EXHIBIT 10.1
EXECUTION COPY
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$200,000,000
CREDIT AGREEMENT
among
INFINITY PROPERTY AND
CASUALTY CORPORATION,
as Borrower,
The Several Lenders
from Time to Time Parties Hereto,
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
and
▇▇▇▇▇▇ BROTHERS INC.,
as Joint Lead Arrangers
BEAR ▇▇▇▇▇▇▇ CORPORATE LENDING INC.,
as Syndication Agent
and
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Administrative Agent
Dated as of July __, 2003
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS........................................................................................... 1
1.1 Defined Terms.................................................................................. 1
1.2 Other Definitional Provisions.................................................................. 18
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS....................................................................... 19
2.1 Term Loan Commitments.......................................................................... 19
2.2 Procedure for Term Loan Borrowing.............................................................. 19
2.3 Repayment of Term Loans........................................................................ 20
2.4 Revolving Credit Facility...................................................................... 20
2.5 Repayment of Loans; Evidence of Debt........................................................... 21
2.6 Fees........................................................................................... 22
2.7 Termination or Reduction of Revolving Credit Commitments....................................... 22
2.8 Optional Prepayments........................................................................... 23
2.9 Mandatory Prepayments and Commitment Reductions................................................ 23
2.10 Conversion and Continuation Options............................................................ 24
2.11 Minimum Amounts and Maximum Number of Eurodollar Tranches...................................... 25
2.12 Interest Rates and Payment Dates............................................................... 25
2.13 Computation of Interest and Fees............................................................... 25
2.14 Inability to Determine Interest Rate........................................................... 26
2.15 Pro Rata Treatment and Payments................................................................ 26
2.16 Requirements of Law............................................................................ 28
2.17 Taxes.......................................................................................... 29
2.18 Indemnity...................................................................................... 30
2.19 Illegality..................................................................................... 31
2.20 Change of Lending Office....................................................................... 31
SECTION 3. REPRESENTATIONS AND WARRANTIES........................................................................ 31
3.1 Financial Condition............................................................................ 31
3.2 No Change...................................................................................... 32
3.3 Corporate Existence; Compliance with Law....................................................... 33
3.4 Corporate Power; Authorization; Enforceable Obligations........................................ 33
3.5 No Legal Bar................................................................................... 33
3.6 No Material Litigation......................................................................... 33
3.7 No Default..................................................................................... 34
3.8 Ownership of Property; Liens................................................................... 34
3.9 Intellectual Property.......................................................................... 34
3.10 Taxes.......................................................................................... 34
3.11 Federal Regulations............................................................................ 34
3.12 ERISA.......................................................................................... 34
3.13 Investment Company Act; Other Regulations...................................................... 35
3.14 Subsidiaries................................................................................... 35
3.15 Use of Proceeds................................................................................ 35
3.16 Environmental Matters.......................................................................... 35
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3.17 Accuracy of Information, etc................................................................... 36
3.18 Security Documents............................................................................. 37
3.19 Solvency....................................................................................... 37
3.20 Insurance Regulatory Matters................................................................... 37
SECTION 4. CONDITIONS PRECEDENT.................................................................................. 37
4.1 Conditions to Initial Extension of Credit...................................................... 37
4.2 Conditions to Each Loan........................................................................ 39
SECTION 5. AFFIRMATIVE COVENANTS................................................................................. 40
5.1 Financial Statements........................................................................... 40
5.2 Certificates; Other Information................................................................ 41
5.3 Payment of Obligations......................................................................... 42
5.4 Conduct of Business and Maintenance of Existence, etc.......................................... 42
5.5 Maintenance of Property; Insurance............................................................. 42
5.6 Inspection of Property; Books and Records; Discussions......................................... 43
5.7 Notices........................................................................................ 43
5.8 Environmental Laws............................................................................. 44
5.9 Interest Rate Protection....................................................................... 44
5.10 Additional Collateral, etc..................................................................... 44
5.11 Further Assurances............................................................................. 45
SECTION 6. NEGATIVE COVENANTS.................................................................................... 46
6.1 Financial Condition Covenants.................................................................. 46
6.2 Limitation on Indebtedness..................................................................... 47
6.3 Limitation on Liens............................................................................ 48
6.4 Limitation on Fundamental Changes.............................................................. 49
6.5 Limitation on Disposition of Property.......................................................... 49
6.6 Limitation on Restricted Payments.............................................................. 50
6.7 Limitation on Capital Expenditures............................................................. 50
6.8 Limitation on Investments...................................................................... 51
6.9 Limitation on Modifications of Articles of Incorporation....................................... 52
6.10 Limitation on Transactions with Affiliates..................................................... 52
6.11 Limitation on Sales and Leasebacks............................................................. 52
6.12 Limitation on Changes in Fiscal Periods........................................................ 52
6.13 Limitation on Negative Pledge Clauses.......................................................... 52
6.14 Limitation on Restrictions on Subsidiary Distributions......................................... 52
6.15 Limitation on Lines of Business................................................................ 52
6.16 Limitation on Hedge Agreements................................................................. 53
SECTION 7. EVENTS OF DEFAULT..................................................................................... 53
SECTION 8. THE AGENTS............................................................................................ 55
8.1 Appointment.................................................................................... 55
8.2 Delegation of Duties........................................................................... 56
8.3 Exculpatory Provisions......................................................................... 56
8.4 Reliance by Agents............................................................................. 56
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8.5 Notice of Default.............................................................................. 57
8.6 Non-Reliance on Agents and Other Lenders....................................................... 57
8.7 Indemnification................................................................................ 57
8.8 Agent in Its Individual Capacity............................................................... 58
8.9 Successor Administrative Agent................................................................. 58
8.10 Authorization to Release Liens and Guarantees.................................................. 59
8.11 The Arrangers; the Syndication Agent........................................................... 59
SECTION 9. MISCELLANEOUS......................................................................................... 59
9.1 Amendments and Waivers......................................................................... 59
9.2 Notices........................................................................................ 60
9.3 No Waiver; Cumulative Remedies................................................................. 61
9.4 Survival of Representations and Warranties..................................................... 61
9.5 Payment of Expenses............................................................................ 61
9.6 Successors and Assigns; Participations and Assignments......................................... 63
9.7 Adjustments; Set-off........................................................................... 66
9.8 Counterparts................................................................................... 66
9.9 Severability................................................................................... 67
9.10 Integration.................................................................................... 67
9.11 GOVERNING LAW.................................................................................. 67
9.12 Submission To Jurisdiction; Waivers............................................................ 67
9.13 Acknowledgments................................................................................ 68
9.14 Confidentiality................................................................................ 68
9.15 Release of Collateral and Guarantee Obligations................................................ 68
9.16 Accounting Changes............................................................................. 69
9.17 Delivery of Lender Addenda..................................................................... 69
9.18 WAIVERS OF JURY TRIAL.......................................................................... 70
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SCHEDULES:
3.4 Consents, Authorizations, Filings and Notices
3.14(a) Subsidiaries
3.14(b) Outstanding Subscriptions, Options and Warrants
3.18-1 UCC Filing Jurisdictions
3.18-2 UCC Financing Statements to be Terminated
6.2(d) Existing Indebtedness
6.3(f) Existing Liens
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Assignment and Acceptance
E Form of Legal Opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.L.L.
F-1 Form of Term Note
F-2 Form of Revolving Credit Note
G Form of Exemption Certificate
H Form of Lender Addendum
I Form of Revolving Credit Supplement
J Form of Borrowing Notice
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CREDIT AGREEMENT, dated as of July ___, 2003, among INFINITY
PROPERTY AND CASUALTY CORPORATION, an Ohio corporation (the "Borrower"), the
several banks and other financial institutions or entities from time to time
parties to this Agreement (the "Lenders"), BEAR, ▇▇▇▇▇▇▇ & CO. INC. and ▇▇▇▇▇▇
BROTHERS INC., as joint advisors, joint lead arrangers and joint bookrunners (in
such capacity, the "Arrangers"), BEAR ▇▇▇▇▇▇▇ CORPORATE LENDING INC., as
syndication agent (in such capacity, the "Syndication Agent"), and ▇▇▇▇▇▇
COMMERCIAL PAPER INC., as administrative agent (in such capacity, the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make
available senior secured credit facilities to be used by the Borrower to make
investments in certain of the Borrower's insurance subsidiaries and to repay
certain indebtedness of the Borrower; and
WHEREAS, the Lenders are willing to make such credit
facilities available upon and subject to the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms
listed in this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"AFG Promissory Note": the promissory note dated as of
December 31, 2002 in the principal amount $55,000,000 issued by the Borrower to
American Financial Group, Inc., as such note may have been amended, supplemented
or otherwise modified prior to the date hereof.
"Agents": the collective reference to the Syndication Agent
and the Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any time,
an amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans and (ii) the
amount of such Lender's Revolving Credit Commitment then in effect or, if the
Revolving Credit Commitments have been terminated, the amount of such Lender's
Revolving Credit Loans then outstanding.
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"Aggregate Exposure Percentage": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the sum of the Aggregate Exposures of all Lenders at
such time.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Annual Statement": the annual statutory financial statement
of any Insurance Subsidiary required to be filed with the Department of its
jurisdiction of incorporation or organization, which statement shall be in the
form required by such Insurance Subsidiary's jurisdiction of incorporation or
organization or, if no specific form is so required, in the form of financial
statements permitted by such Department to be used for filing annual statutory
financial statements and shall contain the type of information permitted or
required by such Department to be disclosed therein, together with all exhibits
or schedules filed therewith.
"Applicable Margin": for each Type of Loan under each
Facility, (a) with respect to the Term Loans, (i) 1.50%, in the case of Base
Rate Loans, and (ii) 2.50%, in the case of Eurodollar Loans, and (b) with
respect to the Revolving Credit Loans, if any, the rate per annum set forth in
the Revolving Credit Supplement pursuant to which the Revolving Credit Facility
is made available; provided that, in no event shall the Applicable Margins in
respect of Revolving Credit Loans of either Type be higher than the Applicable
Margin in respect of Term Loans of the same Type.
"Arranger": as defined in the preamble hereto.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by clause
(a), (b), (c) or (d) of Section 6.5) which yields gross proceeds to the Borrower
or any of the Subsidiary Guarantors (valued at the initial principal amount
thereof in the case of non-cash proceeds consisting of notes or other debt
securities and valued at fair market value in the case of other non-cash
proceeds) in excess of $1,000,000.
"Assignee": as defined in Section 9.6(c).
"Assignor": as defined in Section 9.6(c).
"Available Revolving Credit Commitment": with respect to any
Revolving Credit Lender at any time, an amount equal to the excess, if any, of
(a) such Lender's Revolving Credit Commitment then in effect over (b) such
Lender's Revolving Credit Loans then outstanding.
"Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate
in effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the prime
lending rate as set forth on the British Banking Association Telerate Page 5 (or
such other comparable page as may, in the opinion of the Administrative Agent,
replace such page for the purpose of displaying such rate), as in effect from
time to time. Any change in the Base Rate due to a change in the Prime Rate or
the Federal Funds Effective Rate
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shall be effective as of the opening of business on the effective day of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Base Rate Loans": Loans for which the applicable rate of
interest is based upon the Base Rate.
"Benefitted Lender": as defined in Section 9.7.
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"Borrowing Notice": with respect to any request for borrowing
of Loans hereunder, a notice from the Borrower, substantially in the form of,
and containing the information prescribed by, Exhibit J, delivered to the
Administrative Agent.
"Business Day": (a) for all purposes other than as covered by
clause (b) below, a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close and
(b) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (a) and which is also a day for trading by and
between banks in Dollar deposits in the interbank eurodollar market.
"Capital and Surplus": with respect to any Insurance
Subsidiary, as of any date, the total amount shown on line 32, page 3, column 1
of the Annual Statement of such Insurance Subsidiary, or an amount determined in
a consistent manner for any date other than one as of which an Annual Statement
is prepared (or any successor line, page or column that contains the same
information).
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person for the acquisition or
leasing (pursuant to a capital lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) which are required to be capitalized under GAAP on a balance sheet
of such Person.
"Capital Lease Obligations": with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP;
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests
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in a Person (other than a corporation) and any and all warrants, rights or
options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof having combined
capital and surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-2 by S&P or P-2 by ▇▇▇▇▇'▇, or carrying an equivalent
rating by a nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of commercial paper issuers generally, and
maturing within six months from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the requirements
of clause (b) of this definition, having a term of not more than 30 days with
respect to securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by ▇▇▇▇▇'▇; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; and (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"Cash Flow": for any period, the sum, without duplication, of
(a) dividends actually paid to the Borrower by any of its wholly-owned first
tier Insurance Subsidiaries in cash during such period plus (b) additional
amounts which would be permitted to be paid to the Borrower during such period
by any of its wholly-owned first tier Insurance Subsidiaries without prior
approval by any Insurance Regulator in accordance with the terms of any order,
statute, rule or government regulation pertaining to such first tier Insurance
Subsidiary plus or minus (c) the net tax receipts/payments of the Borrower for
such period and minus (d) the holding company expenses paid by the Borrower for
such period.
"Cash Interest Expense": for any period, total cash interest
expense (including that attributable to Capital Lease Obligations) of the
Borrower and its Non-Insurance Subsidiaries for such period with respect to all
outstanding Indebtedness of the Borrower and its Non-Insurance Subsidiaries
(including, without limitation, all commissions, discounts and other fees and
charges owed by the Borrower and its Non-Insurance Subsidiaries with respect to
letters of credit and bankers' acceptance financing and net costs of the
Borrower and its Non-Insurance Subsidiaries under Hedge Agreements in respect of
interest rates to the extent such net costs are allocable to such period in
accordance with GAAP).
"Change of Control": the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities
5
Exchange Act of 1934, as amended (the "Exchange Act")), excluding the Permitted
Investors, shall become, or obtain rights (whether by means or warrants, options
or otherwise) to become, the "beneficial owner" (as defined in Rules 13(d)-3 and
13(d)-5 under the Exchange Act), directly or indirectly, of more than 25% of the
outstanding common stock of the Borrower, (b) the Permitted Investors become the
beneficial owners (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange
Act), directly or indirectly, of more than 50% of the outstanding common stock
of the Borrower or (c) the board of directors of the Borrower shall cease to
consist of a majority of Continuing Directors.
"Closing Date": the date on which the conditions precedent set
forth in Section 4.1 shall have been satisfied, which date shall be not later
than July __, 2003.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"Commitment": with respect to any Lender, each of the Term
Loan Commitment, and the Revolving Credit Commitment, if any, of such Lender.
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer, substantially in the form of Exhibit B.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated June 2003 and furnished to the initial Lenders in
connection with the syndication of the Facilities.
"Consolidated Net Income": of any Person for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP; provided,
that in calculating Consolidated Net Income of the Borrower and its consolidated
Subsidiaries for any period, there shall be excluded (a) the income (or deficit)
of any Person accrued prior to the date it becomes a Subsidiary of the Borrower
or is merged into or consolidated with the Borrower or any of its Subsidiaries
and (b) the income (or deficit) of any Person (other than a Subsidiary of the
Borrower) in which the Borrower or any of its Subsidiaries has an ownership
interest, except to the extent that any such income is actually received by the
Borrower or such Subsidiary in the form of dividends or similar distributions.
"Consolidated Net Worth": at any date, the sum of all amounts
that would, in conformity with GAAP be included on a consolidated balance sheet
of the Borrower and its Subsidiaries under stockholders equity at such date, but
excluding the effects of SFAS No. 115.
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"Continuing Directors": the directors of the Borrower on the
Closing Date and each other director of the Borrower, if, in each case, such
other director's nomination for election to the board of directors of the
Borrower is recommended by at least a majority of the then Continuing Directors
or such other director receives the vote of the Permitted Investors in his or
her election by the shareholders of the Borrower.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Control Investment Affiliate": as to any Person, any other
Person that (a) directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or more
companies. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Default": any of the events specified in Section 7, whether
or not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Department": with respect to any Insurance Subsidiary, the
insurance commissioner or other Governmental Authority of such Insurance
Subsidiary's state of domicile with which such Insurance Subsidiary is required
to file its Annual Statement.
"Derivatives Counterparty": as defined in Section 6.6.
"Disposition": with respect to any Property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof; and the terms "Dispose" and "Disposed of" shall have correlative
meanings.
"Dollars" and "$": lawful currency of the United States of
America.
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States of
America.
"Environmental Laws": any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees, or other legally
enforceable requirements (including, without limitation, common law) of any
international authority, foreign government, the United States, or any state,
local, municipal or other governmental authority, regulating, relating to or
imposing liability or standards of conduct concerning protection of the
environment or of human health, or employee health and safety, as has been, is
now, or may at any time hereafter be, in effect.
"Environmental Permits": any and all permits, licenses,
approvals, registrations, notifications, exemptions and other authorizations
required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
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"Eurocurrency Reserve Requirements": for any day, the
aggregate (without duplication) of the maximum rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves) under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period, the rate per annum determined on the basis of the rate for
deposits in Dollars for a period equal to such Interest Period commencing on the
first day of such Interest Period appearing on Page 3750 of the Telerate screen
as of 11:00 A.M., London time, two Business Days prior to the beginning of such
Interest Period. In the event that such rate does not appear on Page 3750 of the
Telerate screen (or otherwise on such screen), the "Eurodollar Base Rate" for
purposes of this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as may be
selected by the Administrative Agent.
"Eurodollar Loans": Loans for which the applicable rate of
interest is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period, a rate per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which begin on
the same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"Event of Default": any of the events specified in Section 7,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Excluded Foreign Subsidiaries": any Foreign Subsidiary in
respect of which either (a) the pledge of all of the Capital Stock of such
Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary of the
Obligations, would, in the good faith judgment of the Borrower, result in
adverse tax consequences to the Borrower.
"Excluded Insurance Subsidiary": any Insurance Subsidiary
which would not be permitted by applicable Insurance Regulations to become a
guarantor party to the Guarantee and Collateral Agreement.
"Facility": each of (a) the Term Loan Commitments and the Term
Loans made thereunder (the "Term Loan Facility") and (b) the Revolving Credit
Commitments, if any, and the extensions of credit made thereunder (the
"Revolving Credit Facility").
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"Federal Funds Effective Rate": for any day, 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 on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.
"Foreign Subsidiary": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
"Fixed Charge Coverage Ratio": for any period, the ratio of
Cash Flow for such period to Fixed Charges for such period.
"Fixed Charges": for any period, the sum (without duplication)
of (a) Cash Interest Expense for such period, (b) scheduled payments made by the
Borrower and its Non-Insurance Subsidiaries during such period on account of
principal of Indebtedness (including scheduled principal payments in respect of
the Term Loans but excluding any principal payments under the Revolving Credit
Facility, if any, (c) Capital Expenditures of the Borrower and its Non-Insurance
Subsidiaries for such period and (d) any dividend paid by the Borrower pursuant
to the terms of any Capital Stock on such Capital Stock, or any payment made by
the Borrower pursuant to the terms of any Capital Stock on account of the
purchase, redemption, defeasance, retirement or other acquisition of such
Capital Stock of the Borrower, whether now or hereafter outstanding, or any
other distribution made by the Borrower required pursuant to the terms of any
Capital Stock in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Borrower or any Subsidiary.
"Funding Office": the office specified from time to time by
the Administrative Agent as its funding office by notice to the Borrower and the
Lenders.
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time.
"Governmental Authority": 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, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing, including any
board of insurance, insurance department or insurance commissioner.
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by the Borrower and each
Subsidiary Guarantor, substantially in the form of Exhibit A, as the same may be
amended, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit), if to
induce the creation of such obligation of such other Person the guaranteeing
person has issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness, leases,
9
dividends or other obligations (the "primary obligations") of any other third
Person (the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
Property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase Property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"Hedge Agreements": all interest rate or currency swaps, caps
or collar agreements, foreign exchange agreements, commodity contracts or
similar arrangements entered into by the Borrower or its Subsidiaries to alter
the risks of such Person in respect of fluctuations in interest rates, currency
exchange rates, commodity prices or the exchange of nominal interest
obligations, either generally or under specific contingencies.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of Property or
services (other than trade payables incurred in the ordinary course of such
Person's business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to Property 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), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under acceptance, letter of credit or similar
facilities, (g) all obligations of such Person, contingent or otherwise, to
purchase, redeem, retire or otherwise acquire for value any Capital Stock of
such Person, (h) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (g) above; (i) all
obligations of the kind referred to in clauses (a) through (h) above secured by
(or for which the holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien on Property (including, without
limitation, accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such obligation and
(j) for the purposes of Section 7(e) only, all obligations of such Person in
respect of Hedge Agreements.
10
"Indemnified Liabilities": as defined in Section 9.5.
"Indemnitee": as defined in Section 9.5.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Insurance Regulations": any law, regulation, rule, directive
or order applicable to an insurance company.
"Insurance Regulator": any Person charged with the
administration, oversight or enforcement of any Insurance Regulation.
"Insurance Subsidiary": any Subsidiary which is required to be
licensed by any Department as an insurer or reinsurer and each direct or
indirect Subsidiary of such Subsidiary.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, copyrights, copyright licenses, patents, patent
licenses, trademarks, trademark licenses, technology, know-how and processes,
and all rights to ▇▇▇ at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and damages
therefrom.
"Interest Coverage Ratio": for any period, the ratio of Cash
Flow for such period to Cash Interest Expense for such period.
"Interest Payment Date": (a) as to any Base Rate Loan, the
last day of each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any Eurodollar
Loan having an Interest Period of three months or shorter, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day that is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such Interest
Period and (d) as to any Loan (other than any Revolving Credit Loan that is a
Base Rate Loan), the date of any repayment or prepayment made in respect
thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto or as provided in Section
2.10(b); provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
11
(1) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend
beyond the Revolving Credit Termination Date or beyond the
date final payment is due on the Term Loans shall end on the
Revolving Credit Termination Date or such due date, as
applicable; and
(3) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of
the calendar month at the end of such Interest Period.
"Investments": as defined in Section 6.8.
"Lender Addendum": with respect to any initial Lender, a
Lender Addendum, substantially in the form of Exhibit H, to be executed and
delivered by such Lender on the Closing Date as provided in Section 9.17.
"Lenders": as defined in the preamble hereto.
"Leverage Ratio": as at the last day of each fiscal quarter of
the Borrower, the ratio of (a) Total Debt on such day to (b) the sum of (i)
Total Debt on such day plus (ii) Consolidated Net Worth on such day.
"License": any license, certificate of authority, permit or
other authorization which is required to be obtained from any Governmental
Authority in connection with the operation, ownership or transaction of
insurance or reinsurance business.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
capital lease having substantially the same economic effect as any of the
foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Security Documents and
the Notes.
"Loan Parties": the Borrower and each Subsidiary of the
Borrower that is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of the Term
Loans or the Revolving Credit Loans, as the case may be, outstanding under such
Facility (or, in the case of the Revolving
12
Credit Facility, if any, prior to any termination of the Revolving Credit
Commitments, the holders of more than 50% of the Total Revolving Credit
Commitments).
"Majority Revolving Credit Facility Lenders": the Majority
Facility Lenders in respect of the Revolving Credit Facility.
"Material Adverse Effect": a material adverse effect on (a)
the business, assets, property, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Agents or the Lenders hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity, and any other substances or forces of any kind,
whether or not any such substance or force is defined as hazardous or toxic
under any Environmental Law, that is regulated pursuant to or could give rise to
liability under any Environmental Law.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NAIC": the National Association of Insurance Commissioners or
any successor thereto, or in the absence of the National Association of
Insurance Commissioners or such successor, any other association, agency or
other organization performing advisory, coordination or other like functions
among insurance departments, insurance commissioners and similar Governmental
Authorities of the various states of the United States towards the promotion of
uniformity in the practices of such Governmental Authorities.
"Net Cash Proceeds": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such Asset
Sale or Recovery Event, net of attorneys' fees, accountants' fees, investment
banking fees, amounts required to be applied to the repayment of Indebtedness
secured by a Lien expressly permitted hereunder on any asset which is the
subject of such Asset Sale or Recovery Event (other than any Lien pursuant to a
Security Document) and other customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to be payable
as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), (b) in connection with any
issuance or sale of equity securities or debt securities or instruments or the
incurrence of loans, the cash proceeds received from such issuance or
incurrence, net of attorneys' fees, investment banking fees, accountants' fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred in connection therewith and (c) in connection with any
Purchase Price Refund, the cash amount thereof, net of any expenses incurred in
the collection thereof.
"Non-Excluded Taxes": as defined in Section 2.17(a).
13
"Non-Insurance Subsidiary": any Subsidiary other than an
Insurance Subsidiary.
"Non-U.S. Lender": as defined in Section 2.17(d).
"Note": any promissory note evidencing any Loan.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the
Loans and interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to the Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender or any
Qualified Counterparty, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, this Agreement, any other Loan Document, any
Specified Hedge Agreement or any other document made, delivered or given in
connection herewith or therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all fees, charges and disbursements of counsel to the
Administrative Agent or to any Lender that are required to be paid by the
Borrower pursuant hereto) or otherwise; provided, that (i) obligations of the
Borrower or any Subsidiary under any Specified Hedge Agreement shall be secured
and guaranteed pursuant to the Security Documents only to the extent that, and
for so long as, the other Obligations are so secured and guaranteed and (ii) any
release of Collateral or Subsidiary Guarantors effected in the manner permitted
by this Agreement shall not require the consent of holders of obligations under
Specified Hedge Agreements.
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"Participant": as defined in Section 9.6(b).
"Payment Office": the office specified from time to time by
the Administrative Agent as its payment office by notice to the Borrower and the
Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Investors": American Financial Group, Inc. and its
subsidiaries.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan": at a particular time, any employee benefit plan that
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
14
"Pro Forma Balance Sheet": as defined in Section 3.1(a).
"Projections": as defined in Section 5.2(c).
"Property": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Purchase Price Refund": any amount received by the Borrower
or any Subsidiary Guarantor as a result of a purchase price adjustment or
similar event in connection with any acquisition of Property by the Borrower or
any Subsidiary Guarantor.
"Qualified Counterparty": with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified Hedge
Agreement was entered into, was an Agent, a Lender or an affiliate of an Agent
or a Lender.
"Quarterly Statement": the quarterly statutory financial
statement of any Insurance Subsidiary required to be filed with the Department
of its jurisdiction of incorporation, which statement shall be in the form
required by such Insurance Subsidiary's jurisdiction of incorporation or, if no
specific form is so required, in the form of financial statements permitted by
such Department to be used for filing quarterly statutory financial statements
and shall contain the type of information permitted or required by such
Department to be disclosed therein, together with all exhibits or schedules
filed therewith.
"Recovery Event": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding relating
to any asset of, the Borrower or any Subsidiary Guarantor. It is understood and
agreed that "Recovery Event" shall not include any claim paid pursuant to a
policy issued as part of the insurance business of the Borrower and its
Insurance Subsidiaries or in settlement of any such claim.
"Register": as defined in Section 9.6(d).
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by the Borrower or
any Subsidiary Guarantor in connection therewith that are not applied to prepay
the Term Loans or reduce the Revolving Credit Commitments pursuant to Section
2.9(c) as a result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale, Purchase Price Refund or
Recovery Event in respect of which the Borrower has delivered a Reinvestment
Notice.
"Reinvestment Notice": a written notice executed by a
Responsible Officer stating that no Default or Event of Default has occurred and
is continuing and that the Borrower (directly or indirectly through a
Subsidiary) intends and expects to use all or a specified portion of the Net
Cash Proceeds of an Asset Sale or Recovery Event to acquire assets useful in its
business.
15
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended prior to the relevant Reinvestment Prepayment Date to acquire
assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring one year after such
Reinvestment Event and (b) the date on which the Borrower shall have determined
not to, or shall have otherwise ceased to, acquire assets useful in the
Borrower's business with all or any portion of the relevant Reinvestment
Deferred Amount.
"Related Fund": with respect to any Lender, any fund that (x)
invests in commercial loans and (y) is managed or advised by the same investment
advisor as such Lender, by such Lender or an Affiliate of such Lender.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. Section 4043.
"Required Lenders": at any time, the holders of more than 50%
of (a) until the Closing Date, the Commitments and (b) thereafter, the sum of
(i) the aggregate unpaid principal amount of the Term Loans then outstanding and
(ii) the Total Revolving Credit Commitments then in effect, if any, or, if the
Revolving Credit Commitments have been terminated, the aggregate unpaid
principal amount of Revolving Credit Loans then outstanding.
"Required Prepayment Lenders": the Majority Facility Lenders
in respect of each Facility.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule 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.
"Responsible Officer": the chief executive officer, president
or chief financial officer of the Borrower or any Insurance Subsidiary, but in
any event, with respect to financial matters, the chief financial officer of the
Borrower or any such Insurance Subsidiary.
"Restricted Payments": as defined in Section 6.6.
"Revolving Credit Commitment": as to any Lender, the
obligation of such Lender, if any, to make Revolving Credit Loans in an
aggregate principal and/or face amount not to exceed the amount set forth under
the heading "Revolving Credit Commitment" opposite such Lender's name on
Schedule 1 to the New Lender Supplement or the Existing Lender Supplement, as
applicable, delivered by such Lender in connection with the Revolving Credit
Supplement, or, as the case may be, in the Assignment and Acceptance pursuant to
which such
16
Lender became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof.
"Revolving Credit Commitment Period": the period from and
including the effective date of the Revolving Credit Supplement, if any, to the
Revolving Credit Termination Date.
"Revolving Credit Facility": as defined in the definition of
"Facility" in this Section 1.1.
"Revolving Credit Facility Notice": as defined in Section
2.4(a).
"Revolving Credit Lender": each Lender that has a Revolving
Credit Commitment or that is the holder of Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.4(b).
"Revolving Credit Note": as defined in Section 2.5.
"Revolving Credit Offered Amount": as defined in Section
2.4(a).
"Revolving Credit Percentage": as to any Revolving Credit
Lender at any time, the percentage which such Lender's Revolving Credit
Commitment then constitutes of the Total Revolving Credit Commitments (or, at
any time after the Revolving Credit Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such Lender's
Revolving Credit Loans then outstanding constitutes of the aggregate principal
amount of all Revolving Credit Loans then outstanding).
"Revolving Credit Supplement": a Revolving Credit Supplement,
substantially in the form of Exhibit I.
"Revolving Credit Termination Date": the termination date set
forth in the Revolving Credit Supplement with respect to the Revolving Credit
Facility.
"Risk Based Capital Ratio": with respect to any Insurance
Subsidiary on any date of determination thereof, the ratio (expressed as a
percentage) of (a) the Total Adjusted Capital (as defined by the NAIC) of such
Insurance Subsidiary to (b) the Authorized Control Level Risk Based Capital (as
defined by the NAIC and set forth in line 25 to line 26 on page 21 of such
Insurance Subsidiary's Annual Statement) of such Insurance Subsidiary.
"S&P": Standard & Poor's Ratings Services.
"SAP": with respect to any Insurance Subsidiary, the statutory
accounting practices prescribed or permitted by the Department in the
jurisdiction of such Insurance Subsidiary for the preparation of annual
statements and other financial reports by insurance companies of the same type
as such Insurance Subsidiary, which are applicable to the circumstances as of
the date of determination.
17
"SEC": the Securities and Exchange Commission (or successors
thereto or an analogous Governmental Authority).
"Secured Parties": as defined in the Guarantee and Collateral
Agreement.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement and all other security documents hereafter
delivered to the Administrative Agent granting a Lien on any Property of any
Person to secure the obligations and liabilities of any Loan Party under any
Loan Document.
"Single Employer Plan": any Plan that is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent": with respect to any Person, as of any date of
determination, (a) the amount of the "present fair saleable value" of the assets
of such Person will, as of such date, exceed the amount of all "liabilities of
such Person, contingent or otherwise," as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable value
of the assets of such Person will, as of such date, be greater than the amount
that will be required to pay the liability of such Person on its debts as such
debts become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they mature. For
purposes of this definition, (i) "debt" means liability on a "claim," and (ii)
"claim" means any (x) right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.
"Specified Hedge Agreement": any Hedge Agreement entered into
by the Borrower or any Subsidiary Guarantor and any Qualified Counterparty.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other
than (i) any Excluded Foreign Subsidiary and (ii) any Excluded Insurance
Subsidiary.
"Term Loan": as defined in Section 2.1.
18
"Term Loan Commitment": as to any Lender, the obligation of
such Lender, if any, to make a Term Loan to the Borrower hereunder in a
principal amount not to exceed the amount set forth under the heading "Term Loan
Commitment" opposite such Lender's name on Schedule 1 to the Lender Addendum
delivered by such Lender, or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender became a party hereto, as the same may
be changed from time to time pursuant to the terms hereof. The original
aggregate amount of the Term Loan Commitments is $200,000,000.
"Term Loan Facility": as defined in the definition of
"Facility" in this Section 1.1.
"Term Loan Lender": each Lender that has a Term Loan
Commitment or is the holder of a Term Loan.
"Term Loan Percentage": as to any Term Loan Lender at any
time, the percentage which such Lender's Term Loan Commitment then constitutes
of the aggregate Term Loan Commitments (or, at any time after the Closing Date,
the percentage which the aggregate principal amount of such Lender's Term Loan
then outstanding constitutes of the aggregate principal amount of the Term Loans
then outstanding).
"Term Note": as defined in Section 2.5.
"Total Debt": at any date, the aggregate principal amount of
all Indebtedness of the Borrower and its Non-Insurance Subsidiaries at such
date, determined on a stand alone basis in accordance with GAAP.
"Total Revolving Credit Commitments": at any time, the
aggregate amount of the Revolving Credit Commitments then in effect.
"Transferee": as defined in Section 9.14.
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and
any certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in
19
Section 1.1, to the extent not defined, shall have the respective meanings given
to them under GAAP and SAP, as the case may be.
(c) References herein to particular pages, columns, lines
or sections of any Person's Annual Statement shall be deemed, where appropriate,
to be references to the corresponding page, column, line or section of such
Person's Quarterly Statement, or if no such corresponding page, column, line or
section exists or if any report form changes, then to the corresponding item
referenced thereby. In the event the pages, columns, lines or sections of the
Annual Statement referenced herein are changed or renumbered from the pages,
columns, lines and sections applicable to the Annual Statement of the Borrower
for 2002, all such references shall be deemed references to such page, column,
line or section as so renumbered or changed.
(d) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Section, Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(e) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(f) All calculations of financial ratios set forth in
Section 6.1 shall be calculated to the same number of decimal places as the
relevant ratios are expressed in and shall be rounded upward if the number in
the decimal place immediately following the last calculated decimal place is
five or greater. For example, if the relevant ratio is to be calculated to the
hundredth decimal place and the calculation of the ratio is 5.126, the ratio
will be rounded up to 5.13.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments. Subject to the terms and
conditions hereof, the Term Loan Lenders severally agree to make term loans
(each, a "Term Loan") to the Borrower on the Closing Date in an amount for each
Term Loan Lender not to exceed the amount of the Term Loan Commitment of such
Lender. The Term Loans may from time to time be Eurodollar Loans or Base Rate
Loans, as determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.10.
2.2 Procedure for Term Loan Borrowing. The Borrower shall
deliver to the Administrative Agent a Borrowing Notice (which Borrowing Notice
must be received by the Administrative Agent prior to 10:00 A.M., New York City
time, one Business Day prior to the anticipated Closing Date) requesting that
the Term Loan Lenders make the Term Loans on the Closing Date. The Term Loans
made on the Closing Date shall initially be Base Rate Loans, and no Term Loan
may be converted into a Eurodollar Loan having an Interest Period in excess of
one month prior to the date which is 30 days after the Closing Date. Upon
receipt of such Borrowing Notice the Administrative Agent shall promptly notify
each Term Loan Lender thereof. Not later than 12:00 Noon, New York City time, on
the Closing Date each Term Loan Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the Term Loan or Term Loans to be made by such Lender.
20
The Administrative Agent shall make available to the Borrower the aggregate of
the amounts made available to the Administrative Agent by the Term Loan Lenders,
in like funds as received by the Administrative Agent.
2.3 Repayment of Term Loans. The Term Loan of each Term
Loan Lender shall mature in 28 consecutive quarterly installments, commencing on
September 30, 2003, each of which shall be in an amount equal to such Lender's
Term Loan Percentage multiplied by the amount set forth below opposite such
installment payment date:
Installment Amount
----------- ------
September 30, 2003 $ 2,250,000
December 31, 2003 $ 2,250,000
March 31, 2004 $ 2,250,000
June 30, 2004 $ 2,250,000
September 30, 2004 $ 2,250,000
December 31, 2004 $ 2,250,000
March 31, 2005 $ 2,250,000
June 30, 2005 $ 2,250,000
September 30, 2005 $ 3,375,000
December 31, 2005 $ 3,375,000
March 31, 2006 $ 3,375,000
June 30, 2006 $ 3,375,000
September 30, 2006 $ 4,500,000
December 31, 2006 $ 4,500,000
March 31, 2007 $ 4,500,000
June 30, 2007 $ 4,500,000
September 30, 2007 $ 7,875,000
December 31, 2007 $ 7,875,000
March 31, 2008 $ 7,875,000
June 30, 2008 $ 7,875,000
September 30, 2008 $11,250,000
December 31, 2008 $11,250,000
March 31, 2009 $11,250,000
June 30, 2009 $11,250,000
September 30, 2009 $18,500,000
December 31, 2009 $18,500,000
March 31, 2010 $18,500,000
June 30, 2010 $18,500,000
2.4 Revolving Credit Facility. (a) If at any time prior
to June 30, 2008, the Borrower desires to add the Revolving Credit Facility, it
shall notify the Administrative Agent in writing (such notice, the "Revolving
Credit Facility Notice") of the amount (the "Revolving Credit Offered Amount")
of the proposed Total Revolving Credit Commitments. The Revolving Credit Offered
Amount (x) shall be not less than $10,000,000 and not greater than $20,000,000
and (y) shall not mature or have any mandatory commitment reductions prior to
June 30, 2010 other than as set forth in Section 2.9 as in effect on the Closing
Date. The Borrower may, at its
21
election (i) offer one or more of the Lenders the opportunity to provide all or
a portion of the Revolving Credit Commitments and/or (ii) offer one or more
additional banks, financial institutions or other entities the opportunity to
provide all or a portion of the Revolving Credit Commitment. The Revolving
Credit Facility Notice shall specify which Lenders and/or banks, financial
institutions or other entities the Borrower desires to provide the Revolving
Credit Offered Amount. The Borrower will notify such Lenders and/or other banks,
financial institutions or other entities of such offer.
(b) The applicable terms and conditions of the Revolving
Credit Facility shall be as set forth herein and include the additional terms
and conditions provided for in a Revolving Credit Supplement executed by the
Borrower, the Arrangers, the Administrative Agent and each entity that pursuant
thereto is becoming a Revolving Credit Lender. From and after the effectiveness
of the Revolving Credit Supplement, each Revolving Credit Lender shall make
revolving credit loans ("Revolving Credit Loans") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding for each Revolving Credit Lender not
exceeding the amount of such Lender's Revolving Credit Commitment. The Revolving
Credit Supplement shall set forth conditions precedent to the availability of
the Revolving Credit Facility, which conditions shall in any event include (A)
the absence of any Default or Event of Default, (B) receipt by the
Administrative Agent of a legal opinion of counsel to the Borrower, in form and
substance satisfactory to the Administrative Agent, covering such matters as are
customary for transactions of this type and such other matters as may be
reasonably requested by the Administrative Agent and (C) receipt by the
Administrative Agent of certified copies of resolutions of each Loan Party, in
form and substance satisfactory to the Administrative Agent, authorizing the
Revolving Credit Facility.
(c) Any Lender or other entity which accepts an offer to
it by the Borrower to provide a Revolving Credit Commitment pursuant to Section
2.4(a) shall, in each case, evidence such acceptance by becoming a party to the
Revolving Credit Supplement, whereupon such Lender or other entity shall be
bound by and entitled to the benefits of this Agreement with respect to the full
amount of its Revolving Credit Commitment.
(d) Notwithstanding anything to the contrary in this
Section 2.4, (i) in no event shall any transaction effected pursuant to this
Section 2.4 cause the sum of Total Revolving Credit Commitments and Term Loan
Commitments to exceed $220,000,000, (ii) no Lender shall have any obligation to
provide a Revolving Credit Commitment unless it agrees to do so in its sole
discretion and (iii) the Revolving Credit Supplement shall not require the
consent of any Agent or Lender other than the entities which are providing a
Revolving Credit Commitment.
2.5 Repayment of Loans; Evidence of Debt. (a) The
Borrower hereby unconditionally promises to pay to the Administrative Agent for
the account of the appropriate Revolving Credit Lender or Term Loan Lender, as
the case may be, (i) the then unpaid principal amount of each Revolving Credit
Loan of such Revolving Credit Lender on the Revolving Credit Termination Date
(or on such earlier date on which the Loans become due and payable pursuant to
Section 7) and (ii) the principal amount of each Term Loan of such Term Loan
Lender in installments according to the amortization schedule set forth in
Section 2.3 (or on such earlier date on which the Loans become due and payable
pursuant to Section 7). The Borrower hereby further agrees to pay interest on
the unpaid principal amount of the Loans from time to time
22
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in Section 2.12.
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the Borrower to
such Lender resulting from each Loan of such Lender from time to time, including
the amounts of principal and interest payable and paid to such Lender from time
to time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower,
shall maintain the Register pursuant to Section 9.6(d), and a subaccount therein
for each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the Type of such Loan and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of
each Lender maintained pursuant to Section 2.5(b) shall, to the extent permitted
by applicable law, be conclusive evidence of the existence and amounts of the
obligations of the Borrower therein recorded absent manifest error; provided,
however, that the failure of any Lender or the Administrative Agent to maintain
the Register or any such account, or any error therein, shall not in any manner
affect the obligation of the Borrower to repay (with applicable interest) the
Loans made to the Borrower by such Lender in accordance with the terms of this
Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will promptly execute and
deliver to such Lender a promissory note of the Borrower evidencing any Term
Loans or Revolving Credit Loans, as the case may be, of such Lender,
substantially in the forms of Exhibit F-1 or F-2, respectively (a "Term Note" or
"Revolving Credit Note," respectively), with appropriate insertions as to date
and principal amount; provided, that delivery of Notes shall not be a condition
precedent to the occurrence of the Closing Date or the making of the Loans on
the Closing Date.
2.6 Fees. (a) The Borrower agrees to pay to the
Syndication Agent the fees in the amounts and on the dates previously agreed to
in writing by the Borrower and the Syndication Agent.
(b) The Borrower agrees to pay to the Administrative
Agent the fees in the amounts and on the dates from time to time agreed to in
writing by the Borrower and the Administrative Agent.
(c) The Borrower agrees to pay to the Administrative
Agent, for the account of each Revolving Credit Lender, commitment fees in such
amounts and payable on such dates as shall be set forth in the Revolving Credit
Supplement.
2.7 Termination or Reduction of Revolving Credit
Commitments. The Borrower shall have the right, upon not less than three
Business Days' notice to the Administrative Agent, to terminate the Revolving
Credit Commitments or, from time to time, to reduce the aggregate amount of the
Revolving Credit Commitments; provided that no such
23
termination or reduction of Revolving Credit Commitments shall be permitted if,
after giving effect thereto and to any prepayments of the Revolving Credit Loans
made on the effective date thereof, the aggregate outstanding principal amount
of Revolving Credit Loans would exceed the Total Revolving Credit Commitments.
Any such reduction shall be in an amount equal to $1,000,000, or a whole
multiple thereof, and shall reduce permanently the Revolving Credit Commitments
then in effect.
2.8 Optional Prepayments. The Borrower may at any time
and from time to time prepay the Loans, in whole or in part, without premium or
penalty (except as otherwise provided herein), upon irrevocable notice delivered
to the Administrative Agent at least three Business Days prior thereto in the
case of Eurodollar Loans and at least one Business Day prior thereto in the case
of Base Rate Loans, which notice shall specify the date and amount of such
prepayment, whether such prepayment is of Term Loans or Revolving Credit Loans,
and whether such prepayment is of Eurodollar Loans or Base Rate Loans; provided,
that if a Eurodollar Loan is prepaid on any day other than the last day of the
Interest Period applicable thereto, the Borrower shall also pay any amounts
owing pursuant to Section 2.18. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (except in the case of
Revolving Credit Loans that are Base Rate Loans) accrued interest to such date
on the amount prepaid. Partial prepayments of Term Loans and Revolving Credit
Loans shall be in an aggregate principal amount of $1,000,000 or a whole
multiple thereof.
2.9 Mandatory Prepayments and Commitment Reductions. (a)
Unless the Required Prepayment Lenders shall otherwise agree, if any Capital
Stock shall be issued by the Borrower (other than Capital Stock issued in
connection with any employee benefit plan), then on the date of such issuance,
the Term Loans shall be prepaid, and/or the Revolving Credit Commitments shall
be reduced, by an amount equal to the amount of 50% of the Net Cash Proceeds of
such issuance, as set forth in Section 2.9(d). The provisions of this Section do
not constitute a consent to the issuance of any equity securities by any entity
whose equity securities are pledged pursuant to the Guarantee and Collateral
Agreement by the Borrower or any of its Subsidiary Guarantors.
(b) Unless the Required Prepayment Lenders shall
otherwise agree, if any Indebtedness shall be incurred by the Borrower or any of
its Subsidiary Guarantors (excluding any Indebtedness incurred in accordance
with Sections 6.2(a), (b), (c), (d), (e) and (f) as in effect on the date of
this Agreement), then on the date of such incurrence, the Term Loans shall be
prepaid and/or the Revolving Credit Commitments shall be reduced, by an amount
equal to the Net Cash Proceeds of such incurrence, as set forth in Section
2.9(d). The provisions of this Section do not constitute a consent to the
incurrence of Indebtedness by the Borrower or any of its Subsidiaries.
(c) Unless the Required Prepayment Lenders shall
otherwise agree, if on any date the Borrower or any Subsidiary Guarantor shall
receive Net Cash Proceeds from any Asset Sale, Purchase Price Refund or Recovery
Event then, unless a Reinvestment Notice shall be delivered in respect thereof,
on the date of receipt by the Borrower or such Subsidiary Guarantor of such Net
Cash Proceeds, the Term Loans shall be prepaid, and/or the Revolving Credit
24
Commitments shall be reduced, by an amount equal to the amount of such Net Cash
Proceeds, as set forth in Section 2.9(d); provided, that, notwithstanding the
foregoing, (i) the aggregate Net Cash Proceeds of Asset Sales and Recovery
Events that may be excluded from the foregoing requirement pursuant to a
Reinvestment Notice shall not exceed $1,000,000 in any fiscal year of the
Borrower and (ii) on each Reinvestment Prepayment Date the Term Loans shall be
prepaid, and/or the Revolving Credit Commitments shall be reduced, by an amount
equal to the Reinvestment Prepayment Amount with respect to the relevant
Reinvestment Event, as set forth in Section 2.9(d). The provisions of this
Section do not constitute a consent to the consummation of any Disposition not
permitted by Section 6.5.
(d) Amounts to be applied in connection with prepayments
and Commitment reductions made pursuant to this Section shall be applied, first,
to the prepayment of the Term Loans and, second, to reduce permanently the
Revolving Credit Commitments, if any; provided, that the Revolving Credit
Supplement may set forth an amount below which the Total Revolving Credit
Commitment shall not be required to be reduced pursuant to this Section 2.9. Any
such reduction of the Revolving Credit Commitments shall be accompanied by
prepayment of the Revolving Credit Loans to the extent, if any, that the
aggregate outstanding principal amount of Revolving Credit Loans exceeds the
amount of the Total Revolving Credit Commitments as so reduced.
2.10 Conversion and Continuation Options. (a) The Borrower
may elect from time to time to convert Eurodollar Loans to Base Rate Loans by
giving the Administrative Agent at least two Business Days' prior irrevocable
notice of such election, provided that any such conversion of Eurodollar Loans
may be made only on the last day of an Interest Period with respect thereto. The
Borrower may elect from time to time to convert Base Rate Loans to Eurodollar
Loans by giving the Administrative Agent at least three Business Days' prior
irrevocable notice of such election (which notice shall specify the length of
the initial Interest Period therefor), provided that no Base Rate Loan under a
particular Facility may be converted into a Eurodollar Loan (i) when any Event
of Default has occurred and is continuing and the Administrative Agent has, or
the Majority Facility Lenders in respect of such Facility have, determined in
its or their sole discretion not to permit such conversions or (ii) after the
date that is one month prior to the final scheduled termination or maturity date
of such Facility. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
(b) The Borrower may elect to continue any Eurodollar
Loan as such upon the expiration of the then current Interest Period with
respect thereto by giving irrevocable notice to the Administrative Agent, in
accordance with the applicable provisions of the term "Interest Period" set
forth in Section 1.1, of the length of the next Interest Period to be applicable
to such Loans, provided that no Eurodollar Loan under a particular Facility may
be continued as such (i) when any Event of Default has occurred and is
continuing and the Administrative Agent has, or the Majority Facility Lenders in
respect of such Facility have, determined in its or their sole discretion not to
permit such continuations or (ii) after the date that is one month prior to the
final scheduled termination or maturity date of such Facility, and provided,
further, that (i) if the Borrower shall fail to give any required notice as
described above in this paragraph, such Loans shall be automatically continued
as Eurodollar Loans with an Interest Period ending one month after the
expiration of the then current Interest Period or (ii) if such continuation is
not permitted
25
pursuant to the preceding proviso, such Loans shall be converted automatically
to Base Rate Loans on the last day of such then expiring Interest Period. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof.
2.11 Minimum Amounts and Maximum Number of Eurodollar
Tranches. Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions, continuations and optional prepayments of Eurodollar
Loans and all selections of Interest Periods shall be in such amounts and be
made pursuant to such elections so that, (a) after giving effect thereto, the
aggregate principal amount of the Eurodollar Loans comprising each Eurodollar
Tranche shall be equal to $5,000,000 or a whole multiple of $1,000,000 in excess
thereof and (b) no more than ten Eurodollar Tranches shall be outstanding at any
one time.
2.12 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin in effect for such day.
(b) Each Base Rate Loan shall bear interest for each day
on which it is outstanding at a rate per annum equal to the Base Rate in effect
for such day plus the Applicable Margin in effect for such day.
(c) (i) If all or a portion of the principal amount of
any Loan shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), all outstanding Loans (whether or not overdue) (to
the extent legally permitted) shall bear interest at a rate per annum that is
equal to the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this Section plus 2%, and (ii) if all or a portion of
any interest payable on any Loan or any commitment fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to Base Rate Loans under the
relevant Facility plus 2% (or, in the case of any such other amounts that do not
relate to a particular Facility, the rate then applicable to Base Rate Loans
under the Term Loan Facility until the effective date of the Revolving Credit
Supplement, and thereafter, the Revolving Credit Facility plus 2%), in each
case, with respect to clauses (i) and (ii) above, from the date of such
non-payment until such amount is paid in full (after as well as before
judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
Section shall be payable from time to time on demand.
2.13 Computation of Interest and Fees. (a) Interest, fees,
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to Base Rate
Loans on which interest is calculated on the basis of the Prime Rate, the
interest thereon shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrower and the relevant Lenders of
each determination of a Eurodollar Rate. Any change in the interest rate on a
Loan resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
26
practicable notify the Borrower and the relevant Lenders of the effective date
and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to Section
2.12(a).
2.14 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice
from the Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Loans during
such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as Base Rate
Loans, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as Base Rate Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted, on the last day of the then current
Interest Period with respect thereto, to Base Rate Loans. Until such notice has
been withdrawn by the Administrative Agent, no further Eurodollar Loans under
the relevant Facility shall be made or continued as such, nor shall the Borrower
have the right to convert Loans under the relevant Facility to Eurodollar Loans.
2.15 Pro Rata Treatment and Payments. (a) Each borrowing
by the Borrower from the Lenders hereunder, each payment by the Borrower on
account of any commitment fee, and any reduction of the Commitments of the
Lenders, shall be made pro rata according to the respective Term Loan
Percentages or Revolving Credit Percentages, as the case may be, of the relevant
Lenders.
(b) Each payment (including each prepayment) on account
of principal or interest on the Term Loans outstanding under the Term Loan
Facility shall be allocated among the Term Loan Lenders pro rata based on the
principal amount of Term Loans held by the Term Loan Lenders. Each prepayment of
principal in respect of the Term Loans shall be applied to the installments of
the Term Loans pro rata based on the remaining outstanding principal amount of
such installments. Amounts prepaid on account of the Term Loans may not be
reborrowed.
27
(c) Each payment (including each prepayment) by the
Borrower on account of principal of and interest on the Revolving Credit Loans
shall be made pro rata according to the respective outstanding principal amounts
of the Revolving Credit Loans then held by the Revolving Credit Lenders.
(d) The application of any payment of Loans under any
Facility (including optional and mandatory prepayments) shall be made, first, to
Base Rate Loans under such Facility and, second, to Eurodollar Loans under such
Facility. Each payment of the Loans (except in the case of Revolving Credit
Loans that are Base Rate Loans) shall be accompanied by accrued interest to the
date of such payment on the amount paid.
(e) All payments (including prepayments) to be made by
the Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the relevant Lenders, at the Payment Office, in
Dollars and in immediately available funds. Any payment made by the Borrower
after 12:00 Noon, New York City time, on any Business Day shall be deemed to
have been on the next following Business Day. The Administrative Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on the Eurodollar Loans)
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day. If any payment on a Eurodollar
Loan becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the result
of such extension would be to extend such payment into another calendar month,
in which event such payment shall be made on the immediately preceding Business
Day. In the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.
(f) Unless the Administrative Agent shall have been
notified in writing by any Lender prior to a borrowing that such Lender will not
make the amount that would constitute its share of such borrowing available to
the Administrative Agent, the Administrative Agent may assume that such Lender
is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the Administrative Agent. A certificate of the Administrative Agent submitted to
any Lender with respect to any amounts owing under this paragraph shall be
conclusive in the absence of manifest error. If such Lender's share of such
borrowing is not made available to the Administrative Agent by such Lender
within three Business Days after such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum applicable to Base Rate Loans under the relevant Facility, on demand,
from the Borrower.
(g) Unless the Administrative Agent shall have been
notified in writing by the Borrower prior to the date of any payment due to be
made by the Borrower hereunder that the
28
Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days after such due date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
2.16 Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
or compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement or any
Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect
thereof (except for Non-Excluded Taxes covered by
Section 2.17 and changes in the rate of tax on the
overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender
that is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable. If
any Lender becomes entitled to claim any additional amounts pursuant to this
Section, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption
of or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under to a level below that which
such Lender or such corporation could have
29
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such corporation
for such reduction.
(c) A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender to the Borrower (with a copy to
the Administrative Agent) shall be conclusive in the absence of manifest error.
The obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.17 Taxes. (a) All payments made by the Borrower under
this Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on any Agent or any Lender as a result of a
present or former connection between such Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from such Agent's or such Lender's having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement or any other Loan Document). If any such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") or any Other Taxes are required to be withheld from any
amounts payable to any Agent or any Lender hereunder, the amounts so payable to
such Agent or such Lender shall be increased to the extent necessary to yield to
such Agent or such Lender (after payment of all Non-Excluded Taxes and Other
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement; provided, however, that the Borrower
shall not be required to increase any such amounts payable to any Lender with
respect to any Non-Excluded Taxes (i) that are attributable to such Lender's
failure to comply with the requirements of paragraph (d) or (e) of this Section
or (ii) that are United States withholding taxes imposed on amounts payable to
such Lender at the time such Lender becomes a party to this Agreement, except to
the extent that such Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower with respect to such
Non-Excluded Taxes pursuant to this paragraph (a).
(b) In addition, the Borrower shall pay any Other Taxes
to the relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are
payable by the Borrower, as promptly as possible thereafter the Borrower shall
send to the Administrative Agent for the account of the relevant Agent or
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the Agents and
the Lenders for any
30
incremental taxes, interest or penalties that may become payable by any Agent or
any Lender as a result of any such failure. The agreements in this Section shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
(d) Each Lender (or Transferee) that is not a citizen or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under the laws of the United States of America
(or any jurisdiction thereof), or any estate or trust that is subject to federal
income taxation regardless of the source of its income (a "Non-U.S. Lender")
shall deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or
Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest" a statement substantially in the form of
Exhibit H and a Form W-8BEN, or any subsequent versions thereof or successors
thereto properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
(e) A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate, provided that such
Lender is legally entitled to complete, execute and deliver such documentation
and in such Lender's reasonable judgment such completion, execution or
submission would not materially prejudice the legal position of such Lender.
2.18 Indemnity. The Borrower agrees to indemnify each
Lender for, and to hold each Lender harmless from, any loss or expense that such
Lender may sustain or incur as a consequence of (a) default by the Borrower in
making a borrowing of, conversion into or continuation of Eurodollar Loans after
the Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment or conversion of
Eurodollar Loans on a day that is not the last day of an Interest Period with
respect thereto. Such indemnification may include an amount equal to the excess,
if any, of (i) the amount of interest that would have
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accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of such Interest Period (or, in the case of
a failure to borrow, convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the applicable rate of
interest for such Loans provided for herein (excluding, however, the Applicable
Margin included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank Eurodollar market. A certificate as to any amounts payable
pursuant to this Section submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.19 Illegality. Notwithstanding any other provision
herein, if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall
forthwith be canceled and (b) such Lender's Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to Base Rate Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law. If any such conversion
of a Eurodollar Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrower shall pay to such
Lender such amounts, if any, as may be required pursuant to Section 2.18.
2.20 Change of Lending Office. Each Lender agrees that,
upon the occurrence of any event giving rise to the operation of Section 2.16,
2.17(a) or 2.19 with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such
event with the object of avoiding the consequences of such event; provided, that
such designation is made on terms that, in the sole judgment of such Lender,
cause such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and provided, further, that nothing in this Section
shall affect or postpone any of the obligations of any Borrower or the rights of
any Lender pursuant to Section 2.16, 2.17(a) or 2.19.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this
Agreement and to make the Loans, the Borrower hereby represents and warrants to
each Agent and each Lender that:
3.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of (x) the Borrower and its consolidated Subsidiaries
and (y) the Borrower (which pro forma balance sheet accounts for the Borrower's
Subsidiaries using the equity method of accounting), in each case, as at March
31, 2003 (including the notes thereto) (collectively, the "Pro Forma Balance
Sheets"), copies of which have heretofore been furnished to each Lender, have
been prepared giving effect (as if such events had occurred on such date) to (i)
the Loans to be made on the Closing Date and the use of proceeds thereof and
(ii) the payment of fees and
32
expenses in connection with the foregoing. Each Pro Forma Balance Sheet has been
prepared based on the best information available to the Borrower as of the date
of delivery thereof, and presents fairly on a pro forma basis the estimated
financial position of (x) Borrower and its consolidated Subsidiaries or (y) the
Borrower, as the case may be, in each case as at March 31, 2003 and assuming
that the events specified in the preceding sentence had actually occurred at
such date.
(b) The (x) (i) audited consolidated balance sheets of
the Borrower and its consolidated Subsidiaries as at December 31, 2001 and
December 31, 2002 and (ii) the statement of assets (excluding investments) and
liabilities to be transferred of the Personal Lines Business of Great American
Insurance Company (the "Assumed Agency Business") as of December 31, 2001 and
December 31, 2002, reported on by and accompanied by unqualified reports from
Ernst & Young LLP, present fairly the financial condition of the Borrower and
its consolidated Subsidiaries and the Assumed Agency Business, as the case may
be, as at such dates, and the respective results of operations and cash flows
for the respective fiscal years then ended, and (y) unaudited Annual Statement
of each of the Insurance Subsidiaries as at December 31, 2001 and December 31,
2002, presents fairly the financial condition of such Insurance Subsidiary as at
such dates, and for each of the fiscal years then ended, and the respective
results of operations and cash flows for the respective fiscal years then ended.
The (i) unaudited interim consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at March 31, 2003, and the related unaudited
statements of income and cash flows for the three-month period ended on such
date present fairly the financial condition of the Borrower and its consolidated
Subsidiaries, as at such date, and the results of operations and cash flows for
the three-month period then ended (subject to normal year-end audit
adjustments), and (ii) the unaudited Quarterly Statement of each of the
Insurance Subsidiaries as at, and for the fiscal quarter ended, March 31, 2003,
presents fairly the financial condition of such Insurance Subsidiary, as at such
date, and the respective results of operations and cash flows for the
three-month period then ended (subject to normal year end audit adjustments).
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except (i) as approved by the aforementioned
firm of accountants and disclosed therein and (ii) with respect to the financial
statements of the Borrower's Insurance Subsidiaries, which were prepared in
accordance with SAP). The Borrower and its Subsidiaries do not have any material
Guarantee Obligations, contingent liabilities and liabilities for taxes, or any
long-term leases or unusual forward or long-term commitments, including, without
limitation, any interest rate or foreign currency swap or exchange transaction
or other obligation in respect of derivatives, that are not reflected in the
most recent financial statements referred to in this paragraph. During the
period from December 31, 2002 to and including the date hereof, and except as
completed in connection with the Borrower's initial public offering of common
stock and described in the Borrower's prospectus dated February 12, 2003
relating to such initial public offering, there has been no Disposition by the
Borrower or any of its Subsidiaries of any material part of its business or
Property.
3.2 No Change. Since December 31, 2002 there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.
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3.3 Corporate Existence; Compliance with Law. Each of the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of Property or the conduct of its business
requires such qualification except to the extent that the failure to be so
qualified or in good standing would not, in the aggregate, reasonably be
expected to cause a Material Adverse Effect and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
3.4 Corporate Power; Authorization; Enforceable
Obligations. Each Loan Party has the corporate power and authority, and the
legal right, to make, deliver and perform the Loan Documents to which it is a
party and, in the case of the Borrower, to borrow hereunder. Each Loan Party has
taken all necessary corporate or other action to authorize the execution,
delivery and performance of the Loan Documents to which it is a party and, in
the case of the Borrower, to authorize the borrowings on the terms and
conditions of this Agreement. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with the borrowings hereunder or the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the other Loan Documents, except (i) consents, authorizations, filings
and notices described in Schedule 3.4, which consents, authorizations, filings
and notices have been obtained or made and are in full force and effect and (ii)
the filings referred to in Section 3.18. Each Loan Document has been duly
executed and delivered on behalf of each Loan Party that is a party thereto.
This Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan Party that is a
party thereto, enforceable against each such Loan Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
3.5 No Legal Bar. The execution, delivery and performance
of this Agreement and the other Loan Documents, the borrowings hereunder and the
use of the proceeds thereof will not violate any Requirement of Law or any
Contractual Obligation of the Borrower or any of its Subsidiaries and will not
result in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Security Documents).
3.6 No Material Litigation. No litigation, investigation
or proceeding of or before any arbitrator or Governmental Authority is pending
or, to the knowledge of the Borrower, threatened by or against the Borrower or
any of its Subsidiaries or against any of their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) that could reasonably be
expected to have a Material Adverse Effect.
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3.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
3.8 Ownership of Property; Liens. Each of the Borrower
and its Subsidiaries has title in fee simple to, or a valid leasehold interest
in, all its real property, and good title to, or a valid leasehold interest in,
all its other Property, and none of such Property is subject to any Lien except
as permitted by Section 6.3.
3.9 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted except where the failure
to own or license such Intellectual Property would not be reasonably expected to
cause a Material Adverse Effect. No material claim has been asserted and is
pending by any Person challenging or questioning the use of any Intellectual
Property or the validity or effectiveness of any Intellectual Property, nor does
the Borrower know of any valid basis for any such claim. The use of Intellectual
Property by the Borrower and its Subsidiaries does not infringe on the rights of
any Person in any material respect.
3.10 Taxes. Each of the Borrower and each of its
Subsidiaries has filed or caused to be filed all Federal, state and other
material tax returns that are required to be filed after giving effect to any
valid extensions of time in which to make such filings and has paid all taxes
shown to be due and payable on said returns or on any assessments made against
it or any of its Property and all other taxes, fees or other charges imposed on
it or any of its Property by any Governmental Authority (other than any the
amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP or SAP, as applicable, have been provided on the books of the Borrower or
its Subsidiaries, as the case may be); and no tax Lien has been filed, and, to
the knowledge of the Borrower, no claim is being asserted, with respect to any
such tax, fee or other charge.
3.11 Federal Regulations. No part of the proceeds of any
Loans will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.
3.12 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan
35
allocable to such accrued benefits by a material amount. Neither the Borrower
nor any Commonly Controlled Entity has had a complete or partial withdrawal from
any Multiemployer Plan that has resulted or could reasonably be expected to
result in a material liability under ERISA, and neither the Borrower nor any
Commonly Controlled Entity would become subject to any material liability under
ERISA if the Borrower or any such Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the valuation date most closely
preceding the date on which this representation is made or deemed made. No such
Multiemployer Plan is in Reorganization or Insolvent.
3.13 Investment Company Act; Other Regulations. No Loan
Party is an "investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
3.14 Subsidiaries. (a) The Subsidiaries listed on Schedule
3.14(a) constitute all the Subsidiaries of the Borrower at the date hereof.
Schedule 3.14(a) sets forth as of the Closing Date the name and jurisdiction of
incorporation of each Subsidiary and, as to each Subsidiary, the percentage of
each class of Capital Stock owned by each Loan Party and whether such Subsidiary
is an Insurance Subsidiary.
(b) There are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than
restricted stock, stock options granted to employees or directors and directors'
qualifying shares) of any nature relating to any Capital Stock of the Borrower
or any Subsidiary, except as disclosed on Schedule 3.14(b).
3.15 Use of Proceeds. Approximately $55,000,000 of the
proceeds of the Term Loans shall be used repay the AFG Promissory Note plus any
accrued and unpaid interest thereon; and approximately $115,000,000 of the
proceeds of the Term Loans shall be used to make investments in certain of the
Borrower's insurance subsidiaries and to pay fees and expenses. The remaining
proceeds of the Term Loans and proceeds of the Revolving Credit Loans, if any,
shall be used for general corporate purposes of the Borrower and its
Subsidiaries in the ordinary course of business.
3.16 Environmental Matters. Other than exceptions to any
of the following that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect:
(a) The Borrower and its Subsidiaries: (i) are, and
within the period of all applicable statutes of limitation have been, in
compliance with all applicable Environmental Laws; (ii) hold all Environmental
Permits (each of which is in full force and effect) required for any of their
current or intended operations or for any property owned, leased, or otherwise
operated by any of them; (iii) are, and within the period of all applicable
statutes of limitation have been, in compliance with all of their Environmental
Permits; and (iv) reasonably believe that: each of their Environmental Permits
will be timely renewed and complied with, without material expense; any
additional Environmental Permits that may be required of any of them will be
timely obtained and complied with, without material expense; and compliance with
any
36
Environmental Law that is or is expected to become applicable to any of them
will be timely attained and maintained, without material expense.
(b) Materials of Environmental Concern are not present
at, on, under, in, or about any real property now or formerly owned, leased or
operated by the Borrower or any of its Subsidiaries, or at any other location
(including, without limitation, any location to which Materials of Environmental
Concern have been sent for re-use or recycling or for treatment, storage, or
disposal) which could reasonably be expected to (i) give rise to liability of
the Borrower or any of its Subsidiaries under any applicable Environmental Law
or otherwise result in costs to the Borrower or any of its Subsidiaries, or (ii)
interfere with the Borrower's or any of its Subsidiaries' continued operations,
or (iii) impair the fair saleable value of any real property owned or leased by
the Borrower or any of its Subsidiaries.
(c) There is no judicial, administrative, or arbitral
proceeding (including any notice of violation or alleged violation) under or
relating to any Environmental Law to which the Borrower or any of its
Subsidiaries is, or to the knowledge of the Borrower or any of its Subsidiaries
will be, named as a party that is pending or, to the knowledge of the Borrower
or any of its Subsidiaries, threatened.
(d) Neither the Borrower nor any of its Subsidiaries has
received any written request for information, or been notified that it is a
potentially responsible party under or relating to the federal Comprehensive
Environmental Response, Compensation, and Liability Act or any similar
Environmental Law, or with respect to any Materials of Environmental Concern.
(e) Neither the Borrower nor any of its Subsidiaries has
entered into or agreed to any consent decree, order, or settlement or other
agreement, or is subject to any judgment, decree, or order or other agreement,
in any judicial, administrative, arbitral, or other forum for dispute
resolution, relating to compliance with or liability under any Environmental
Law.
(f) Neither the Borrower nor any of its Subsidiaries has
assumed or retained, by contract or operation of law, any liabilities of any
kind, fixed or contingent, known or unknown, under any Environmental Law or with
respect to any Material of Environmental Concern.
(g) It is understood that this Section 3.16 does not
apply to claims made pursuant to policies for which the Borrower or any of its
Subsidiaries is or is asserted to be responsible, issued pursuant to the
insurance business of the Borrower and/or its Insurance Subsidiaries or to the
settlement of any such claims.
3.17 Accuracy of Information, etc. No statement or
information contained in this Agreement, any other Loan Document, the
Confidential Information Memorandum or any other document, certificate or
statement furnished to the Agents or the Lenders or any of them, by or on behalf
of any Loan Party for use in connection with the transactions contemplated by
this Agreement or the other Loan Documents, contained as of the date such
statement, information, document or certificate was so furnished (or, in the
case of the Confidential Information Memorandum, as of the date of this
Agreement), any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements contained herein
37
or therein not misleading. The projections and pro forma financial information
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of the Borrower to be reasonable at the
time made, it being recognized by the Lenders that such financial information as
it relates to future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information may differ
from the projected results set forth therein by a material amount. There is no
fact known to any Loan Party that could reasonably be expected to have a
Material Adverse Effect that has not been expressly disclosed herein, in the
other Loan Documents, in the Confidential Information Memorandum or in any other
documents, certificates and statements furnished to the Agents and the Lenders
for use in connection with the transactions contemplated hereby and by the other
Loan Documents.
3.18 Security Documents. The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Secured Parties, a legal, valid and enforceable security interest
in the Collateral described therein and proceeds thereof. In the case of the
Pledged Stock described in the Guarantee and Collateral Agreement, when any
stock certificates representing such Pledged Stock are delivered to the
Administrative Agent, and in the case of the other Collateral described in the
Guarantee and Collateral Agreement, when financing statements in appropriate
form are filed in the offices specified on Schedule 3.18-1 (which financing
statements have been duly completed and delivered to the Administrative Agent)
and such other filings as are specified on Schedule 3 to the Guarantee and
Collateral Agreement have been completed (all of which filings have been duly
completed), the Guarantee and Collateral Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the Guarantee and Collateral Agreement), in each
case prior and superior in right to any other Person (except, in the case of
Collateral other than Pledged Stock, Liens permitted by Section 6.3). Schedule
3.18-2 lists each UCC Financing Statement that (i) names any Loan Party as
debtor and (ii) will be terminated on or prior to the Closing Date; and on or
prior to the Closing Date, the Borrower will have delivered to the
Administrative Agent, or caused to be filed, duly completed UCC termination
statements, signed by the relevant secured party, if applicable, in respect of
each UCC Financing Statement listed in Schedule 3.18-2.
3.19 Solvency. Each Loan Party is, and after giving effect
to the incurrence of all Indebtedness and obligations being incurred in
connection herewith and therewith will be and will continue to be, Solvent.
3.20 Insurance Regulatory Matters. No License of any
Insurance Subsidiary is the subject of a proceeding for suspension or
revocation. To the knowledge of the Borrower, there is no basis for such
suspension or revocation, and no such suspension or revocation has been
threatened by any Governmental Authority.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Initial Extension of Credit. The
agreement of each Lender to make its Term Loan on the Closing Date is subject to
the satisfaction, prior to or concurrently with the making of such Term Loan on
the Closing Date, of the following conditions precedent:
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(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly authorized officer
of the Borrower, (ii) the Guarantee and Collateral Agreement, executed and
delivered by a duly authorized officer of the Borrower and each Subsidiary
Guarantor, and (iii) a Lender Addendum executed and delivered by each Lender and
accepted by the Borrower.
(b) Pro Forma Balance Sheet; Financial Statements. The
Lenders and the Administrative Agent shall have received (i) the Pro Forma
Balance Sheets and (ii) the financial statements described in Section 3.1(b);
and such financial statements shall not, in the reasonable judgment of the
Lenders, reflect any material adverse change in the financial condition of the
Borrower and its consolidated Subsidiaries, the Borrower or the Insurance
Subsidiaries, as the case may be, as reflected in the financial statements or
projections contained in the Confidential Information Memorandum.
(c) Approvals. All governmental and third party approvals
necessary in connection with the transactions contemplated hereby shall have
been obtained and be in full force and effect.
(d) Repayment of AFG Promissory Note. The Administrative
Agent shall have received evidence satisfactory to the Administrative Agent that
the AFG Promissory Note shall be simultaneously paid in full with the proceeds
of the Term Loans.
(e) Fees. The Lenders, the Administrative Agent and the
Arrangers shall have received all fees required to be paid, and all expenses for
which invoices have been presented (including reasonable fees, disbursements and
other charges of counsel to the Agents), on or before the Closing Date. All such
amounts will be paid with proceeds of Loans made on the Closing Date and will be
reflected in the funding instructions given by the Borrower to the
Administrative Agent on or before the Closing Date.
(f) Business Plan. The Lenders shall have received a
satisfactory business plan for fiscal years 2003-2010 which shall include
quarterly projections through the end of the 2004 fiscal year and annual
projections for each fiscal year thereafter, in each case, with separate (i)
consolidated projections for the Borrower and its Subsidiaries and (ii)
parent-only projections for the Borrower (which shall account for the Borrower's
Subsidiaries using the equity method of accounting), and a satisfactory written
analysis of the business and prospects of the Borrower and its Subsidiaries for
the period from the Closing Date through June 30, 2011.
(g) Lien Searches. The Administrative Agent shall have
received the results of a recent lien search in each of the jurisdictions in
which Uniform Commercial Code financing statement or other filings or
recordations should be made to evidence or perfect security interests in all
assets of the Loan Parties, and such search shall reveal no liens on any of the
assets of the Loan Party, except for Liens permitted by Section 6.3.
(h) Closing Certificate. The Administrative Agent shall
have received a certificate of each Loan Party, dated the Closing Date,
substantially in the form of Exhibit C, with appropriate insertions and
attachments.
39
(i) Legal Opinions. The Administrative Agent shall have
received the legal opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.L.L., counsel to
the Borrower and its Subsidiaries, substantially in the form of Exhibit E. Such
legal opinion shall cover such other matters incident to the transactions
contemplated by this Agreement as the Administrative Agent may reasonably
require.
(j) Pledged Stock; Stock Powers; Acknowledgment and
Consent; Pledged Notes. The Administrative Agent shall have received (i) the
certificates representing the shares of Capital Stock pledged pursuant to the
Guarantee and Collateral Agreement, together with an undated stock power for
each such certificate executed in blank by a duly authorized officer of the
pledgor thereof, (ii) an Acknowledgment and Consent, substantially in the form
of Annex II to the Guarantee and Collateral Agreement, duly executed by any
issuer of Capital Stock pledged pursuant to the Guarantee and Collateral
Agreement that is not itself a party to the Guarantee and Collateral Agreement
and (iii) each promissory note pledged pursuant to the Guarantee and Collateral
Agreement endorsed (without recourse) in blank (or accompanied by an executed
transfer form in blank satisfactory to the Administrative Agent) by the pledgor
thereof.
(k) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing statement)
required by the Security Documents or under law or reasonably requested by the
Administrative Agent to be filed, registered or recorded in order to create in
favor of the Administrative Agent, for the benefit of the Secured Parties, a
perfected Lien on the Collateral described therein, prior and superior in right
to any other Person (other than with respect to Liens expressly permitted by
Section 6.3), shall have been filed, registered or recorded or shall have been
delivered to the Administrative Agent be in proper form for filing, registration
or recordation.
(l) Insurance. The Administrative Agent shall have
received insurance certificates satisfying the requirements of Section 5.3 of
the Guarantee and Collateral Agreement.
(m) Credit Rating. The Agents shall have received
satisfactory evidence that the Borrower has obtained a debt rating for the
Facilities from each of S&P and ▇▇▇▇▇'▇.
(n) Minimum Capital and Surplus. The combined Capital and
Surplus of the Insurance Subsidiaries shall not be less than $324,500,000.
4.2 Conditions to Each Loan. The agreement of each Lender
to make any Loan requested to be made by it hereunder on any date (including,
without limitation, its initial Loan) is subject to the satisfaction of the
following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant to the Loan
Documents shall be true and correct on and as of such date as if made on and as
of such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the Loans
requested to be made on such date.
40
Each borrowing by the Borrower hereunder shall constitute a
representation and warranty by the Borrower as of the date of such borrowing
that the conditions contained in this Section 4.2 have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect or any Loan or other amount is owing to any Lender or any Agent
hereunder, the Borrower shall and shall cause each of its Subsidiaries to:
5.1 Financial Statements. Furnish to each Agent and each
Lender:
(a) (i) as soon as available, but in any event within 90
days after the end of each fiscal year of the Borrower, a copy of (A) the
audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited consolidated
statements of income and of cash flows for such year, setting forth in each case
in comparative form the figures as of the end of and for the previous year,
reported on without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit, by Ernst & Young LLP or
other independent certified public accountants of nationally recognized standing
and (B) the unaudited balance sheet of the Borrower as at the end of such year
and the related unaudited statements of cash income and cash flow for such year
(in each case, which account for the Borrower's Subsidiaries using the equity
method of accounting), setting forth in each case in comparative form the
figures as of the end of and for the previous year; and
(ii) as soon as available, but in any event not later than
45 days after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, (A) the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter and the
related unaudited consolidated statements of income and of cash flows for such
quarter and the portion of the fiscal year through the end of such quarter and
(B) the unaudited balance sheet of the Borrower as at the end of such quarter
and the related unaudited statements of cash income and cash flow for such
quarter (in each case, which account for the Borrower's Subsidiaries using the
equity method of accounting), setting forth in each case in comparative form the
figures as of the end of and for the corresponding period in the previous year,
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
(b) To the extent such a report is required by law to be
prepared, as soon as available but not later than 85 days after the end of each
fiscal year of each Insurance Subsidiary, copies of the unaudited Annual
Statement of such Insurance Subsidiary, certified by a Responsible Officer of
such Insurance Subsidiary, all such statements to be prepared in accordance with
SAP consistently applied throughout the periods reflected therein and, if
41
required by the applicable Governmental Authority, audited and certified by
independent certified public accountants of recognized national standing (it
being understood that 150 days shall be allowed for delivery of audited
statements);
(c) To the extent such a report is required by law to be
prepared, as soon as available but not later than 122 days after the end of each
fiscal year of the Borrower, copies of the consolidated unaudited Annual
Statement of the Insurance Subsidiaries, certified by a Responsible Officer of
the Borrower, all such statements to be prepared in accordance with SAP
consistently applied throughout the periods reflected therein and, if required
by the applicable Governmental Authority, audited and certified by independent
certified public accountants of recognized national standing (it being
understood that 150 days shall be allowed for delivery of audited statements);
(d) as soon as available but not later than 70 days after
the end of each of the first three fiscal quarters of each fiscal year of each
Insurance Subsidiary, copies of the Quarterly Statement of each of the Insurance
Subsidiaries, certified by a Responsible Officer of such Insurance Subsidiary,
all such statements to be prepared in accordance with SAP consistently applied
through the period reflected herein;
(e) within 15 days after being delivered to any Insurance
Subsidiary, any final Report on Examination issued by the applicable Department
or the NAIC that results in material adjustments to the financial statements
referred to in paragraph (b) above; and
(f) within 100 days after the end of each fiscal year of
each Insurance Subsidiary, a copy of the "Statement of Actuarial Opinion" and
"Management Discussion and Analysis" for each such Insurance Subsidiary which is
provided to the applicable Department (or equivalent information should such
Department no longer require such a statement) as to the adequacy of loss
reserves of such Insurance Subsidiary, such opinion to be in the format
prescribed by the insurance code of the state of domicile of such Insurance
Subsidiary.
5.2 Certificates; Other Information. Furnish to each
Agent and each Lender, or, in the case of clause (e), to the relevant Lender:
(a) concurrently with the delivery of the financial
statements referred to in Section 5.1(a)(i) (and, if such financial statements
are audited, Section 5.1(b)), a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default, except as specified in such certificate (it being understood that
such certificate shall be limited to the items that independent certified public
accountants are permitted to cover in such certificates pursuant to their
professional standards and customs of the profession);
(b) concurrently with the delivery of any financial
statements pursuant to Section 5.1, (i) a certificate of a Responsible Officer
stating that, to the best of such Responsible Officer's knowledge, each Loan
Party during such period has observed or performed all of its covenants and
other agreements, and satisfied every condition, contained in this Agreement and
the other Loan Documents to which it is a party to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no knowledge of
any Default or Event of Default
42
except as specified in such certificate and (ii) in the case of quarterly or
annual financial statements, a Compliance Certificate containing all information
and calculations necessary for determining compliance by the Borrower and its
Subsidiaries with the provisions of this Agreement referred to therein as of the
last day of the fiscal quarter or fiscal year of the Borrower, as the case may
be, (y) to the extent not previously disclosed to the Administrative Agent, a
listing of any Intellectual Property acquired by any Loan Party since the date
of the most recent list delivered pursuant to this clause (y) (or, in the case
of the first such list so delivered, since the Closing Date) and (z) any UCC
financing statements or other filings specified in such Compliance Certificate
as being required to be delivered therewith;
(c) as soon as available, and in any event no later than
45 days after the end of each fiscal year of the Borrower, a detailed
consolidated budget for the following fiscal year (including a projected
consolidated balance sheet of the Borrower and its Subsidiaries as of the end of
the following fiscal year, and the related consolidated statements of projected
cash flow (cash flow to be prepared for the Borrower and its Insurance
Subsidiaries using the equity method of accounting), projected changes in
financial position and projected income), and, as soon as available, significant
revisions, if any, of such budget and projections with respect to such fiscal
year (collectively, the "Projections"), which Projections shall in each case be
accompanied by a certificate of a Responsible Officer stating that such
Projections are based on reasonable estimates, information and assumptions and
that such Responsible Officer has no reason to believe that such Projections are
incorrect or misleading in any material respect;
(d) within five days after the same are sent, copies of
all financial statements and reports that the Borrower sends to the holders of
any class of its debt securities or public equity securities and, within five
days after the same are filed, copies of all financial statements and reports
that the Borrower may make to, or file with, the SEC; and
(e) promptly, such additional financial and other
information as any Lender may from time to time reasonably request.
5.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or its Subsidiaries, as the case may be.
5.4 Conduct of Business and Maintenance of Existence,
etc. (a) (i) Preserve, renew and keep in full force and effect its corporate or
other existence and (ii) take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business, except, in each case, as otherwise permitted by Section 6.4 and
except, in the case of clause (ii) above, to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and (b)
comply with all Contractual Obligations and Requirements of Law, except to the
extent that failure to comply therewith could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.
5.5 Maintenance of Property; Insurance. (a) Keep all
Property and systems useful and necessary in its business in good working order
and condition, ordinary wear and tear
43
excepted and (b) maintain with financially sound and reputable insurance
companies (not affiliated with the Borrower) insurance on all its Property in at
least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as are usually
insured against in the same general area by companies engaged in the same or a
similar business.
5.6 Inspection of Property; Books and Records;
Discussions. (a) Keep proper books of records and account in which full, true
and correct entries in conformity with GAAP (or SAP, if applicable) and all
Requirements of Law shall be made of all dealings and transactions in relation
to its business and activities and (b) permit representatives of any Lender to
visit and inspect any of its properties and examine and make abstracts from any
of its books and records at any reasonable time and as often as may reasonably
be desired and to discuss the business, operations, properties and financial and
other condition of the Borrower and its Subsidiaries with officers and employees
of the Borrower and its Subsidiaries and with its independent certified public
accountants.
5.7 Notices. Promptly give notice to the Administrative
Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time between the
Borrower or any of its Subsidiaries and any Governmental Authority, that in
either case, if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower
or any of its Subsidiaries (i) (other than claims-related litigation involving
an Insurance Subsidiary) in which the amount involved is $2,000,000 or more and
not covered by insurance or in which injunctive or similar relief is sought and
(ii) any claims-related litigation affecting any Insurance Subsidiary in which
the exposure (net of reinsurance arrangements) of any Insurance Subsidiary is
$2,000,000 or more and for which it reasonably could be expected that liability
would result;
(d) the following events, as soon as possible and in any
event within 30 days after the Borrower knows or has reason to know thereof: (i)
the occurrence of any Reportable Event with respect to any Plan, a failure to
make any required contribution to a Plan, the creation of any Lien in favor of
the PBGC or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or
the taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal from,
or the termination, Reorganization or Insolvency of, any Plan; and
(e) any development or event that has had or could
reasonably be expected to have a Material Adverse Effect.
44
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower or the relevant Subsidiary proposes to take
with respect thereto.
5.8 Environmental Laws. (a) Comply in all material
respects with, and ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws, and obtain and
comply in all material respects with and maintain, and ensure that all tenants
and subtenants obtain and comply in all material respects with and maintain, any
and all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
5.9 Interest Rate Protection. In the case of the
Borrower, within 90 days after the Closing Date, enter into Hedge Agreements to
the extent necessary to provide that at least 50% of the aggregate principal
amount of the Term Loans is subject to either a fixed interest rate or interest
rate protection for a period of not less than three years, which Hedge
Agreements shall have terms and conditions reasonably satisfactory to the
Administrative Agent.
5.10 Additional Collateral, etc. (a) With respect to any
Property acquired after the Closing Date by the Borrower or any of the
Subsidiary Guarantors (other than (x) any Property described in paragraph (b) or
paragraph (c) of this Section and (y) any Property subject to a Lien expressly
permitted by Section 6.3(g) as to which the Administrative Agent, for the
benefit of the Secured Parties, does not have a perfected Lien, promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement or such other documents as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a security interest in such Property and (ii)
take all actions necessary or advisable to grant to the Administrative Agent,
for the benefit of the Secured Parties, a perfected first priority security
interest in such Property, including without limitation, the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required by
the Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent.
(b) With respect to any fee interest in any real property
having a value (together with improvements thereof) of at least $1,000,000
acquired after the Closing Date by the Borrower or any of the Subsidiary
Guarantors (other than any such real property subject to a Lien expressly
permitted by Section 6.3(g)), promptly (i) execute and deliver a first priority
Mortgage in favor of the Administrative Agent, for the benefit of the Secured
Parties, covering such real property, (ii) if requested by the Administrative
Agent, provide the Lenders with (x) title and extended coverage insurance
covering such real property in an amount at least equal to the purchase price of
such real property (or such other amount as shall be reasonably specified by the
Administrative Agent) as well as a current ALTA survey thereof, together with a
surveyor's certificate and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with such
Mortgage, each of the foregoing
45
in form and substance reasonably satisfactory to the Administrative Agent and
(iii) if requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(c) With respect to any new Subsidiary (other than an
Excluded Foreign Subsidiary or an Excluded Insurance Subsidiary) created or
acquired after the Closing Date by the Borrower or any of the Subsidiary
Guarantors (which, for the purposes of this paragraph, shall include any
existing Subsidiary that ceases to be an Excluded Foreign Subsidiary or an
Excluded Insurance Subsidiary), promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
as the Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Secured Parties, a perfected first
priority security interest in the Capital Stock of such new Subsidiary that is
owned by the Borrower or any of the Subsidiary Guarantors, (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly authorized
officer of the Borrower or such Subsidiary Guarantor, as the case may be, (iii)
cause such new Subsidiary (A) to become a party to the Guarantee and Collateral
Agreement and (B) to take such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Secured Parties a perfected first
priority security interest in the Collateral described in the Guarantee and
Collateral Agreement with respect to such new Subsidiary, including, without
limitation, the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or by
law or as may be requested by the Administrative Agent, and (iv) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(d) With respect to any new Excluded Foreign Subsidiary
or Excluded Insurance Subsidiary created or acquired after the Closing Date by
the Borrower or any of the Subsidiary Guarantors, promptly (i) execute and
deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement or such other documents as the Administrative Agent deems
necessary or advisable in order to grant to the Administrative Agent, for the
benefit of the Secured Parties, a perfected first priority security interest in
the Capital Stock of such new Subsidiary that is owned by the Borrower or any of
the Subsidiary Guarantors, (provided that in no event shall more than 65% of the
total outstanding Capital Stock of any such new Excluded Foreign Subsidiary be
required to be so pledged), (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
Borrower or such Subsidiary Guarantor, as the case may be, and take such other
action as may be necessary or, in the opinion of the Administrative Agent,
desirable to perfect the Lien of the Administrative Agent thereon, and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
5.11 Further Assurances. From time to time execute and
deliver, or cause to be executed and delivered, such additional instruments,
certificates or documents, and take such actions, as the Administrative Agent
may reasonably request for the purposes of implementing or
46
effectuating the provisions of this Agreement and the other Loan Documents, or
of more fully perfecting or renewing the rights of the Administrative Agent and
the Lenders with respect to the Collateral (or with respect to any additions
thereto or replacements or proceeds thereof or with respect to any other
property or assets hereafter acquired by the Borrower or any Subsidiary
Guarantor which may be deemed to be part of the Collateral) pursuant hereto or
thereto. Upon the exercise by the Administrative Agent or any Lender of any
power, right, privilege or remedy pursuant to this Agreement or the other Loan
Documents which requires any consent, approval, recording, qualification or
authorization of any Governmental Authority, the Borrower will execute and
deliver, or will cause the execution and delivery of, all applications,
certifications, instruments and other documents and papers that the
Administrative Agent or such Lender may be required to obtain from the Borrower
or any of its Subsidiary Guarantors for such governmental consent, approval,
recording, qualification or authorization.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect or any Loan or other amount is owing to any Lender or any Agent
hereunder, the Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly:
6.1 Financial Condition Covenants.
(a) Interest Coverage Ratio. Permit the Interest Coverage
Ratio for any period of four consecutive fiscal quarters of the Borrower (or, if
less, the number of full fiscal quarters subsequent to the Closing Date) ending
on any date to be less than 3.50 to 1.00; provided, that for the purposes of
determining the ratio described above for the fiscal quarters of the Borrower
ending September 30, 2003, December 31, 2003 and March 31, 2004, Cash Interest
Expense for the relevant period shall be deemed to equal Cash Interest Expense
for such fiscal quarter (and, in the case of the latter two such determinations,
each previous fiscal quarter commencing after the Closing Date) multiplied by 4,
2 and 4/3, respectively.
(b) Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio for any period of four consecutive fiscal quarters of the
Borrower (or, if less, the number of full fiscal quarters subsequent to the
Closing Date) ending on any date during any period set forth below to be less
than the ratio set forth below opposite such period:
Fixed Charge
Period Coverage Ratio
------ --------------
Closing Date to December 31, 2007 1.25:1.00
January 1, 2008 and thereafter 1.10:1.00
; provided, that for the purposes of determining the ratio described above for
the fiscal quarters of the Borrower ending September 30, 2003, December 31, 2003
and March 31, 2004, Fixed Charges for the relevant period shall be deemed to
equal Fixed Charges for such fiscal quarter (and, in the case of the latter two
such determinations, each previous fiscal quarter commencing after the Closing
Date) multiplied by 4, 2 and 4/3, respectively.
47
(c) Leverage Ratio. Permit the Leverage Ratio as at the
end of any fiscal quarter of the Borrower set forth below to exceed the ratio
set forth below opposite such fiscal quarter:
Leverage
Fiscal Quarter Ended Ratio
-------------------- -----
Closing Date to March 31, 2006 40%
April 1, 2006 and thereafter 35%
(d) Maintenance of Net Worth. Permit Consolidated Net
Worth on any date to be less than the sum of (without duplication) (i)
$320,391,400, (ii) 100% of the Net Cash Proceeds of the issuance or sale of
equity securities by the Borrower consummated after the Closing Date and (iii)
85% of positive Consolidated Net Income of the Borrower for each fiscal quarter
ending after the Closing Date and on or prior to such date of determination,
minus 100% of cash distributions and dividends paid, or shares repurchased, by
the Borrower after the Closing Date and on or prior to such date of
determination, as permitted by Section 6.6.
(e) Maintenance of Capital and Surplus. Permit the
combined Capital and Surplus of the Insurance Subsidiaries on any date of
determination thereof to be less than the sum of (without duplication) (i)
$369,325,000, (ii) 100% of the Net Cash Proceeds of the issuance or sale of
equity securities by the Insurance Subsidiaries to the Borrower consummated
after the Closing Date or any capital contribution made by the Borrower to the
Insurance Subsidiaries after the Closing Date and (iii) 85% of positive combined
Consolidated Net Income of the Insurance Subsidiaries for each fiscal quarter
ending after the Closing Date and on or prior to such date of determination,
minus 100% of cash distributions and dividends paid by the Insurance
Subsidiaries after the Closing Date and on or prior to such date of
determination.
(f) Risk Based Capital Ratio. Permit the Risk Based
Capital Ratio of any Insurance Subsidiary at the end of any fiscal year of any
such Insurance Subsidiary to be less than 400%.
6.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness of (i) the Borrower to any Subsidiary,
(ii) of any Wholly Owned Subsidiary Guarantor to the Borrower or any other
Subsidiary and (iii) any Insurance Subsidiary to any other Insurance Subsidiary;
(c) Indebtedness (including, without limitation, Capital
Lease Obligations) secured by Liens permitted by Section 6.3(g) in an aggregate
principal amount not to exceed $5,000,000 at any one time outstanding;
(d) Indebtedness outstanding on the date hereof and
listed on Schedule 6.2(d) and any refinancings, refundings, renewals or
extensions thereof (without any increase in the principal amount thereof or any
shortening of the maturity of any principal amount thereof);
48
(e) Guarantee Obligations made in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations of the
Borrower or any Subsidiary Guarantor;
(f) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $15,000,000 at any one time outstanding; and
(g) unsecured Indebtedness of the Borrower incurred to
refinance a portion of the Facilities, provided that, (i) such Indebtedness
shall not mature or have any mandatory amortization prior to the date which is
six months after the Maturity Date, (ii) such Indebtedness is incurred pursuant
to documentation containing terms and conditions satisfactory to the Agents,
(iii) immediately prior to and after giving effect to the incurrence of such
Indebtedness, no Default or Event of Default shall have occurred and be
continuing and (iv) the Net Cash Proceeds of such Indebtedness are applied
pursuant to Section 2.9(b).
6.3 Limitation on Liens. Create, incur, assume or suffer
to exist any Lien upon any of its Property, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 30 days or that are being contested in
good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and which do not in any case materially
detract from the value of the Property subject thereto or materially interfere
with the ordinary conduct of the business of the Borrower or any of its
Subsidiaries;
(f) Liens in existence on the date hereof listed on
Schedule 6.3(f), securing Indebtedness permitted by Section 6.2(d), provided
that no such Lien is spread to cover any additional Property after the Closing
Date and that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any
other Subsidiary incurred pursuant to Section 6.2(c) to finance the acquisition
of fixed or capital assets, provided that (i) such Liens shall be created
substantially simultaneously with the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any Property other than the
49
Property financed by such Indebtedness and (iii) the amount of Indebtedness
secured thereby is not increased;
(h) Liens created pursuant to the Security Documents;
(i) Liens on cash and Cash Equivalents, in an aggregate
amount not exceeding $7,000,000 at any time, securing obligations of the
Borrower or any of its Subsidiaries under Specified Hedge Agreements; and
(j) any interest or title of a lessor under any lease
entered into by the Borrower or any other Subsidiary in the ordinary course of
its business and covering only the assets so leased.
6.4 Limitation on Fundamental Changes. Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or Dispose of all or substantially
all of its Property or business, except that:
(a) any Non-Insurance Subsidiary of the Borrower may be
merged or consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any Subsidiary
Guarantor (provided that (i) the Subsidiary Guarantor shall be the continuing or
surviving corporation or (ii) simultaneously with such transaction, the
continuing or surviving corporation shall become a Subsidiary Guarantor and the
Borrower shall comply with Section 5.10 in connection therewith);
(b) any Non-Insurance Subsidiary of the Borrower may
Dispose of any or all of its assets (upon voluntary liquidation or otherwise) to
the Borrower or any Subsidiary Guarantor; and
(c) any Insurance Subsidiary may be merged or
consolidated with or into, and may Dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to any other Insurance Subsidiary.
6.5 Limitation on Disposition of Property. Dispose of any
of its Property (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to any
Person, except:
(a) the Disposition of obsolete or worn out property in
the ordinary course of business;
(b) Dispositions permitted by Section 6.4(b) or (c);
(c) the sale or issuance of any Subsidiary's Capital
Stock to the Borrower or any Subsidiary Guarantor;
(d) the Disposition for fair value of cash, Cash
Equivalents or investments made pursuant to Section 6.8(b);
50
(e) the sale or issuance or contribution of any Insurance
Subsidiary's Capital Stock to any other Insurance Subsidiary;
(f) the Disposition by any Insurance Subsidiary in the
ordinary course of business of assets held in its investment portfolio;
(g) the Disposition of other assets having a fair market
value not to exceed $2,500,000 in the aggregate for any fiscal year of the
Borrower and the sale of real property located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇, provided, that the requirements of Section 2.9(c) are complied
with in connection therewith; and
(h) any Recovery Event, provided, that the requirements
of Section 2.9(c) are complied with in connection therewith.
6.6 Limitation on Restricted Payments. Declare or pay any
dividend on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of the Borrower or any
Subsidiary, whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash or property
or in obligations of the Borrower or any Subsidiary, or enter into any
derivatives or other transaction with any financial institution, commodities or
stock exchange or clearinghouse (a "Derivatives Counterparty") obligating the
Borrower or any Subsidiary to make payments to such Derivatives Counterparty as
a result of any change in market value of any such Capital Stock (collectively,
"Restricted Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the
Borrower or any Subsidiary Guarantor, and any Insurance Subsidiary may make
Restricted Payments to any other Insurance Subsidiary;
(b) the Borrower may make Restricted Payments in the form
of common stock of the Borrower;
(c) the Borrower may purchase the Borrower's common stock
or common stock options from present or former officers or employers of the
Borrower or any Subsidiary upon the death, disability or termination of
employment of such officer or employer, provided, that the aggregate amount of
payments under this paragraph subsequent to the date hereof (net of any proceeds
received by the Borrower subsequent to the date hereof in connection with
resales of any common stock or common stock options so purchased) shall not
exceed $3,500,000; and
(d) the Borrower may make Restricted Payments to the
holders of its common stock in an amount not to exceed $10,000,000 during any
fiscal year of the Borrower.
6.7 Limitation on Capital Expenditures. Make or commit to
make any Capital Expenditure (a) except Capital Expenditures of the Borrower and
its Subsidiaries in the ordinary course of business not exceeding $10,000,000
during any fiscal year of the Borrower; provided that (i) up to 50% of any such
amount referred to above, if not so expended in the fiscal year for which it is
permitted, may be carried over for expenditure in the next succeeding fiscal
year and (ii) Capital Expenditures made pursuant to this clause (a) during any
fiscal year shall be deemed
51
made, first, in respect of amounts permitted for such fiscal year as provided
above and second, in respect of amounts carried over from the prior fiscal year
pursuant to subclause (i) above and (b) Capital Expenditures made with the
proceeds of any Reinvestment Deferred Amount.
6.8 Limitation on Investments. Make any advance, loan,
extension of credit (by way of guaranty or otherwise) or capital contribution
to, or purchase any Capital Stock, bonds, notes, debentures or other debt
securities of, or any assets constituting an ongoing business from, or make any
other investment in, any other Person (all of the foregoing, "Investments"),
except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents or any other
investment by the Borrower or any Non-Insurance Subsidiary in assets in which
the Insurance Subsidiaries could invest consistent with applicable investment
guidelines;
(c) Investments arising in connection with the incurrence
of Indebtedness permitted by Section 6.2(b) and (e);
(d) loans and advances to employees of the Borrower or
any Subsidiaries of the Borrower in the ordinary course of business (including,
without limitation, for travel, entertainment and relocation expenses) in an
aggregate amount for the Borrower and Subsidiaries of the Borrower not to exceed
$1,000,000 at any one time outstanding;
(e) Investments in assets useful in the Borrower's
business made by the Borrower or any of its Subsidiaries with the proceeds of
any Reinvestment Deferred Amount;
(f) Investments (other than those relating to the
incurrence of Indebtedness permitted by Section 6.8(c)) by the Borrower or any
of its Subsidiaries in the Borrower or any Person that, prior to such
Investment, is a Subsidiary Guarantor;
(g) Investments in, and additional capital contributions
to, Insurance Subsidiaries of the Borrower by the Borrower and the Subsidiaries;
(h) Investments by any Insurance Subsidiary in the
ordinary course of business in investment portfolio investments; and
(i) in addition to Investments otherwise expressly
permitted by this Section, Investments by the Borrower or any of its
Subsidiaries in an aggregate amount (valued at cost) not to exceed $10,000,000
during the term of this Agreement, provided that, any amount utilized to make an
Investment pursuant to this Section 6.8(i) shall be reduced by the amount of any
net cash proceeds received by the Borrower or any of its Subsidiaries upon the
Disposition of such Investment or upon the repayment of any loan or advance
constituting such Investment and, provided further, that any such reduction
shall not exceed the original amount of the related Investment.
52
6.9 Limitation on Modifications of Articles of
Incorporation. Amend its articles of incorporation in any manner reasonably
determined by the Administrative Agent to be adverse to the Lenders.
6.10 Limitation on Transactions with Affiliates. Enter
into any transaction, including, without limitation, any purchase, sale, lease
or exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Borrower or any Subsidiary Guarantor) unless such transaction is (a) otherwise
permitted under this Agreement, (b) in the ordinary course of business of the
Borrower or such Subsidiary, as the case may be, and (c) upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's length transaction with
a Person that is not an Affiliate.
6.11 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary.
6.12 Limitation on Changes in Fiscal Periods. Permit the
fiscal year of the Borrower to end on a day other than December 31 or change the
Borrower's method of determining fiscal quarters.
6.13 Limitation on Negative Pledge Clauses. Enter into or
suffer to exist or become effective any agreement that prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its Property or revenues, whether now owned
or hereafter acquired, to secure the Obligations or, in the case of any
guarantor, its obligations under the Guarantee and Collateral Agreement, other
than (a) this Agreement and the other Loan Documents and (b) any agreements
governing any purchase money Liens or Capital Lease Obligations otherwise
permitted hereby (in which case, any prohibition or limitation shall only be
effective against the assets financed thereby).
6.14 Limitation on Restrictions on Subsidiary
Distributions. Enter into or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary to (a) make
Restricted Payments in respect of any Capital Stock of such Subsidiary held by,
or pay any Indebtedness owed to, the Borrower or any other Subsidiary, (b) make
Investments in the Borrower or any other Subsidiary or (c) transfer any of its
assets to the Borrower or any other Subsidiary, except for such encumbrances or
restrictions existing under or by reason of (i) any restrictions existing under
the Loan Documents, (ii) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement that has been entered into in connection with the
Disposition of all or substantially all of the Capital Stock or assets of such
Subsidiary and (iii) any Insurance Regulation.
6.15 Limitation on Lines of Business. Enter into any
business, either directly or through any Subsidiary, except for those businesses
in which the Borrower and its Subsidiaries are engaged on the date of this
Agreement or that are reasonably related thereto.
53
6.16 Limitation on Hedge Agreements. Enter into any Hedge
Agreement other than Hedge Agreements entered into in the ordinary course of
business, and not for speculative purposes, in respect of changes in interest
rates or foreign exchange rates.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any
Loan when due in accordance with the terms hereof; or the Borrower shall fail to
pay any interest on any Loan, or any other amount payable hereunder or under any
other Loan Document, within five days after any such interest or other amount
becomes due in accordance with the terms hereof or thereof; or
(b) any representation or warranty made or deemed made by
any Loan Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been inaccurate in any material respect on or as of the date
made or deemed made or furnished; or
(c) (i) any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section 5.4(a)
(with respect to the Borrower only), Section 5.7(a) or Section 6, or in Section
5 of the Guarantee and Collateral Agreement or (ii) an "Event of Default" under
and as defined in any Mortgage shall have occurred and be continuing; or
(d) any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this Section),
and such default shall continue unremedied for a period of 30 days after (i) the
date of notice of such default to the Borrower from the Administrative Agent or
(ii) the date on which a Responsible Officer knew or should have known of such
default; or
(e) the Borrower or any of its Subsidiaries shall (i)
default in making any payment of any principal of any Indebtedness (including,
without limitation, any Guarantee Obligation, but excluding the Loans) on the
scheduled or original due date with respect thereto; or (ii) default in making
any payment of any interest on any such Indebtedness beyond the period of grace,
if any, provided in the instrument or agreement under which such Indebtedness
was created; or (iii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or to become subject to or mandatory offer to
purchase by the obligor thereunder or (in the case of any such Indebtedness
constituting a Guarantee Obligation) to become payable; provided, that a
default, event or condition described in clause (i), (ii) or (iii) of this
paragraph (e) shall not at any time constitute an Event of Default unless, at
such time, one or more defaults, events or
54
conditions of the type described in clauses (i), (ii) and (iii) of this
paragraph (e) shall have occurred and be continuing with respect to Indebtedness
the outstanding principal amount of which exceeds in the aggregate $10,000,000;
or
(f) (i) the Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or the Borrower or any of its Subsidiaries shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against the Borrower or any of its Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above that (A) results in the entry
of an order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii) there
shall be commenced against the Borrower or any of its Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets that results in the entry of an order for any such relief that shall
not have been vacated, discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or (iv) the Borrower or any of its Subsidiaries
shall take any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) the Borrower or any of its Subsidiaries shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(g) any Person shall engage in (i) any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan, or any Lien in favor of the PBGC or a Plan shall arise on the assets of
the Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate, any
Single Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required Lenders,
likely to result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of
ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Required Lenders shall be likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or condition
shall occur or exist with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other such events
or conditions, if any, could, in the sole judgment of the Required Lenders,
reasonably be expected to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving for the Borrower and
its Subsidiaries taken as a whole a liability (not paid or fully covered by
insurance as to which the relevant insurance company has acknowledged coverage)
of $10,000,000 or more, and all such judgments or decrees shall not
55
have been vacated, discharged, stayed or bonded pending appeal within 30 days
from the entry thereof; or
(i) any of the Security Documents shall cease, for any
reason (other than by reason of the express release thereof pursuant to Section
9.15), to be in full force and effect, or any Loan Party or any Affiliate of any
Loan Party shall so assert, or any Lien created by any of the Security Documents
shall cease to be enforceable and of the same effect and priority purported to
be created thereby; or
(j) the guarantee contained in Section 2 of the Guarantee
and Collateral Agreement shall cease, for any reason (other than by reason of
the express release thereof pursuant to Section 9.15, to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party shall so assert; or
(k) any Change of Control shall occur; or
(l) (i) any Insurance Subsidiary shall fail to comply
with any material term or provision of any Insurance Regulations pertaining to
fiscal soundness, solvency or financial condition; or (ii) an Insurance
Regulator shall assert in writing that it is taking administrative action
against any Insurance Subsidiary to revoke or modify any contract of insurance,
license, permit, certification, authorization, accreditation or charter or to
enforce the fiscal soundness, solvency or financial provisions or requirements
of any Insurance Regulations against any Insurance Subsidiary and such Insurance
Subsidiary shall have been unable to cause such Insurance Regulator to withdraw
such written notice within five Business Days following receipt of such written
notice by such Insurance Subsidiary;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents shall immediately become due and payable,
and (B) if such event is any other Event of Default, either or both of the
following actions may be taken: (i) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower declare the Revolving
Credit Commitments, if any, to be terminated forthwith, whereupon the Revolving
Credit Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
SECTION 8. THE AGENTS
8.1 Appointment. Each Lender hereby irrevocably
designates and appoints the Agents as the agents of such Lender under this
Agreement and the other Loan Documents, and each Lender irrevocably authorizes
each Agent, in such capacity, to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise
56
such powers and perform such duties as are expressly delegated to such Agent by
the terms of this Agreement and the other Loan Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary elsewhere in this Agreement, no Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against any Agent.
8.2 Delegation of Duties. Each Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. No Agent shall be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care.
8.3 Exculpatory Provisions. Neither any Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except to the extent that any of the foregoing are found by a final
and nonappealable decision of a court of competent jurisdiction to have resulted
from its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agents under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of any Loan Party to perform its obligations hereunder or thereunder. The Agents
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.
8.4 Reliance by Agents. Each Agent shall be entitled to
rely, and shall be fully protected in relying, upon any instrument, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Loan Parties), independent accountants and
other experts selected by such Agent. The Agents may deem and treat the payee of
any Note as the owner thereof for all purposes unless such Note shall have been
transferred in accordance with Section 9.6 and all actions required by such
Section in connection with such transfer shall have been taken. Each Agent shall
be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders (or, if so specified by this Agreement,
all Lenders or any other instructing group of Lenders specified by this
Agreement) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action.
Each Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement and the other Loan
57
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders or any other instructing group of
Lenders specified by this Agreement), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
8.5 Notice of Default. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent shall have received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." In the event that
the Administrative Agent shall receive such a notice, the Administrative Agent
shall give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders or any other instructing group of Lenders specified by
this Agreement); provided that unless and until the Administrative Agent shall
have received such directions, the Administrative 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.
8.6 Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither any of the Agents nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
any Agent hereafter taken, including any review of the affairs of a Loan Party
or any affiliate of a Loan Party, shall be deemed to constitute any
representation or warranty by any Agent to any Lender. Each Lender represents to
the Agents that it has, independently and without reliance upon any 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,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon any 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 under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, no Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
8.7 Indemnification. The Lenders agree to indemnify each
Agent in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and
58
the Loans shall have been paid in full, ratably in accordance with such
Aggregate Exposure Percentages immediately prior to such date), for, and to save
each Agent harmless from and against, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever that may at any time (including, without
limitation, at any time following the payment of the Loans) be imposed on,
incurred by or asserted against such Agent in any way relating to or arising out
of, the Commitments, this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from such Agent's gross negligence or
willful misconduct. The agreements in this Section shall survive the payment of
the Loans and all other amounts payable hereunder.
8.8 Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent were not an Agent.
With respect to its Loans made or renewed by it, each Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not an Agent, and the terms
"Lender" and "Lenders" shall include each Agent in its individual capacity.
8.9 Successor Administrative Agent. The Administrative
Agent may resign as Administrative Agent upon 10 days' notice to the Lenders and
the Borrower. If the Administrative Agent shall resign as Administrative Agent
under this Agreement and the other Loan Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 7(a) or Section
7(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted appointment as Administrative Agent by the date that is 10 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. The Syndication Agent may, at
any time, by notice to the Lenders and the Administrative Agent, resign as
Syndication Agent hereunder, whereupon the duties, rights, obligations and
responsibilities of the Syndication Agent hereunder shall automatically be
assumed by, and inure to the benefit of, the Administrative Agent, without any
further act by the Syndication Agent, the Administrative Agent or any Lender.
After any retiring Agent's resignation as Agent, the provisions of this Section
8 shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Agent under this Agreement and the other Loan Documents.
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8.10 Authorization to Release Liens and Guarantees. The
Administrative Agent is hereby irrevocably authorized by each of the Lenders to
effect any release of Liens or guarantee obligations contemplated by Section
9.15.
8.11 The Arrangers; the Syndication Agent. Neither the
Arrangers nor the Syndication Agent, in their respective capacities as such,
shall have no duties or responsibilities, and shall incur no liability, under
this Agreement and the other Loan Documents.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement or any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 9.1. The Required Lenders and each Loan Party party to the relevant Loan
Document may, or (with the written consent of the Required Lenders) the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents (including amendments and
restatements hereof or thereof) for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as may be specified in the instrument of waiver, any of the
requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall:
(i) forgive the principal amount or extend the final
scheduled date of maturity of any Loan, extend the
scheduled date of any amortization payment in respect
of any Term Loan, reduce the stated rate of any
interest or fee payable hereunder or extend the
scheduled date of any payment thereof, amend the
definition of "Interest Period" to provide for
periods in excess of six months or increase the
amount or extend the expiration date of any
Commitment of any Lender, in each case without the
consent of each Lender directly affected thereby;
(ii) amend, modify or waive any provision of this Section
or reduce any percentage specified in the definition
of Required Lenders or Required Prepayment Lenders,
consent to the assignment or transfer by the Borrower
of any of its rights and obligations under this
Agreement and the other Loan Documents, release all
or substantially all of the Collateral or release all
or substantially all of the Subsidiary Guarantors
from their guarantee obligations under the Guarantee
and Collateral Agreement, in each case without the
consent of all Lenders;
(iii) amend, modify or waive any condition precedent to any
extension of credit under the Revolving Credit
Facility set forth in Section 4.2 (including, without
limitation, the waiver of an existing Default or
Event of Default required to be waived in order for
such extension of credit to be
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made) without the consent of any Majority Revolving
Credit Facility Lenders;
(iv) reduce the percentage specified in the definition of
Majority Facility Lenders with respect to any
Facility without the written consent of all Lenders
under such Facility;
(v) amend, modify or waive any provision of Section 8
without the consent of any Agent directly affected
thereby;
(vi) amend, modify or waive any provision of Section 2.15
without the consent of each Lender directly affected
thereby; or
(vii) impose restrictions on assignments and participations
that are more restrictive than, or additional to,
those set forth in Section 9.6 without the consent of
each Lender directly affected thereby.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Agents and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Agents shall be restored to their
former position and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon. Any such waiver,
amendment, supplement or modification shall be effected by a written instrument
signed by the parties required to sign pursuant to the foregoing provisions of
this Section; provided, that delivery of an executed signature page of any such
instrument by facsimile transmission shall be effective as delivery of a
manually executed counterpart thereof.
For the avoidance of doubt, this Agreement and any other Loan
Document may be amended (or amended and restated) with the written consent of
the Required Lenders, the Administrative Agent and each Loan Party to each
relevant Loan Document (x) to add one or more additional credit facilities to
this Agreement and to permit the extensions of credit from time to time
outstanding thereunder and the accrued interest and fees in respect thereof
(collectively, the "Additional Extensions of Credit") to share ratably in the
benefits of this Agreement and the other Loan Documents with the Term Loans and
Revolving Credit Loans and the accrued interest and fees in respect thereof and
(y) to include appropriately the Lenders holding such credit facilities in any
determination of the Required Lenders, Required Prepayment Lenders and Majority
Revolving Facility Lenders; provided, however, that no such amendment shall
permit the Additional Extensions of Credit to share with preference to the Loans
in the application of mandatory prepayments without the consent of the Required
Prepayment Lenders.
9.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy
61
notice, when received, addressed (a) in the case of the Borrower and the Agents,
as follows and (b) in the case of the Lenders, as set forth in an administrative
questionnaire delivered to the Administrative Agent or on Schedule I to the
Lender Addendum or New Lender Supplement to which such Lender is a party or, in
the case of a Lender which becomes a party to this Agreement pursuant to an
Assignment and Acceptance, in such Assignment and Acceptance or (c) in the case
of any party, to such other address as such party may hereafter notify to the
other parties hereto:
The Borrower: Infinity Property and Casualty Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Syndication Agent: Bear ▇▇▇▇▇▇▇ Corporate Lending Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent: ▇▇▇▇▇▇ Commercial Paper Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the any Agent, or any
Lender shall not be effective until received.
9.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of any Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All
representations and warranties made herein, in the other Loan Documents and in
any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
9.5 Payment of Expenses. The Borrower agrees (a) to pay
or reimburse the Administrative Agent and the Arrangers for all their reasonable
out-of-pocket costs and expenses
62
incurred in connection with the syndication of the Facilities (other than fees
payable to syndicate members) and the development, preparation and execution of,
and any amendment, supplement or modification to, this Agreement and the other
Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements and other charges of counsel to the Administrative Agent
and the charges of Intralinks, (b) to pay or reimburse each Lender and the
Agents for all their costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any other documents prepared in connection herewith or therewith,
including, without limitation, the fees and disbursements of counsel (including
the allocated fees and disbursements and other charges of in-house counsel) to
each Lender and of counsel to the Agents, (c) to pay, indemnify, or reimburse
each Lender and the Agents for, and hold each Lender and the Agents harmless
from, any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify or
reimburse each Lender, each Agent, their respective affiliates, and their
respective officers, directors, trustees, employees, advisors, agents and
controlling persons (each, an "Indemnitee") for, and hold each Indemnitee
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan
Documents and any such other documents, including, without limitation, any of
the foregoing relating to the use of proceeds of the Loans or the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of the Borrower any of its Subsidiaries or any of the Properties and
the fees and disbursements and other charges of legal counsel in connection with
claims, actions or proceedings by any Indemnitee against the Borrower hereunder
(all the foregoing in this clause (d), collectively, the "Indemnified
Liabilities"), provided, that the Borrower shall have no obligation hereunder to
any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee. No Indemnitee shall be liable for any
damages arising from the use by unauthorized persons of Information or other
materials sent through electronic, telecommunications or other information
transmission systems that are intercepted by such persons or for any special,
indirect, consequential or punitive damages in connection with the Facilities.
Without limiting the foregoing, and to the extent permitted by applicable law,
the Borrower agrees not to assert and to cause its Subsidiaries not to assert,
and hereby waives and agrees to cause its Subsidiaries so to waive, all rights
for contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to Environmental Laws, that any of
them might have by statute or otherwise against any Indemnitee. All amounts due
under this Section shall be payable not later than 30 days after written demand
therefor. Statements payable by the Borrower pursuant to this Section shall be
submitted to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇) (Fax No. (205)
▇▇▇-▇▇▇▇), at the address of the Borrower set
63
forth in Section 9.2, or to such other Person or address as may be hereafter
designated by the Borrower in a notice to the Administrative Agent. The
agreements in this Section shall survive repayment of the Loans and all other
amounts payable hereunder.
9.6 Successors and Assigns; Participations and
Assignments. (a) This Agreement shall be binding upon and inure to the benefit
of the Borrower, the Lenders, the Agents, all future holders of the Loans and
their respective successors and assigns, except that the Borrower may not assign
or transfer any of its rights or obligations under this Agreement without the
prior written consent of the Agents and each Lender.
(b) Any Lender may, without the consent of the Borrower,
in accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a "Participant") participating
interests in any Loan owing to such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Agents shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event shall
any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would require the consent of all Lenders pursuant to Section
9.1. The Borrower agrees that if amounts outstanding under this Agreement and
the Loans are due or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall, to the maximum extent permitted by applicable law, be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in Section
9.7(a) as fully as if such Participant were a Lender hereunder. The Borrower
also agrees that each Participant shall be entitled to the benefits of Sections
2.16, 2.17 and 2.18 with respect to its participation in the Commitments and the
Loans outstanding from time to time as if such Participant were a Lender;
provided that, in the case of Section 2.17, such Participant shall have complied
with the requirements of said Section, and provided, further, that no
Participant shall be entitled to receive any greater amount pursuant to any such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with
applicable law and upon written notice to the Administrative Agent, at any time
and from time to time assign to any Lender or any affiliate, Related Fund or
Control Investment Affiliate thereof or, with the consent of the Borrower and
the Agents (which, in each case, shall not be unreasonably withheld or delayed)
(provided (x) that no such consent need be obtained by the Agents or their
affiliates and (y) the consent of the Borrower need not be obtained with respect
to any assignment of Term
64
Loans), to an additional bank, financial institution or other entity (an
"Assignee") all or any part of its rights and obligations under this Agreement
pursuant to an Assignment and Acceptance, substantially in the form of Exhibit
D, executed by such Assignee and such Assignor (and, where the consent of the
Borrower or the Agents is required pursuant to the foregoing provisions, by the
Borrower and such other Persons) and delivered to the Administrative Agent for
its acceptance and recording in the Register; provided that no such assignment
to an Assignee (other than any Lender or any affiliate thereof or any Related
Fund) shall be in an aggregate principal amount of less than, with respect to
the Term Loans, $1,000,000, and, with respect to the Revolving Credit Loans, the
amount set forth in the Revolving Credit Supplement, and, after giving effect
thereto, the related Assignor shall have Commitments and Loans aggregating at
least $1,000,000, in the case of the Term Loan Facility, and, the amount set
forth in the Revolving Credit Supplement, in the case of the Revolving Credit
Facility (other than in the case of an assignment to a Related Fund or of all of
a Lender's interests under this Agreement), unless otherwise agreed by the
Borrower and the Administrative Agent. Any such assignment need not be ratable
as among the Facilities. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with Commitments and/or Loans as set forth
therein, and (y) the Assignor thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of an Assignor's
rights and obligations under this Agreement, such Assignor shall cease to be a
party hereto, except as to Section 2.16, 2.17 and 9.5 in respect of the period
prior to such effective date). Notwithstanding any provision of this Section,
the consent of the Borrower shall not be required for any assignment that occurs
at any time when any Event of Default shall have occurred and be continuing. For
purposes of the minimum assignment amounts set forth in this paragraph, multiple
assignments by two or more Related Funds shall be aggregated.
(d) The Administrative Agent shall, on behalf of the
Borrower, maintain at its address referred to in Section 9.2 a copy of each
Assignment and Acceptance delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Lenders and the Commitment of,
and principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, each Agent and the Lenders shall treat each Person whose name
is recorded in the Register as the owner of the Loans and any Notes evidencing
such Loans recorded therein for all purposes of this Agreement. Any assignment
of any Loan, whether or not evidenced by a Note, shall be effective only upon
appropriate entries with respect thereto being made in the Register (and each
Note shall expressly so provide). Any assignment or transfer of all or part of a
Loan evidenced by a Note shall be registered on the Register only upon surrender
for registration of assignment or transfer of the Note evidencing such Loan,
accompanied by a duly executed Assignment and Acceptance; thereupon one or more
new Notes in the same aggregate principal amount shall be issued to the
designated Assignee, and the old Notes shall be returned by the Administrative
Agent to the Borrower marked "canceled." The Register shall be available for
inspection by the Borrower or any Lender (with respect to any entry relating to
such Lender's Loans) at any reasonable time and from time to time upon
reasonable prior notice. If any amendment or waiver relating to this Agreement
or any other Loan Document is pending, at the
65
request of any Lender, the Administrative Agent shall provide such Lender with a
list of the names of all the Lenders.
(e) Upon its receipt of an Assignment and Acceptance
executed by an Assignor and an Assignee (and, in any case where the consent of
any other Person is required by Section 9.6(c), by each such other Person)
together with payment (by the Assignor or the Assignee, as agreed between them)
to the Administrative Agent of a registration and processing fee of $3,500
(treating multiple, simultaneous assignments by or to two or more Related Funds
as a single assignment) (except that no such registration and processing fee
shall be payable (y) in connection with an assignment by or to a ▇▇▇▇▇▇ Entity
or (z) in the case of an Assignee which is already a Lender or is an affiliate
or Related Fund of a Lender or a Person under common management with a Lender),
the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Borrower. On or prior to such effective date, the
Borrower, at its own expense, upon request, shall execute and deliver to the
Administrative Agent (in exchange for the Revolving Credit Note and/or Term
Note, as the case may be, of the assigning Lender) a new Revolving Credit Note
and/or Term Note, as the case may be, to the order of such Assignee in an amount
equal to the Revolving Credit Commitment and/or Term Loans, as the case may be,
assumed or acquired by it pursuant to such Assignment and Acceptance and, if the
Assignor has retained a Revolving Credit Commitment and/or Term Loan, as the
case may be, upon request, a new Revolving Credit Note and/or Term Note, as the
case may be, to the order of the Assignor in an amount equal to the Revolving
Credit Commitment and/or Term Loan, as the case may be, retained by it
hereunder. Such new Note or Notes shall be dated the Closing Date and shall
otherwise be in the form of the Note or Notes replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of Loans
and Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests in Loans and Notes, including,
without limitation, any pledge or assignment by a Lender of any Loan or Note to
any Federal Reserve Bank in accordance with applicable law.
(g) Notwithstanding anything to the contrary contained
herein, any Lender (a "Granting Lender") may grant to a special purpose funding
vehicle (an "SPC"), identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrower, the option to
provide to the Borrower all or any part of any Loan that such Granting Lender
would otherwise be obligated to make to the Borrower pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any SPC to
make any Loan and (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan
by an SPC hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other indebtedness of any SPC, it will
not
66
institute against, or join any other person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under the laws of the United States or any state thereof. In addition,
notwithstanding anything to the contrary in this Section 9.6(g), any SPC may (A)
with notice to, but without the prior written consent of, the Borrower and the
Administrative Agent and without paying any processing fee therefor, assign all
or a portion of its interests in any Loans to the Granting Lender, or with the
prior written consent of the Borrower and the Administrative Agent (which
consent shall not be unreasonably withheld) to any financial institutions
providing liquidity and/or credit support to or for the account of such SPC to
support the funding or maintenance of Loans, and (B) disclose on a confidential
basis any non-public information relating to its Loans to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC; provided that non-public information with
respect to the Borrower may be disclosed only with the Borrower's consent which
will not be unreasonably withheld. This paragraph (g) may not be amended without
the written consent of any SPC with Loans outstanding at the time of such
proposed amendment.
9.7 Adjustments; Set-off. (a) Except to the extent that
this Agreement provides for payments to be allocated to a particular Lender or
to the Lenders under a particular Facility, if any Lender (a "Benefitted
Lender") shall at any time receive any payment of all or part of the Obligations
owing to it, or receive any collateral in respect thereof (whether voluntarily
or involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 7(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Obligations, such Benefitted Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender's Obligations, or shall provide such other Lenders with the
benefits of any such collateral, as shall be necessary to cause such Benefitted
Lender to share the excess payment or benefits of such collateral ratably with
each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.
9.8 Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an
67
executed signature page of this Agreement or of a Lender Addendum by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof. A set of the copies of this Agreement signed by all the parties shall be
lodged with the Borrower and the Administrative Agent.
9.9 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.10 Integration. This Agreement and the other Loan
Documents represent the entire agreement of the Borrower, the Agents, the
Arranger and the Lenders with respect to the subject matter hereof and thereof,
and there are no promises, undertakings, representations or warranties by the
Arranger, any Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.12 Submission To Jurisdiction; Waivers. The Borrower
hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal
action or proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 9.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or consequential
damages.
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9.13 Acknowledgments. The Borrower hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Arranger, any Agent nor any Lender has
any fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Arranger, the Agents and the Lenders, on one hand, and
the Borrower, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and
(c) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Arranger, the Agents and the Lenders or among the Borrower and
the Lenders.
9.14 Confidentiality. Each of the Agents and the Lenders
agrees to keep confidential all non-public information provided to it by any
Loan Party pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent any Agent or any Lender
from disclosing any such information (a) to the Arranger, any Agent, any other
Lender or any affiliate of any thereof, (b) to any Participant or Assignee
(each, a "Transferee") or prospective Transferee that agrees to comply with the
provisions of this Section or substantially equivalent provisions, (c) to any of
its employees, directors, agents, attorneys, accountants and other professional
advisors, (d) to any financial institution that is a direct or indirect
contractual counterparty in swap agreements or such contractual counterparty's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty agrees to be bound by the provisions of
this Section), (e) upon the request or demand of any Governmental Authority
having jurisdiction over it, (f) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (g) in connection with any litigation or similar proceeding,
(h) that has been publicly disclosed other than in breach of this Section, (i)
to the NAIC or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender or (j) in
connection with the exercise of any remedy hereunder or under any other Loan
Document. Notwithstanding anything herein to the contrary, any party subject to
confidentiality obligations hereunder or under any other related document (and
any employee, representative or other agent of such party) may disclose to any
and all persons, without limitation of any kind, such party's U.S. federal
income tax treatment and the U.S. federal income tax structure of the
transactions contemplated by this Agreement relating to such party and all
materials of any kind (including opinions or other tax analyses) that are
provided to it relating to such tax treatment and tax structure. However, no
such party shall disclose any information relating to such tax treatment or tax
structure to the extent nondisclosure is reasonably necessary in order to comply
with applicable securities laws.
9.15 Release of Collateral and Guarantee Obligations.
(a) Notwithstanding anything to the contrary contained
herein or in any other Loan Document, upon request of the Borrower in connection
with any Disposition of Property
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permitted by the Loan Documents, the Administrative Agent shall (without notice
to, or vote or consent of, any Lender, or any affiliate of any Lender that is a
party to any Specified Hedge Agreement) take such actions as shall be required
to release its security interest in any Collateral being Disposed of in such
Disposition, and to release any guarantee obligations under any Loan Document of
any Person being Disposed of in such Disposition, to the extent necessary to
permit consummation of such Disposition in accordance with the Loan Documents.
(b) Notwithstanding anything to the contrary contained
herein or any other Loan Document, when all Obligations (other than obligations
in respect of any Specified Hedge Agreement) have been paid in full, all
Commitments have terminated or expired, upon request of the Borrower, the
Administrative Agent shall (without notice to, or vote or consent of, any
Lender, or any affiliate of any Lender that is a party to any Specified Hedge
Agreement) take such actions as shall be required to release its security
interest in all Collateral, and to release all guarantee obligations under any
Loan Document, whether or not on the date of such release there may be
outstanding Obligations in respect of Specified Hedge Agreements. Any such
release of guarantee obligations shall be deemed subject to the provision that
such guarantee obligations shall be reinstated if after such release any portion
of any payment in respect of the Obligations guaranteed thereby shall be
rescinded or must otherwise be restored or returned upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Subsidiary Guarantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the Borrower or
any Subsidiary Guarantor or any substantial part of its property, or otherwise,
all as though such payment had not been made.
(c) Upon the Borrower's request, the Administrative Agent
will release any security interest created pursuant to the Guarantee and
Collateral Agreement in any cash or Cash Equivalents on which a Lien is to be
created pursuant Section 6.4(i).
9.16 Accounting Changes. In the event that any "Accounting
Change" (as defined below) shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement, then the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Change with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Change as if such Accounting Change had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Change had not occurred. "Accounting Change"
refers to any change in accounting principles required by the promulgation of
any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants,
applicable Insurance Regulators, the NAIC or, if applicable, the SEC.
9.17 Delivery of Lender Addenda. Each initial Lender shall
become a party to this Agreement by delivering to the Administrative Agent a
Lender Addendum duly executed by such Lender, the Borrower and the
Administrative Agent.
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9.18 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
INFINITY PROPERTY AND CASUALTY
CORPORATION
By: ______________________________________
Name:
Title:
BEAR, ▇▇▇▇▇▇▇ & CO. INC., as Arranger
By: ______________________________________
Name:
Title:
▇▇▇▇▇▇ BROTHERS INC., as Arranger
By: ______________________________________
Name:
Title:
BEAR ▇▇▇▇▇▇▇ CORPORATE LENDING INC.,
as Syndication Agent
By: ______________________________________
Name:
Title:
▇▇▇▇▇▇ COMMERCIAL PAPER INC., as
Administrative Agent
By: ______________________________________
Name:
Title:
SCHEDULE 3.4
CONSENTS, AUTHORIZATIONS, FILINGS AND NOTICES
SCHEDULE 3.14
SUBSIDIARIES
SCHEDULE 3.18-1
UCC FILING JURISDICTIONS
Loan Party Filing Office
[Borrower to list name of each Loan Party which is a party to
any Security Document and each filing office in which a UCC financing statement
must be filed in respect of such Loan Party and its collateral]
SCHEDULE 3.18-2
UCC FINANCING STATEMENTS TO BE TERMINATED
SCHEDULE 6.2(d)
EXISTING INDEBTEDNESS
SCHEDULE 6.3(f)
EXISTING LIENS