdiction. The panel from which all arbitrators
are selected shall be comprised of licensed attorneys. The single arbitrator
selected for expedited procedure shall be a retired judge from the highest
court of general jurisdiction, state or federal, of the state where the hearing
will be conducted. Notwithstanding the foregoing, this arbitration provision
does not apply to Disputes under or related to Rate Protection Agreements.
(b) Notwithstanding the preceding binding arbitration
provisions, the parties hereto agree to preserve, without diminution, certain
remedies that any party hereto may employ or exercise freely, either alone, in
conjunction with or during a Dispute. Any party hereto shall have the right to
proceed in any court of proper jurisdiction or by self-help to exercise or
prosecute the following remedies, as applicable: (i) all rights to foreclose
against any Collateral by exercising a power of sale granted pursuant to any of
the Loan Documents or under applicable law or by judicial foreclosure and sale,
including a proceeding to confirm the sale; (ii) all rights of self-help,
including peaceful occupation of real property and collection of rents,
set-off, and peaceful possession of personal property; (iii) obtaining
provisional or ancillary remedies, including injunctive relief, sequestration,
garnishment, attachment, appointment of a receiver and filing an involuntary
bankruptcy proceeding; and (iv) when applicable, a judgment by confession of
judgment. Preservation of these remedies does not limit the power of an
arbitrator to grant similar remedies that may be requested by a party in a
Dispute. The parties hereto agree that no party shall have a remedy of
punitive or exemplary damages against any other party in any Dispute, and each
party hereby waives any right or claim to punitive or exemplary damages that it
has now or that may arise in the future in connection with any Dispute, whether
such Dispute is resolved by arbitration or judicially.
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11.5 NOTICE. All notices and other communications hereunder
shall be in writing and shall be deemed to have been validly served, given or
delivered five (5) days after deposit in the United States mails with postage
prepaid, and addressed to the party to be notified as follows:
If to the Borrower: Western National Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile Number: ▇▇▇-▇▇▇-▇▇▇▇
If to the Agent at: First Union National Bank of
North Carolina
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Syndication Agency Services
Facsimile Number: ▇▇▇-▇▇▇-▇▇▇▇
and, if to any Lender, to it at the address for notices set forth on its
signature page hereto (or if to any Lender not a party hereto as of the date
hereof, at the address for notices set forth in its Assignment and Acceptance);
or in each case, to such other address as any party may designate for itself by
like notice to all other parties hereto. All such notices and communications
shall be deemed to have been given (i) if mailed as provided above by any
method other than overnight delivery service, on the third Business Day after
deposit in the mails, (ii) if mailed by overnight delivery service,
telegraphed, telexed, telecopied or cabled, when delivered for overnight
delivery, delivered to the telegraph company, confirmed by telex answerback,
transmitted by telecopier or delivered to the cable company, respectively, or
(iii) if delivered by hand, upon delivery; provided that notices and
communications to the Agent shall not be effective until received by the Agent.
11.6 INDEMNIFICATION OF THE AGENT AND THE LENDERS. From and at
all times after the date of this Agreement, and in addition to all of the
Agent's and the Lenders' other rights and remedies against the Borrower, the
Borrower agrees to indemnify and hold harmless the Agent and each Lender and
each director, officer, employee, agent and Affiliate of the Agent and each
Lender against any and all claims, losses, damages, liabilities, costs and
expenses of any kind or nature whatsoever (including without limitation
reasonable attorneys' fees, costs and expenses) incurred by or asserted against
the Agent or such Lender or any such director, officer, employee, agent or
Affiliate, from and after the date hereof, whether direct, indirect or
consequential, as a result of or arising from or in any way relating to any
suit, action or proceeding (including any inquiry or investigation) by any
Person other than the Borrower, whether threatened or initiated, asserting a
claim for any legal or equitable remedy against any Person under any statute or
regulation, including, but not limited to, any federal or state securities
laws, or under any common law or equitable cause or otherwise, arising from or
in connection with the negotiation, preparation, execution or performance of
this Credit Agreement or the other Loan Documents or any transactions
contemplated herein or therein, including without limitation the actual or
alleged generation, presence or release of any Hazardous Material on or from,
or the transportation of Hazardous Material to or from, any real property owned
or leased by the Borrower or any Subsidiary or any other violation of
Environmental Laws, whether or not the Agent or the Lender or any such
director, officer, employee, agent or Affiliate is a party to any such action,
proceeding, suit or the target of any such inquiry or
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investigation; provided, however, that no indemnified party shall have the right
to be indemnified hereunder for any liability resulting from the gross
negligence or wilful misconduct of such indemnified party as finally determined
by a court of competent jurisdiction and not subject to appeal, or pursuant to
arbitration as set forth in SECTION 11.4. All of the foregoing losses, damages,
costs and expenses of the Agent or any Lender shall be payable by the Borrower
upon demand by the Agent or the Lender and shall be additional Obligations
hereunder. The Borrower's obligations under this SECTION 11.6 shall survive any
termination of this Credit Agreement or any other Loan Document.
11.7 WAIVERS BY THE BORROWER. Except as otherwise provided for
in this Credit Agreement, the Borrower waives, to the extent permitted by
applicable law, (a) presentment, demand and protest and notice of presentment,
protest, default, nonpayment, maturity and all other notices; (b) any bond or
security that might be required by any court prior to allowing the Agent or any
Lender to exercise any of the Lenders' remedies under this Credit Agreement or
the other Loan Documents; and (c) the benefit of all valuation, appraisement
and exemption laws.
11.8 ASSIGNMENT AND SALE. The Borrower may not sell, assign or
transfer this Credit Agreement, or the other Loan Documents or any portion
thereof, including without limitation, the Borrower's rights, title, interests,
remedies, powers, and duties hereunder or thereunder.
11.9 AMENDMENT OR WAIVER. Except as may be otherwise
specifically set forth in this Agreement or the other Loan Documents, neither
this Agreement nor any other Loan Document nor any provision hereof or thereof
may be amended, modified, waived, discharged or terminated, and no consent to
any departure by the Borrower from any provision hereof or thereof may be
given, except in a writing signed by the Required Lenders; provided, however,
that:
(a) no such amendment, modification, waiver, discharge,
termination or consent shall, without the consent of each Lender holding
Obligations directly affected thereby, (i) reduce the principal amount of, or
rate of interest on, any Loan, or reduce any fees or other Obligations (other
than fees payable to the Agent for its own account) or any obligations of any
Person now or hereafter primarily or contingently liable with respect to the
Obligations or (ii) postpone any date fixed for any payment of principal,
interest (other than additional interest payable hereunder during the
continuance of an Event of Default), fees (other than fees payable to the Agent
for its own account) or any other Obligations;
(b) no such amendment, modification, waiver, discharge,
termination or consent shall, without the consent of all Lenders, (i) increase
the Commitments of any Lender (it being understood that a waiver of any Default
or Event of Default or of any mandatory reduction in the Total Commitment shall
not constitute such an increase), (ii) change the definition of "Required
Lenders" or otherwise change the number or percentage of Lenders that shall be
required for the Lenders or any of them to take or approve, or direct the Agent
to take, any action hereunder, (iii) amend, modify or waive any of the
provisions for extending, or take action to extend, the Loan Termination Date,
(iv) amend any provision of this Section or of SECTIONS 2.17, 2.18, 2.19 or
11.6, or (v) consent to the assignment or transfer by the Borrower, or by any
other Person now or hereafter primarily or contingently liable with respect to
the Obligations, of any of its rights and obligations under this Agreement or
any of the other Loan Documents;
(c) no provision relating to the rights or obligations of the
Agent under this Agreement or any of the other Loan Documents may be amended,
modified or waived without the consent of the Agent.
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11.10 SEVERABILITY. To the extent any provision of this
Agreement is prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Credit Agreement.
11.11 ENTIRE AGREEMENT. This Credit Agreement and the other
documents, certificates and instruments referred to herein constitute the
entire agreement between the parties and supersede and rescind any prior
agreements relating to the subject matter hereof. THIS WRITTEN AGREEMENT AND
THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN OR ORAL AGREEMENTS
BETWEEN THE PARTIES.
11.12 BINDING EFFECT. All of the terms of this Credit Agreement
and the other Loan Documents, as the same may from time to time be amended,
shall be binding upon, inure to the benefit of and be enforceable by the
respective successors and assigns of the Borrower, the Agent and the Lenders.
This provision, however, shall not be deemed to modify SECTION 11.8.
11.13 EXECUTION IN COUNTERPARTS. This Credit Agreement may be
executed in two or more counterparts, which when assembled shall constitute one
and the same agreement.
11.14 CONFLICT OF TERMS. The provisions of the exhibits hereto
and the other Loan Documents and any schedule or annex hereto are incorporated
in this Credit Agreement by this reference thereto. Except as otherwise
provided in this Credit Agreement and except as otherwise provided in the other
Loan Documents, if any provision contained in this Credit Agreement is in
conflict with, or inconsistent with, any provision of the other Loan Documents,
the provision contained in this Credit Agreement shall control.
11.15 INJUNCTIVE RELIEF. The Borrower recognizes that in the
event the Borrower fails to perform, observe or discharge any of its
obligations or liabilities under this Credit Agreement, any remedy of law may
prove to be inadequate relief to the Lenders. The Borrower therefore agrees
that the Lenders, if the Lenders so request, shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages.
11.16 SYNDICATION. The Borrower will, and will cause each of
its Subsidiaries to, use its best efforts to assist the Agent in the
syndication of the Loans and the resulting addition of Lenders after the date
hereof and after the Closing Date.
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IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be executed in their corporate names by their duly authorized
corporate officers as of the date first above written.
WESTERN NATIONAL CORPORATION
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice Chairman, General
Counsel and Chief Investment Officer
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FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Agent and as a Lender
Commitment:
$32,000,000
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Senior Vice President
Instructions for wire transfers to the
Agent:
First Union National Bank of
North Carolina
ABA Routing ▇▇. ▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
General Ledger No. 465906, RC No. 5007
Attention: Syndication Agency Services
Re: Western National Corporation
Address for notices (as a Lender):
First Union National Bank of
North Carolina
One First Union Center, 5th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office:
First Union National Bank of
North Carolina
One First Union Center, 5th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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TEXAS COMMERCE BANK, N.A., as Co-Agent and as a Lender
Commitment:
$27,000,000
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
Instructions for wire transfers to the
Co-Agent:
Texas Commerce Bank National Association
ABA Routing No. 113 000 609
Houston, Texas
General Ledger No. 13681-7800
Re: Western National Corporation 0040078923
Address for notices (as a Lender):
Texas Commerce Bank N.A.
▇▇▇ ▇▇▇▇, ▇-▇▇▇-▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: 713/▇▇▇-▇▇▇▇
Telecopy: 713/216-7500
Lending Office:
Texas Commerce Bank N.A.
▇▇▇ ▇▇▇▇, ▇-▇▇▇▇-▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: 713/▇▇▇-▇▇▇▇
Telecopy: 713/216-7500
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THE FUJI BANK, LIMITED, as a Lender
Commitment:
$21,000,000
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
Senior Vice President
Instructions for wire transfers to the
Lender:
Texas Commerce Bank
ABA Routing No. 113 000 609
Houston, TX
Account No. ▇▇▇▇-▇▇▇-▇▇▇▇
Attention: Loan Administration
Re: Western National Corporation
Address for notices:
The Fuji Bank, Limited
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Mr. Jay Fort
Telephone: 713/▇▇▇-▇▇▇▇
Telecopy: 713/759-0048
Lending Office:
The Fuji Bank, Limited
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇
Telephone: 713/▇▇▇-▇▇▇▇
Telecopy: 713/951-0590
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BANK OF TOKYO-MITSUBISHI TRUST COMPANY, as a
Lender
Commitment:
$21,000,000
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President & Manager
Instructions for wire transfers to the
Lender:
Bank of Tokyo-Mitsubishi Trust Company
ABA Routing No. ▇▇▇▇-▇▇▇▇-▇
City: New York
Short Name: BK TOKYO TR NYC
CIF# 97770477
Attention: Loan Administration Dept.
Re: Western National Corporation
Address for notices:
Bank of Tokyo-Mitsubishi Trust Company
1251 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telephone: 212/▇▇▇-▇▇▇▇
Telecopy: 212/782-4935
Lending Office:
Bank of Tokyo-Mitsubishi Trust Company
1251 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇
Telephone: 201/▇▇▇-▇▇▇▇
Telecopy: 201/766-3127
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ AGENCY,
as a Lender
Commitment:
$21,000,000
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
Instructions for wire transfers to the
Lender:
BNP New York
ABA Routing No. 026 007 689
New York
Name of Acct.: BNP Houston Agency
A/C#: 141011-001-69
Re: Western National Corporation
Address for notices:
Banque Nationale de Paris, Houston Agency
▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: 713/▇▇▇-▇▇▇▇
Telecopy: 713/659-1414
Lending Office:
Banque Nationale de Paris, Houston Agency
▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇
Telephone: 713/▇▇▇-▇▇▇▇
Telecopy: 713/659-1414
-77-
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, as a Lender
Commitment:
$18,000,000
By: /s/ F.C.H. ▇▇▇▇▇
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F.C.H. ▇▇▇▇▇
Senior Manager Loan Operations
Instructions for wire transfers to the
Lender:
The Bank of Nova Scotia
New York Agency
ABA Routing No. 026 002 532
For Further Credit to Atlanta Agency
Account No.: ▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Re: Western National Corporation
Address for notices:
The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: F.S.C. ▇▇▇▇▇
Telephone: 404/▇▇▇-▇▇▇▇
Telecopy: 404/888-8998
With a Copy To:
The Bank of Nova Scotia
Houston Representative ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: 713/▇▇▇-▇▇▇▇
Telecopy: 713/752-2425
Lending Office:
The Bank of Nova Scotia
Atlanta
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: F.S.C. ▇▇▇▇▇
Telephone: 404/▇▇▇-▇▇▇▇
-78-
85
Telecopy: 404/888-8998
CREDIT LYONNAIS NEW YORK BRANCH, as
a Lender
Commitment:
$10,000,000
By: /s/ ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇'▇▇▇▇▇▇
Senior Vice President
Instructions for wire transfers to the
Lender:
Federal Reserve Bank of New York
ABA Routing No. ▇▇▇-▇▇▇-▇▇▇
New York
Further Credit: 01-88179214000
Attention: Loan Servicing/▇.▇▇▇▇▇▇▇
Re: Western National Corporation
Address for notices:
Credit Lyonnais New York Branch
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: 212/▇▇▇-▇▇▇▇
Telecopy: 212/261-3401
Lending Office:
Credit Lyonnais New York Branch
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: 212/▇▇▇-▇▇▇▇
Telecopy: 212/261-3401
-79-