Exhibit 10.4
CREDIT AGREEMENT
between
ALLEGHANY CORPORATION,
as Borrower
THE LENDERS NAMED HEREIN,
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
U.S. BANK NATIONAL ASSOCIATION,
as Syndication Agent,
and
LASALLE BANK NATIONAL ASSOCIATION
and
HSBC BANK USA, NATIONAL ASSOCIATION,
as Documentation Agents
$200,000,000 Senior Credit Facility
Lead Arranger and Sole Book-Runner:
WACHOVIA CAPITAL MARKETS, LLC
Dated as of July 28, 2004
TABLE OF CONTENTS
Page
RECITALS.......................................................... 1
ARTICLE I
DEFINITIONS
1.1 Defined Terms............................................... 1
1.2 Accounting Terms............................................ 17
1.3 Other Terms; Construction................................... 18
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
2.1 Commitments................................................. 18
2.2 Borrowings.................................................. 18
2.3 Disbursements; Funding Reliance; Domicile of Loans.......... 19
2.4 Evidence of Debt; Notes..................................... 20
2.5 Termination and Reduction of Commitments.................... 21
2.6 Mandatory Payments and Prepayments.......................... 21
2.7 Voluntary Prepayments....................................... 21
2.8 Interest.................................................... 22
2.9 Fees........................................................ 24
2.10 Interest Periods............................................ 24
2.11 Conversions and Continuations............................... 25
2.12 Method of Payments; Computations............................ 26
2.13 Recovery of Payments........................................ 27
2.14 Use of Proceeds............................................. 27
2.15 Pro Rata Treatment.......................................... 27
2.16 Increased Costs; Change in Circumstances; Illegality; etc... 28
2.17 Taxes....................................................... 30
2.18 Compensation................................................ 32
2.19 Replacement of Lenders; Mitigation of Costs................. 33
2.20 Extension of Maturity Date.................................. 34
ARTICLE III
CONDITIONS PRECEDENT
3.1 Conditions Precedent to Closing............................. 35
3.2 Conditions Precedent to all Borrowings...................... 37
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Organization, Standing, Etc................................. 37
4.2 Authorization and Validity.................................. 38
4.3 No Conflict; No Default..................................... 38
4.4 Government Consent.......................................... 38
4.5 Financial Statements and Condition.......................... 38
4.6 Litigation.................................................. 39
4.7 Compliance.................................................. 39
4.8 Environmental Health and Safety Laws........................ 39
4.9 ERISA....................................................... 39
4.10 Federal Reserve Regulations................................. 40
4.11 Title to Property; Leases; Liens; Subordination............. 40
4.12 Taxes....................................................... 40
4.13 Trademarks, Patents......................................... 40
4.14 Force Majeure............................................... 40
4.15 Investment Company Act...................................... 41
4.16 Public Utility Holding Company Act.......................... 41
4.17 Retirement Benefits......................................... 41
4.18 Full Disclosure............................................. 41
4.19 Subsidiaries................................................ 41
4.20 Certain Matters............................................. 41
ARTICLE V
AFFIRMATIVE COVENANTS
5.1 Financial Statements and Reports............................ 42
5.2 Continued Existence......................................... 44
5.3 Insurance................................................... 44
5.4 Payment of Taxes and Claims................................. 44
5.5 Inspection.................................................. 45
5.6 Maintenance of Properties................................... 45
5.7 Books and Records........................................... 45
5.8 Compliance.................................................. 45
5.9 PATRIOT Act Compliance...................................... 45
5.10 Notice of Litigation........................................ 45
5.11 ERISA....................................................... 46
5.12 Environmental Matters; Reporting............................ 46
ARTICLE VI
FINANCIAL COVENANTS
6.1 Maximum Total Indebtedness to Total Capitalization.......... 47
6.2 Minimum Debt Coverage Ratio................................. 47
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6.3 Required Liquid Assets...................................... 47
6.4 Minimum Tangible Net Worth.................................. 47
ARTICLE VII
NEGATIVE COVENANTS
7.1 Merger...................................................... 47
7.2 Disposition of Assets....................................... 48
7.3 Plans....................................................... 49
7.4 Negative Pledges............................................ 49
7.5 Restricted Payments......................................... 49
7.6 Transactions with Affiliates................................ 49
7.7 Accounting Changes.......................................... 49
7.8 Subordinated Indebtedness................................... 49
7.9 Indebtedness................................................ 50
7.10 Liens....................................................... 50
7.11 Loan Proceeds............................................... 51
7.12 Rental Obligations.......................................... 51
7.13 Mellon Credit Agreement..................................... 52
ARTICLE VIII
EVENTS OF DEFAULT
8.1 Events of Default........................................... 52
8.2 Remedies: Termination of Commitments, Acceleration, etc..... 54
8.3 Remedies: Set-Off........................................... 54
ARTICLE IX
THE ADMINISTRATIVE AGENT
9.1 Appointment................................................. 54
9.2 Nature of Duties............................................ 55
9.3 Exculpatory Provisions...................................... 55
9.4 Reliance by Administrative Agent............................ 55
9.5 Non-Reliance on Administrative Agent and Other Lenders...... 56
9.6 Notice of Default........................................... 56
9.7 Indemnification............................................. 57
9.8 The Administrative Agent in its Individual Capacity......... 57
9.9 Successor Agent............................................. 58
9.10 Other Agents, Managers...................................... 58
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ARTICLE X
MISCELLANEOUS
10.1 Fees and Expenses........................................... 59
10.2 Indemnification............................................. 59
10.3 Governing Law; Consent to Jurisdiction...................... 60
10.4 Waiver of Trial by Jury..................................... 61
10.5 Notices..................................................... 61
10.6 Amendments Waivers, Etc..................................... 62
10.7 Assignments, Participations................................. 62
10.8 No Waiver................................................... 65
10.9 Successors and Assigns...................................... 65
10.10 Survival.................................................... 65
10.11 Severability................................................ 65
10.12 Construction................................................ 65
10.13 Confidentiality............................................. 66
10.14 Counterparts; Effectiveness................................. 66
10.15 Disclosure of Information................................... 66
10.16 Nonreliance................................................. 66
10.17 Entire Agreement............................................ 66
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EXHIBITS
Exhibit A Form of Note
Exhibit B-1 Form of Notice of Borrowing
Exhibit B-2 Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Acceptance
SCHEDULES
Schedule 1.1 Commitments and Notice Addresses
Schedule 4.8 Environmental Health and Safety Laws
Schedule 4.9 ERISA
Schedule 4.19 Subsidiaries
Schedule 7.9 Indebtedness
Schedule 7.10 Liens
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of the 28th day of July, 2004, is made
among ALLEGHANY CORPORATION, a Delaware corporation (the "Borrower"), the
Lenders (as hereinafter defined), WACHOVIA BANK, NATIONAL ASSOCIATION, as
Administrative Agent for the Lenders, U.S. BANK NATIONAL ASSOCIATION, as
Syndication Agent for the Lenders, and LASALLE BANK NATIONAL ASSOCIATION and
HSBC BANK USA, NATIONAL ASSOCIATION, as Documentation Agents for the Lenders.
RECITALS
A. The Borrower has requested that the Lenders make available to the
Borrower a revolving credit facility in the aggregate principal amount of
$200,000,000. The Borrower will use the proceeds of this facility (i) to
refinance certain existing indebtedness, (ii) to pay certain transaction fees
and expenses in connection herewith and therewith, and (iii) for working capital
and general corporate purposes (including permitted acquisitions of the
Borrower), all as more fully described herein.
B. The Lenders are willing to make available to the Borrower the revolving
credit facility described above subject to and on the terms and conditions set
forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual provisions, covenants and
agreements herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. For purposes of this Agreement, in addition to the
terms defined elsewhere herein, the following terms shall have the meanings set
forth below (such meanings to be equally applicable to the singular and plural
forms thereof):
"Account Designation Letter" shall mean a letter from the Borrower to the
Administrative Agent, duly completed and signed by an Authorized Officer and in
form and substance reasonably satisfactory to the Administrative Agent, listing
any one or more accounts to which the Borrower may from time to time request the
Administrative Agent to forward the proceeds of any Loans made hereunder.
"Adjusted LIBOR Rate" shall mean, at any time with respect to any LIBOR
Loan, a rate per annum equal to the LIBOR Rate as in effect at such time plus
the Applicable Percentage for LIBOR Loans as in effect at such time.
"Administrative Agent" shall mean Wachovia, in its capacity as
Administrative Agent appointed under ARTICLE IX, and its successors and
permitted assigns in such capacity.
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"Affiliate" shall mean, as to any Person, each other Person that directly,
or indirectly through one or more intermediaries, owns or controls, is
controlled by or under common control with, such Person. For purposes of this
definition, with respect to any Person "control" shall mean the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agreement" shall mean this Credit Agreement, as amended, restated,
modified or supplemented from time to time in accordance with its terms.
"AIHL" shall mean Alleghany Insurance Holdings LLC, a Delaware limited
liability company and a Wholly Owned Subsidiary of the Borrower.
"Alleghany Funding" shall mean Alleghany Funding Corporation, a Delaware
corporation and a Wholly Owned Subsidiary of the Borrower.
"API" shall mean Alleghany Properties, Inc., a Delaware corporation and a
Wholly Owned Subsidiary of the Borrower.
"API Agreement" means the Note Purchase Agreement by and among the
Borrower, API and the Purchasers signatories thereto relating to the API Notes,
whereby the Borrower has agreed to purchase from API certain real properties
owned by API to the extent required to permit API to make required payments on
the API Notes, together with all documents related thereto, as such agreement or
other documents may be amended, restated, supplemented or otherwise modified
from time to time.
"API Notes" means the $40,000,000 principal amount of 6.83% Senior Notes
due December 11, 2004 issued by API pursuant to the API Agreement, of which
$8,000,000 principal amount are outstanding as of the date of this Agreement.
"Applicable Percentage" shall mean, at any time from and after the Closing
Date, the applicable percentage (a) to be added to the LIBOR Rate pursuant to
SECTION 2.8 for purposes of determining the Adjusted LIBOR Rate, (b) to be used
in calculating the commitment fee payable pursuant to SECTION 2.9(b), and (c) to
be used in calculating the utilization fee payable pursuant to SECTION 2.9(d),
in each case as determined under the following matrix with reference to the
Borrower's senior, non-credit enhanced, long-term unsecured debt rating by
either or both of Xxxxx'x or Standard & Poor's (in each case based upon the
higher of the two ratings):
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Standard & Applicable Margin
Poor's / Xxxxx' s Percentage for Utilization Fee
Level Rating Commitment Fee LIBOR Loans Usage > 33%
----- ----------------- -------------- ----------------- ---------------
I A/A2
or higher 0.250% 0.500% 0.00%
II A-/A3 0.250% 0.550% 0.200%
III BBB+/Baa1 0.250% 0.675% 0.325%
IV BBB/Baa2 0.250% 0.800% 0.450%
V BBB-/Baa3 0.250% 0.925% 0.575%
VI BB+/Ba1 or lower 0.375% 1.300% 0.700%
Notwithstanding anything set forth herein to the contrary, if at any time the
difference between the senior unsecured debt ratings by Xxxxx'x and Standard &
Poor's is more than one rating grade, then for purposes of determining the
applicable level set forth above, the rating one level below the higher rating
will apply.
On each Adjustment Date (as hereinafter defined), the Applicable
Percentage for all Loans and the commitment fee and utilization fee payable
pursuant to SECTION 2.9(b) and (d) respectively shall be adjusted effective as
of such date in accordance with the above matrix. For purposes of this
definition, "Adjustment Date" shall mean the date which is ten (10) Business
Days after the date on which Xxxxx'x or Standard & Poor's, as the case may be,
first announces publicly any change in its rating with respect to the Borrower's
senior unsecured debt.
"Approved Fund" shall mean any Fund that is administered or managed by (i)
a Lender, (ii) an Affiliate of a Lender, or (iii) a Person that administers or
manages a Lender or an Affiliate of such Person.
"Arranger" shall mean Wachovia Capital Markets, LLC.
"Assignee" shall have the meaning given to such term in SECTION 10.7(a).
"Assignment and Acceptance" shall mean an Assignment and Acceptance in
substantially the form of EXHIBIT D.
"Authorized Officer" shall mean, with respect to any action specified
herein, any officer of the Borrower duly authorized by resolution of the board
of directors of the Borrower to take such action on its behalf, and whose
signature and incumbency shall have been certified to the Administrative Agent
by the secretary or an assistant secretary of the Borrower.
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"Available Dividend Amount" shall mean, as of any date of determination,
the aggregate maximum amount of dividends that could be paid by each Qualified
Insurance Subsidiary in compliance with restrictions on payments of dividends
imposed by the Insurance Regulatory Authority of its jurisdiction of domicile
under all applicable Requirements of Law (without the necessity of any consent,
approval or other action of such Insurance Regulatory Authority involving the
granting of permission or the exercise of discretion by such Insurance
Regulatory Authority), and after giving effect to any applicable contractual
restrictions on the ability of any such Qualified Insurance Subsidiary to pay
dividends.
"Bankruptcy Code" shall mean 11 U.S.C. Sections 101 et seq., as amended
from time to time, and any successor statute.
"Bankruptcy Event" shall mean the occurrence of an Event of Default
pursuant to SECTIONS 8.1(e), 8.1(f) or 8.1(g).
"Base Rate" shall mean the higher of (i) the per annum interest rate
publicly announced from time to time by Wachovia in Charlotte, North Carolina,
to be its prime commercial lending rate (which may not necessarily be its best
lending rate), as adjusted to conform to changes as of the opening of business
on the date of any such change in such prime commercial lending rate, and (ii)
the Federal Funds Rate plus 0.5% per annum, as adjusted to conform to changes as
of the opening of business on the date of any such change in the Federal Funds
Rate.
"Base Rate Loan" shall mean, at any time, any Loan that bears interest at
such time at the Base Rate.
"Borrower" shall have the meaning given to it in the introductory
paragraph hereof.
"Borrowing" shall mean the incurrence by the Borrower (including as a
result of conversions and continuations of outstanding Loans pursuant to SECTION
2.11) on a single date of a group of Loans of a single Type and, in the case of
LIBOR Loans, as to which a single Interest Period is in effect.
"Borrowing Date" shall mean, with respect to any Borrowing, the date upon
which such Borrowing is made.
"Business Day" shall mean (i) any day other than a Saturday, a Sunday, or
a day on which commercial banks in Charlotte, North Carolina or New York, New
York are authorized by law or proclamation to be closed and (ii) in respect of
any determination relevant to a LIBOR Loan, any such day that is also a day on
which tradings are conducted in the London interbank Eurodollar market.
"Capital Lease" shall mean, with respect to any Person, any lease of
property (whether real, personal or mixed) by such Person as lessee with respect
to which at least a portion of the rent or other amounts thereon constitute
Capitalized Lease Obligations.
"Capitalized Lease Obligations" shall mean, with respect to any Person,
the obligations of such Person to pay rent or other amounts under any lease of
(or other agreement conveying the right to use) property (whether real, personal
or mixed) which obligations are required to be
4
classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP (including Statement of Financial Accounting Standards No. 13
of the Financial Accounting Standards Board), and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP (including such Statement No. 13).
"Capital Stock" shall mean (i) with respect to any Person that is a
corporation, any and all shares, interests or equivalents in capital stock
(whether voting or nonvoting, and whether common or preferred) of such
corporation, and (ii) with respect to any Person that is not a corporation, any
and all partnership, membership, limited liability company or other equity
interests of such Person; and in each case, any and all warrants, rights or
options to purchase any of the foregoing.
"Capitol Indemnity" shall mean Capitol Indemnity Corporation, a Wisconsin
corporation and a Wholly Owned Subsidiary of Capitol Transamerica.
"Capitol Specialty" shall mean Capitol Specialty Insurance Corporation, a
Wisconsin corporation and a Wholly Owned Subsidiary of Capitol Indemnity.
"Capitol Transamerica" shall mean Capitol Transamerica Corporation, a
Wisconsin corporation and a Wholly Owned Subsidiary of AIHL.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. Section 9601 et seq., as amended from time to time.
"Change of Control" shall mean, the occurrence, after the Closing Date, of
any of the following: (i) any Person or group (within the meaning of Rule 13d-5
of the Securities and Exchange Commission as in effect on the date hereof) other
than the current principal stockholders of the Borrower identified in the
Borrower's proxy statement dated March 8, 2004, or any of their respective
children, spouses or issue thereof or any entity controlled or substantially all
of whose equity is beneficially owned by one or more of them as of the date of
this Agreement, shall own directly or indirectly, beneficially or of record,
shares representing twenty-five percent (25%) or more of the aggregate ordinary
voting power represented by the issued and outstanding securities of the
Borrower; (ii) a majority of the seats (other than vacant seats) on the Board of
Directors of the Borrower shall at any time be occupied by persons who were
neither nominated or appointed by a majority of the directors of the Borrower
who were in office as of the date of this Agreement nor who were nominated or
appointed by directors so nominated; or (iii) any Person or group (other than
the current principal stockholders of the Borrower identified in the Borrower's
proxy statement dated March 8, 2004, or any of their respective children,
spouses or issue thereof or any entity controlled or substantially all of whose
equity is beneficially owned by one or more of them as of the date of this
Agreement) shall otherwise directly or indirectly [possess the power to direct
or cause the direction of the management and policies of the Borrower.]
"Closing Date" shall mean the date upon which each of the conditions set
forth in SECTIONS 3.1 and 3.2 shall have been satisfied or waived in accordance
with the terms of this Agreement.
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"Commitment" shall mean, with respect to any Lender at any time, the
commitment of such Lender to make Loans in an aggregate principal amount at any
time outstanding up to the amount set forth opposite such Lender's name on
SCHEDULE 1.1 under the caption "Commitment" or, if such Lender has entered into
one or more Assignment and Acceptances, the amount set forth for such Lender at
such time in the Register maintained by the Administrative Agent pursuant to
SECTION 10.7(b) as such Lender's "Commitment," as such amount may be reduced at
or prior to such time pursuant to the terms hereof.
"Compliance Certificate" shall mean a fully completed and duly executed
certificate in the form of EXHIBIT C, together with a Covenant Compliance
Worksheet.
"Contingent Obligation" shall mean, with respect to any Person, at the
time of any determination, without duplication, any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in any
manner, whether directly or otherwise, including without limitation any
agreement: (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or to purchase (or to advance or supply funds
for the purchase of) any direct or indirect security therefor; (ii) to purchase
property, securities or services for the purpose of assuring the holder of such
Indebtedness of the payment of such Indebtedness; (iii) to maintain working
capital, equity capital or other financial statement condition of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or
otherwise to protect the holder thereof against loss in respect thereof; or (iv)
entered into for the purpose of assuring in any manner the holder of such
Indebtedness of the payment of such Indebtedness or to protect the holder
against loss in respect thereof; provided, that the term "Contingent Obligation"
shall not include endorsements for collection or deposit, in each case in the
ordinary course of business.
"Control" shall mean for purposes of SECTION 7.1, with respect to any
Person, the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, through the ability
to exercise voting power.
"Covenant Compliance Worksheet" shall mean a fully completed worksheet in
the form of Attachment A to EXHIBIT C.
"Credit Documents" shall mean this Agreement, the Notes, the Fee Letter
and all other agreements, instruments, documents and certificates now or
hereafter executed and delivered to the Administrative Agent or any Lender by or
on behalf of the Borrower or any of its Subsidiaries with respect to this
Agreement and the transactions contemplated hereby, in each case as amended,
restated, modified or supplemented from time to time, but specifically excluding
any Hedge Agreement to which the Borrower and any Lender or Affiliate of any
Lender are parties.
"Current Liabilities" shall mean, as of any date, the consolidated current
liabilities of the Borrower, determined in accordance with GAAP.
"Darwin Group" shall mean Darwin Group, Inc., a Delaware corporation and a
Wholly Owned Subsidiary of AIHL.
6
"Darwin National" shall mean Darwin National Assurance Company, a Delaware
corporation and a Wholly Owned Subsidiary of Darwin Group.
"Default" shall mean any event or condition that, with the passage of time
or giving of notice, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender that (i) has refused to fund, or
otherwise defaulted in the funding of, its ratable share of any Borrowing
requested and permitted to be made hereunder, (ii) has failed to pay to the
Administrative Agent or any Lender when due an amount owed by such Lender
pursuant to the terms of this Credit Agreement, unless such amount is subject to
a good faith dispute, or (c) has been deemed insolvent or has become subject to
a bankruptcy or insolvency proceeding or to a receiver, trustee or similar
official, and such refusal has not been withdrawn or such default has not been
cured within three (3) Business Days.
"Disqualified Capital Stock" shall mean, with respect to any Person, any
Capital Stock of such Person that, by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable), or upon the
happening of any event or otherwise, (i) matures or is mandatorily redeemable or
subject to any mandatory repurchase requirement, pursuant to a sinking fund
obligation or otherwise, (ii) is redeemable or subject to any mandatory
repurchase requirement at the sole option of the holder thereof, or (iii) is
convertible into or exchangeable for (whether at the option of the issuer or the
holder thereof) (a) debt securities or (b) any Capital Stock referred to in (i)
or (ii) above, in each case under (i), (ii) or (iii) above at any time on or
prior to the first anniversary of the Maturity Date; provided, however, that
only the portion of Capital Stock that so matures or is mandatorily redeemable,
is so redeemable at the option of the holder thereof, or is so convertible or
exchangeable on or prior to such date shall be deemed to be Disqualified Capital
Stock.
"Dollars" or "$" shall mean dollars of the United States of America.
"Eligible Assets" shall mean, as of any date of determination, (i) the sum
of (x) Unrestricted Liquid Assets of the Borrower, (y) the aggregate amount of
Unrestricted Liquid Assets of the Borrower's Subsidiaries that are not Insurance
Subsidiaries that could be transferred or distributed to the Borrower, in the
form of a dividend or otherwise, after giving effect to all applicable legal,
regulatory and contractual restrictions, and (z) the aggregate Available
Dividend Amount for all Qualified Insurance Subsidiaries, divided by (ii) 1.1.
"Environmental Claims" shall mean any liability, contingent or otherwise
(including any liability for damages, natural resource damage, costs of
environmental remediation, administrative oversight costs, fines, penalties or
indemnities), of any Person directly or indirectly resulting from or based upon
(i) violation of any Environmental Law, (ii) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Substances,
(iii) exposure to any Hazardous Substances, (iv) the release or threatened
release of any Hazardous Substances into the environment or (v) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed
or imposed with respect to any of the foregoing.
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"Environmental Laws" shall mean any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals, rules of
common law and orders of courts or Governmental Authorities, relating to the
protection of human health or occupational safety with respect to exposure to
Hazardous Substances or the environment, now or hereafter in effect and in each
case as amended from time to time, including, without limitation, requirements
pertaining to the manufacture, processing, distribution, use, treatment,
storage, disposal, transportation, handling, reporting, licensing, permitting,
investigation or remediation of Hazardous Substances.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"ERISA Affiliate" shall mean any Person (including any trade or business,
whether or not incorporated) that would be deemed to be under "common control"
with, or a member of the same "controlled group" as, the Borrower or any of its
Subsidiaries, within the meaning of Sections 414(b), (c), (m) or (o) of the
Internal Revenue Code or Section 4001 of ERISA.
"ERISA Event" shall mean any of the following with respect to a Plan or
Multiemployer Plan, as applicable: (i) a Reportable Event, (ii) a complete or
partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan that results in liability under Section 4201 or 4204 of ERISA, or the
receipt by the Borrower or any ERISA Affiliate of notice from a Multiemployer
Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245
of ERISA or that it intends to terminate or has terminated under Section 4041A
of ERISA, (iii) the distribution by the Borrower or any ERISA Affiliate under
Section 4041 or 4041A of ERISA of a notice of intent to terminate any Plan or
the taking of any action to terminate any Plan, (iv) the commencement of
proceedings by the PBGC under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan, or the receipt by the
Borrower or any ERISA Affiliate of a notice from any Multiemployer Plan that
such action has been taken by the PBGC with respect to such Multiemployer Plan,
(v) the institution of a proceeding by any fiduciary of any Multiemployer Plan
against the Borrower or any ERISA Affiliate to enforce Section 515 of ERISA,
which is not dismissed within thirty (30) days, (vi) the imposition upon the
Borrower or any ERISA Affiliate of any liability under Title IV of ERISA, other
than for PBGC premiums due but not delinquent under Section 4007 of ERISA, or
the imposition or threatened imposition of any Lien upon any assets of the
Borrower or any ERISA Affiliate as a result of any alleged failure to comply
with the Internal Revenue Code or ERISA in respect of any Plan, (vii) the
engaging in, or otherwise incurring liability as a result of, a nonexempt
Prohibited Transaction by the Borrower or any ERISA Affiliate, or by any
fiduciary of any Plan for which the Borrower or any of its ERISA Affiliates may
be directly or indirectly liable, (viii) the occurrence with respect to any Plan
of any "accumulated funding deficiency" (within the meaning of Section 302 of
ERISA and Section 412 of the Internal Revenue Code), whether or not waived or
(ix) the adoption of an amendment to any Plan that, pursuant to Section
401(a)(29) of the Internal Revenue Code or Section 307 of ERISA, would result in
the loss of tax-exempt status of the trust of which such Plan is a part if the
Borrower or an ERISA Affiliate fails to timely provide security to such Plan in
accordance with the provisions of such sections.
"Event of Default" shall have the meaning given to such term in SECTION
8.1.
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute, and all rules and regulations from
time to time promulgated thereunder.
"Federal Funds Rate" shall mean, for any period, a fluctuating per annum
interest rate (rounded upwards, if necessary, to the nearest 1/100 of one
percentage point) equal for each day during such period to the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by the Administrative Agent.
"Federal Reserve Board" shall mean the Board of Governors of the Federal
Reserve System or any successor thereto.
"Fee Letter" shall mean the letter from Wachovia and the Arranger to the
Borrower, dated June 9, 2004, relating to certain fees payable by the Borrower
in respect of the transactions contemplated by this Agreement, as amended,
modified or supplemented from time to time.
"Financial Officer" shall mean, with respect to the Borrower, the Chief
Financial Officer of the Borrower or the Controller and Treasurer of the
Borrower.
"Fund" shall mean any Person (other than a natural person) that is or will
be engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"GAAP" shall mean generally accepted accounting principles in the United
States of America, as set forth in the statements, opinions and pronouncements
of the Accounting Principles Board of the American Institute of Certified Public
Accountants and the statements of and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of any date of determination (subject to the
provisions of SECTION 1.2).
"Governmental Authority" shall mean the government of the United States of
America, or any other nation, or any state or other political subdivision
thereof, and any central bank thereof, any municipal, local, city or county
government, and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"Hazardous Substances" shall mean all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law, including any hazardous substance under Section 101(14) of
CERCLA.
9
"Heads & Threads" shall mean Heads & Threads International LLC, a Delaware
limited liability company and a Wholly Owned Subsidiary of the Borrower.
"Hedge Agreement" shall mean any interest or foreign currency rate swap,
cap, collar, option, hedge, forward rate or other similar agreement or
arrangement designed to protect against fluctuations in interest rates or
currency exchange rates.
"Indebtedness" shall mean, with respect to any Person at the time of
determination (without duplication), (i) all indebtedness and obligations of
such Person for borrowed money or in respect of loans or advances of any kind,
(ii) all obligations of such Person evidenced by notes, bonds, debentures or
similar instruments, (iii) all reimbursement obligations of such Person with
respect to surety bonds, letters of credit and bankers' acceptances (in each
case, whether or not drawn or matured and in the stated amount thereof), (iv)
all obligations of such Person to pay the deferred purchase price of property or
services (it being understood that the "deferred purchase price" in connection
with any purchase of property or assets shall include only that portion of the
purchase price which shall be deferred beyond the date on which the purchase is
actually consummated), (v) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person, (vi) all Capitalized Lease Obligations, (vii) the
principal balance outstanding and owing by such Person under any synthetic
lease, tax retention operating lease or similar off-balance sheet financing
product, (viii) all Disqualified Capital Stock issued by such Person, with the
amount of Indebtedness represented by such Disqualified Capital Stock being
equal to the greater of its voluntary or involuntary liquidation preference and
its maximum fixed repurchase price, but excluding accrued dividends, if any (for
purposes hereof, the "maximum fixed repurchase price" of any Disqualified
Capital Stock that does not have a fixed repurchase price shall be calculated in
accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Agreement, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the board of directors or other governing body of the issuer of such
Disqualified Capital Stock), (ix) the net termination obligations of such Person
under any Hedge Agreements, calculated as of any date as if such agreement or
arrangement were terminated as of such date, (x) all Contingent Obligations of
such Person and (xi) all indebtedness of the types referred to in clauses (i)
through (x) above (A) of any partnership or unincorporated joint venture in
which such Person is a general partner or joint venturer to the extent such
Person is liable therefor or (B) secured by any Lien on any property or asset
owned or held by such Person regardless of whether or not the indebtedness
secured thereby shall have been incurred or assumed by such Person or is
nonrecourse to the credit of such Person, the amount thereof being equal to the
value of the property or assets subject to such Lien.
"Indemnified Cost" has the meaning given to it in SECTION 10.2.
"Indemnified Person" has the meaning given to it in SECTION 10.2.
"Insurance Regulatory Authority" shall mean, with respect to any Insurance
Subsidiary, (i) the insurance department or similar Governmental Authority
charged with regulating insurance companies in its jurisdiction of domicile and
(ii) each insurance department or similar
10
Governmental Authority in a jurisdiction other than its jurisdiction of domicile
in which such Insurance Subsidiary conducts business or is licensed to conduct
business to the extent that such insurance department or similar Governmental
Authority has regulatory authority over such Insurance Subsidiary.
"Insurance Subsidiary" shall mean Capitol Indemnity, Capitol Specialty,
Darwin National, Platte River, RSUI Indemnity, Landmark Insurance and any other
Subsidiary of the Borrower the ability of which to pay dividends is regulated by
an Insurance Regulatory Authority.
"Interest Period" shall have the meaning given to such term in SECTION
2.10.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"Landmark Insurance" shall mean Landmark American Insurance Company, an
Oklahoma corporation and a Wholly Owned Subsidiary of RSUI Indemnity.
"Lender" shall mean each Person signatory hereto as a "Lender" and each
other Person that becomes a "Lender" hereunder pursuant to SECTION 10.7, and
their respective successors and assigns.
"Lending Office" shall mean, with respect to any Lender, the office of
such Lender designated as its "Lending Office" on SCHEDULE 1.1 or in connection
with an Assignment and Acceptance, or such other office as may be otherwise
designated in writing from time to time by such Lender to the Borrower and the
Administrative Agent. A Lender may designate separate Lending Offices as
provided in the foregoing sentence for the purposes of making or maintaining
different Types of Loans, and, with respect to LIBOR Loans, such office may be a
domestic or foreign branch or Affiliate of such Lender.
"LIBOR Loan" shall mean, at any time, any Loan that bears interest at such
time at the Adjusted LIBOR Rate.
"LIBOR Rate" shall mean, with respect to each LIBOR Loan comprising part
of the same Borrowing for any Interest Period, an interest rate per annum
obtained by dividing (i)(y) the rate of interest (rounded upward, if necessary,
to the nearest 1/16 of one percentage point) appearing on Telerate Page 3750 (or
any successor page) or (z) if no such rate is available, the rate of interest
determined by the Administrative Agent to be the rate or the arithmetic mean of
rates (rounded upward, if necessary, to the nearest 1/16 of one percentage
point) at which Dollar deposits in immediately available funds are offered by
Wachovia to first-tier banks in the London interbank Eurodollar market, in each
case under (y) and (z) above at approximately 11:00 a.m., London time, two (2)
Business Days prior to the first day of such Interest Period for a period
substantially equal to such Interest Period and in an amount substantially equal
to the amount of Wachovia's LIBOR Loan comprising part of such Borrowing, by
(ii) the amount equal to 1.00 minus the Reserve Requirement (expressed as a
decimal) for such Interest Period.
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"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
security interest, lien (statutory or otherwise), preference, priority, charge
or other encumbrance of any nature, whether voluntary or involuntary, including,
without limitation, the interest of any vendor under any conditional sale
agreement or title retention agreement, and the interest of any lessor under any
Capital Lease, or any other arrangement having substantially the same effect as
any of the foregoing.
"Loans" shall have the meaning given to such term in SECTION 2.1.
"Margin Stock" shall have the meaning given to such term in Regulation U.
"Material Adverse Effect" shall mean (i) a material adverse effect upon
the condition (financial or otherwise), operations, business or properties of
the Borrower and its Subsidiaries, taken as a whole or (ii) a material
impairment of the ability of the Borrower to perform its obligations under this
Agreement or any of the other Credit Documents.
"Material Insurance Subsidiary" shall mean any Insurance Subsidiary that
is a Material Subsidiary.
"Material Subsidiary" shall mean, at any time, any Subsidiary of the
Borrower that as of such time meets the definition of "significant subsidiary"
contained in Regulation S-X of the Securities and Exchange Commission.
"Maturity Date" shall mean the third anniversary of the Closing Date, or
such later date to which the Maturity Date shall have been extended pursuant to
SECTION 2.20.
"Mellon Credit Agreement" shall mean the agreement, in the form furnished
to the Administrative Agent prior to the Closing Date, by and between AIHL, as
Account Party, the Borrower, as Guarantor, and Mellon Bank, N.A. (in such
capacity, the "Issuing Bank"), dated November 26, 2001, as amended from time to
time in accordance with the terms of this Agreement, pursuant to which the
Issuing Bank may issue letters of credit in aggregate amounts not to exceed
$10,000,000.
"Mineral Holdings" shall mean Mineral Holdings Inc., a Delaware
corporation and a Subsidiary of the Borrower.
"Minimum Debt Coverage Ratio" shall mean, as of any date of determination,
the ratio of (i) Eligible Assets to (ii) the sum of (w) the aggregate principal
balance of the Loans then outstanding, plus (x) the amount of any accrued and
unpaid interest on the Loans then outstanding plus (y) the amount of any fees
then due or payable under this Agreement or any of the other Credit Documents
plus (z) without duplication, all other Indebtedness of the Borrower.
"Moody's" shall mean Xxxxx'x Investors Service, Inc., its successors and
assigns.
"Multiemployer Plan" shall mean any "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate makes, is making or is obligated to make contributions or has made or
been obligated to make contributions.
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"NAIC" shall mean the National Association of Insurance Commissioners and
any successor thereto.
"Net Worth" shall mean, as of any date of determination, the amount that
would be shown as common stockholders' equity on the balance sheet of the
Borrower in accordance with GAAP as of such date.
"Non-U.S. Lender" shall have the meaning given to such term in SECTION
2.17(d).
"Notes" shall mean the promissory notes of the Borrower in the form of
EXHIBIT A, together with any amendments, modifications and supplements thereto,
substitutions therefor and restatements thereof.
"Notice of Borrowing" shall have the meaning given to such term in SECTION
2.2(b).
"Notice of Conversion/Continuation" shall have the meaning given to such
term in SECTION 2.11(b).
"Obligations" shall mean the Borrower's obligations in respect of all
principal of and interest (including, to the greatest extent permitted by law,
post-petition interest) on the Loans, and all fees, expenses, indemnities and
other obligations owing, due or payable at any time by the Borrower to the
Administrative Agent, any Lender or any other Person entitled thereto, under
this Agreement or any of the other Credit Documents, in each case whether direct
or indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, and whether existing by
contract, operation of law or otherwise.
"Participant" shall have the meaning given to such term in SECTION
10.7(d).
"PATRIOT Act" shall mean the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
PATRIOT Act of 2001), as amended from time to time, and any successor statute,
and all rules and regulations from time to time promulgated thereunder.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.
"Permitted Intercompany Indebtedness" shall mean Indebtedness of the
Borrower: (i) under the API Agreement in respect of the API Notes, not to exceed
$8,000,000 in aggregate principal amount of such Indebtedness; (ii) to Alleghany
Funding, not to exceed $19,200,000 in aggregate principal amount of such
Indebtedness; and (iii) in addition to the foregoing, to any one or more of its
Subsidiaries, not to exceed $20,000,000 in aggregate principal amount of such
Indebtedness as to all such Subsidiaries taken as a whole at any time
outstanding, including, in each case under clauses (i) and (ii) above, any
extension or refinancing thereof, but not including any increase in the
principal amount thereof.
"Person" shall mean any corporation, association, joint venture,
partnership, limited liability company, organization, business, individual,
trust, government or agency or political subdivision thereof or any other legal
entity.
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"Plan" shall mean any "employee pension benefit plan" within the meaning
of Section 3(2) of ERISA that is subject to the provisions of Title IV of ERISA
(other than a Multiemployer Plan) and to which the Borrower or any ERISA
Affiliate may have any liability.
"Platte River" shall mean Platte River Insurance Company, a Nebraska
Insurance Company and a Wholly Owned Subsidiary of AIHL.
"Prior Senior Credit Facility" shall mean the Three-Year Revolving Credit
Agreement, dated June 14, 2002, between the Borrower, the lenders party thereto
and U.S. Bank National Association, as administrative agent for such lenders, as
amended, restated, modified or supplemented from time to time on or prior to the
date of this Agreement.
"Prohibited Transaction" shall mean any transaction described in (i)
Section 406 of ERISA that is not exempt by reason of Section 408 of ERISA or by
reason of a Department of Labor prohibited transaction individual or class
exemption or (ii) Section 4975(c) of the Internal Revenue Code that is not
exempt by reason of Section 4975 (c)(2) or 4975(d) of the Internal Revenue Code.
"Qualified Insurance Subsidiary" shall mean, as of any date of
determination, those Insurance Subsidiaries with a financial strength rating of
at least "A-" from A.M. Best & Co.
"Register" shall have the meaning given to such term in SECTION 10.7(b).
"Regulations T, U and X" shall mean Regulations T, U and X, respectively,
of the Federal Reserve Board, and any successor regulations.
"Reportable Event" shall mean, with respect to any Plan, (i) any
"reportable event" within the meaning of Section 4043(c) of ERISA for which the
30-day notice under Section 4043(a) of ERISA has not been waived by the PBGC
(including, without limitation, any failure to meet the minimum funding standard
of, or timely make any required installment under, Section 412 of the Internal
Revenue Code or Section 302 of ERISA, regardless of the issuance of any waivers
in accordance with Section 412(d) of the Internal Revenue Code), (ii) any such
"reportable event" subject to advance notice to the PBGC under Section
4043(b)(3) of ERISA, (iii) any application for a funding waiver or an extension
of any amortization period pursuant to Section 412 of the Internal Revenue Code,
and (iv) a cessation of operations described in Section 4062(e) of ERISA.
"Required Lenders" shall mean the Lenders, other than Defaulting Lenders,
holding outstanding Loans and Unutilized Commitments (or, after the termination
of the Commitments, outstanding Loans) representing more than fifty percent
(50%) of the aggregate at such time of all outstanding Loans and Unutilized
Commitments (or, after the termination of the Commitments, the aggregate at such
time of all outstanding Loans), excluding Loans and Unutilized Commitments held
by Defaulting Lenders.
"Required Liquid Assets" shall mean an aggregate amount of Unrestricted
Liquid Assets equal to, as of any date of determination, forty percent (40%) of
the sum of (i) the aggregate principal balance of the Loans then outstanding,
plus (ii) the amount of any accrued and unpaid
14
interest on the Loans then outstanding plus (iii) the amount of any fees then
due or payable under this Agreement or any of the other Credit Documents.
"Requirement of Law" shall mean, with respect to any Person, the charter,
articles or certificate of organization or incorporation and bylaws or other
organizational or governing documents of such Person, and any statute, law,
treaty, rule, regulation, order, decree, writ, injunction or determination of
any arbitrator or 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 or otherwise pertaining to any or all of the
transactions contemplated by this Agreement and the other Credit Documents.
"Reserve Requirement" shall mean, with respect to any Interest Period, the
reserve percentage (expressed as a decimal and rounded upwards, if necessary, to
the next higher 1/100th of 1%) in effect from time to time during such Interest
Period, as provided by the Federal Reserve Board, applied for determining the
maximum reserve requirements (including, without limitation, basic,
supplemental, marginal and emergency reserves) applicable to Wachovia under
Regulation D with respect to "Eurocurrency liabilities" within the meaning of
Regulation D, or under any similar or successor regulation with respect to
Eurocurrency liabilities or Eurocurrency funding.
"Restricted Payments" shall mean, with respect to the Borrower,
collectively, all dividends or other distributions of any nature (cash,
securities other than common stock of the Borrower, assets or otherwise), and
any payment (whether in cash, securities or other property) on any class of
Capital Stock of the Borrower, whether such securities are authorized or
outstanding on the Closing Date or at any time thereafter and any redemption,
purchase, retirement, acquisition, cancellation, termination, or distribution in
respect of, any of the foregoing, whether directly or indirectly.
"RSUI Group" shall mean RSUI Group, Inc., a Delaware corporation and a
Wholly Owned Subsidiary of AIHL.
"RSUI Indemnity" shall mean RSUI Indemnity Company, a New Hampshire
corporation and a Wholly Owned Subsidiary of RSUI Group.
"SAP" shall mean the accounting procedures and practices prescribed or
permitted by the applicable Insurance Regulatory Authority or the NAIC.
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a
division of The McGraw Hill Companies, Inc. and its successors and assigns.
"Statutory Statement" shall mean a statement of the condition and affairs
of any Insurance Subsidiary, prepared in accordance with SAP, and filed with the
applicable Insurance Regulatory Authority.
"Subordinated Indebtedness" shall mean, collectively, any unsecured
Indebtedness of the Borrower that is expressly subordinated in right of payment
and performance to the Obligations in a manner and to the extent (i) that is has
been approved in writing by the Administrative Agent prior to the creation
thereof or (ii) as to any such Indebtedness of the Borrower existing on the
15
Closing Date and disclosed on SCHEDULE 7.9 that has been approved in writing by
the Administrative Agent on or prior to the Closing Date.
"Subordination Agreement" means the Subordination Agreement dated as of
March 12, 2003, by and between the Borrower and Union Bank of California, N.A.,
as administrative agent and collateral agent for the Banks (as defined therein),
relating to the liabilities and obligations of Mineral Holdings and its
subsidiaries to the Borrower.
"Subsidiary" shall mean, with respect to any Person, any corporation or
other Person of which more than fifty percent (50%) of the outstanding Capital
Stock having ordinary voting power to elect a majority of the board of
directors, board of managers or other governing body of such Person, is at the
time, directly or indirectly, owned or controlled by such Person and one or more
of its other Subsidiaries or a combination thereof (irrespective of whether, at
the time, securities of any other class or classes of any such corporation or
other Person shall or might have voting power by reason of the happening of any
contingency). When used without reference to a parent entity, the term
"Subsidiary" shall be deemed to refer to a Subsidiary of the Borrower.
"Tangible Net Worth" shall mean, as of any date of determination, the
excess of (i) the net book value of the assets of the Borrower (other than
patents, patent rights, trademarks, trade names, franchises, copyrights,
licenses, permits, goodwill and other intangible assets of the Borrower
classified as such in accordance with GAAP) after all appropriate deductions in
accordance with GAAP (including, without limitation, reserves for doubtful
receivables, obsolescence, depreciation and amortization) over (ii) the
liabilities (including tax and other proper accruals) of the Borrower, in each
case computed in accordance with GAAP.
"Taxes" shall have the meaning given to such term in SECTION 2.17(a).
"Termination Date" shall mean the earliest of (i) the Maturity Date, (ii)
the date of termination of the Commitments pursuant to SECTION 8.2 or (iii) the
date on which the Commitments are reduced to zero pursuant to SECTION 2.5.
"Total Capitalization" shall mean, as of any date of determination, (i)
the sum of (x) Net Worth as of such date, plus (y) the aggregate amount of
Indebtedness that would be included in liabilities on the balance sheet of the
Borrower in accordance with GAAP, less (ii) that portion of the Permitted
Intercompany Indebtedness that would be included in liabilities on the balance
sheet of the Borrower in accordance with GAAP.
"Total Indebtedness" shall mean, as of any date of determination, (i) the
sum of (x) the aggregate amount of Indebtedness that would be included in
liabilities on the balance sheet of the Borrower in accordance with GAAP plus
(y) any amounts guaranteed by the Borrower less (ii) the sum of (x) that portion
of the Permitted Intercompany Indebtedness that would be included in liabilities
on the balance sheet of the Borrower in accordance with GAAP plus (y) any
amounts guaranteed by the Borrower (including obligations of the Borrower under
the API Agreement in respect of the API Notes) that constitute Permitted
Intercompany Indebtedness.
"Type" shall have the meaning given to such term in SECTION 2.2(a).
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"Unrestricted Liquid Assets" shall mean assets of any Person not subject
to any assignment, right of setoff or any Lien or any restriction of a type
described in SECTION 7.4 hereof (other than any of the same in favor of the
Administrative Agent) that consist of any of the following: (i) cash and
deposits in any commercial bank organized under the laws of the United States or
any State thereof which has combined capital and surplus of at least
$250,000,000; (ii) investments in readily marketable direct obligations issued
or guaranteed by the United States or any government agency retaining a stated
or implied rating of Aaa or better; (iii) certificates of deposit or bankers'
acceptances issued by any commercial bank organized under the laws of the United
States or any State thereof which has (x) combined capital and surplus of at
least $250,000,000, and (y) a credit rating with respect to its unsecured
indebtedness of A-/A3 or better from either or both of S&P and Moody's; (iv)
commercial paper given the highest rating by a nationally recognized rating
service; (v) repurchase agreements relating to securities issued or guaranteed
as to principal and interest by the United States of America; (vi) other readily
marketable investments in debt or equity securities traded without volume or
other restrictions on a national exchange (but excluding securities traded on
the "Pink Sheets" or other similar stock quotation services); and (vii) debt
consisting of investment grade corporate bonds with a duration of not more than
one year.
"Unutilized Commitment" shall mean, with respect to any Lender at any
time, such Lender's Commitment at such time less the aggregate principal amount
of all Loans made by such Lender that are outstanding at such time.
"Verification Report" shall mean a report executed by a Financial Officer
of the Borrower reflecting the computation of the financial covenants contained
in SECTIONS 6.2 and 6.3, as of a specified date, accompanied by a custodial
statement or other report furnished to the Borrower by a third party
demonstrating that such custodian or other third party held for the account of
the Borrower or any Subsidiary that is not an Insurance Subsidiary, as of such
date, the amount of Unrestricted Liquid Assets indicated in the computation of
such financial covenants.
"Wachovia" shall mean Wachovia Bank, National Association, and its
successors and assigns.
"Wholly Owned" shall mean, with respect to any Subsidiary of any Person,
that 100% of the outstanding Capital Stock of such Subsidiary is owned, directly
or indirectly, by such Person.
"World Minerals" shall mean World Minerals, Inc., a Delaware corporation
and a Wholly Owned Subsidiary of Mineral Holdings.
1.2 Accounting Terms.
(a) Except as specifically provided otherwise in this Agreement, all
accounting terms used herein that are not specifically defined shall have the
meanings customarily given them, and all financial computations hereunder shall
be made, in accordance with GAAP or SAP as required. To the extent any change in
GAAP or SAP affects any computation or determination required to be made
pursuant to this Agreement, such computation or determination shall be made as
if such change in GAAP or SAP had not occurred unless the Borrower and the
Required
17
Lenders agree in writing on an adjustment to such computation or determination
to account for such change in GAAP. The valuation of securities for which market
quotations are readily available shall be based upon the market value of such
securities, and the valuation of other securities and assets shall be based upon
financial statement values as determined in accordance with GAAP applied on a
consistent basis.
(b) Except as specifically provided otherwise in this Agreement, all
accounting determinations made hereunder with respect to the Borrower shall be
made on an unconsolidated basis.
(c) 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.
(d) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural form of such terms.
1.3 Other Terms; Construction. In this Agreement, in the computation of a
period of time from a specified date to a later specified date, unless otherwise
stated the word "from" means "from and including" and the word "to" or "until"
each means "to but excluding". Unless otherwise specified or unless the context
otherwise requires, all references herein to sections, annexes, schedules and
exhibits are references to sections, annexes, schedules and exhibits in and to
this Agreement, and all terms defined in this Agreement shall have the defined
meanings when used in any other Credit Document or any certificate or other
document made or delivered pursuant hereto.
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
2.1 Commitments. Each Lender severally agrees, subject to and on the terms
and conditions of this Agreement, to make loans (each, a "Loan," and
collectively, the "Loans") to the Borrower, from time to time on any Business
Day during the period from and including the Closing Date to but not including
the Termination Date, in an aggregate principal amount at any time outstanding
not greater than its Commitment at such time; provided that no Borrowing of
Loans shall be made if, immediately after giving effect thereto, the aggregate
principal amount of Loans outstanding at such time would exceed the aggregate
Commitments at such time. Subject to and on the terms and conditions of this
Agreement, the Borrower may borrow, repay and reborrow Loans.
2.2 Borrowings.
(a) The Loans shall, at the option of the Borrower and subject to the
terms and conditions of this Agreement, be either Base Rate Loans or LIBOR Loans
(each, a "Type" of Loan); provided that all Loans comprising the same Borrowing
shall, unless otherwise specifically provided herein, be of the same Type.
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(b) In order to make a Borrowing (other than Borrowings involving
continuations or conversions of outstanding Loans, which shall be made pursuant
to SECTION 2.11), the Borrower will give the Administrative Agent written notice
not later than 11:00 a.m., Charlotte time, three (3) Business Days prior to each
Borrowing to be comprised of LIBOR Loans and not later than 10:00 a.m.,
Charlotte time, on the same Business Day prior to each Borrowing of Base Rate
Loans; provided, however, that requests for the Borrowing of any Loans to be
made on the Closing Date may, at the discretion of the Administrative Agent, be
given later than the times specified hereinabove. Each such notice (each, a
"Notice of Borrowing") shall be irrevocable, shall be given in the form of
EXHIBIT B-1 and shall specify (1) the aggregate principal amount and initial
Type of the Loans to be made pursuant to such Borrowing, (2) in the case of a
Borrowing of LIBOR Loans, the initial Interest Period to be applicable thereto,
and (3) the requested Borrowing Date, which shall be a Business Day. Upon its
receipt of a Notice of Borrowing, the Administrative Agent will promptly notify
each Lender of the proposed Borrowing. Notwithstanding anything to the contrary
contained herein:
(i) the aggregate principal amount of each Borrowing shall not be
less than $5,000,000 or, if greater, an integral multiple of $1,000,000 in
excess thereof (or, if less, in the amount of the aggregate Unutilized
Commitments);
(ii) if the Borrower shall have failed to designate the Type of
Loans comprising a Borrowing, the Borrower shall be deemed to have
requested a Borrowing comprised of Base Rate Loans; and
(iii) if the Borrower shall have failed to select the duration of
the Interest Period to be applicable to any Borrowing of LIBOR Loans, then
the Borrower shall be deemed to have selected an Interest Period with a
duration of one month.
(c) Not later than 1:00 p.m., Charlotte time, on the requested Borrowing
Date, each Lender will make available to the Administrative Agent at its office
referred to in SECTION 10.5 (or at such other location as the Administrative
Agent may designate) an amount, in Dollars and in immediately available funds,
equal to the amount of the Loan to be made by such Lender. To the extent the
Lenders have made such amounts available to the Administrative Agent as provided
hereinabove, the Administrative Agent will make the aggregate of such amounts
available to the Borrower in accordance with SECTION 2.3(a) and in like funds as
received by the Administrative Agent.
2.3 Disbursements; Funding Reliance; Domicile of Loans.
(a) The Borrower hereby authorizes the Administrative Agent to disburse
the proceeds of each Borrowing in accordance with the terms of any written
instructions from any Authorized Officer of the Borrower; provided that the
Administrative Agent shall not be obligated under any circumstances to forward
amounts to any account not listed in an Account Designation Letter. The Borrower
may at any time deliver to the Administrative Agent an Account Designation
Letter listing any additional accounts or deleting any accounts listed in a
previous Account Designation Letter.
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(b) Unless the Administrative Agent has received, prior to 1:00 p.m.,
Charlotte time, on the relevant Borrowing Date, written notice from a Lender
that such Lender will not make available to the Administrative Agent such
Lender's ratable portion of the relevant Borrowing, the Administrative Agent may
assume that such Lender has made such portion available to the Administrative
Agent in immediately available funds on such Borrowing Date in accordance with
the applicable provisions of SECTION 2.2, and the Administrative Agent may, in
reliance upon such assumption, but shall not be obligated to, make a
corresponding amount available to the Borrower on such Borrowing Date. If and to
the extent that such Lender shall not have made such portion available to the
Administrative Agent, and the Administrative Agent shall have made such
corresponding amount available to the Borrower, such Lender, on the one hand,
and the Borrower, on the other, severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount, together with interest
thereon for each day from the date such amount is made available to the Borrower
until the date such amount is repaid to the Administrative Agent, (i) in the
case of such Lender, at the Federal Funds Rate, and (ii) in the case of the
Borrower, at the rate of interest applicable at such time to the Type of Loans
comprising such Borrowing, as determined under the provisions of SECTION 2.8. If
such Lender shall repay to the Administrative Agent such corresponding amount,
such amount shall constitute such Lender's Loan as part of such Borrowing for
purposes of this Agreement. The failure of any Lender to make any Loan required
to be made by it as part of any Borrowing shall not relieve any other Lender of
its obligation, if any, hereunder to make its Loan as part of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Loan to be made by such other Lender as part of any Borrowing.
(c) Each Lender may, at its option, make and maintain any Loan at, to or
for the account of any of its Lending Offices; provided that any exercise of
such option shall not affect the obligation of the Borrower to repay such Loan
to or for the account of such Lender in accordance with the terms of this
Agreement.
2.4 Evidence of Debt; Notes.
(a) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to the
applicable Lending Office of such Lender resulting from each Loan made by such
Lending Office of such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lending Office of such Lender
from time to time under this Agreement..
(b) The Administrative Agent shall maintain the Register pursuant to
SECTION 10.7(b), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount of each such Loan,
the Type of each such Loan and the 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 in respect of each such Loan and
(iii) the amount of any sum received by the Administrative Agent hereunder from
the Borrower in respect of each such Loan and each Lender's share thereof.
(c) The entries made in the accounts, Register and subaccounts maintained
pursuant to SECTION 2.4(b) (and, if consistent with the entries of the
Administrative Agent, SECTION 2.4(a)) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and
20
amounts of the obligations of the Borrower therein recorded; provided, however,
that the failure of any Lender or the Administrative Agent to maintain such
account, such Register or such subaccount, as applicable, 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.
(d) The Loans made by each Lender shall, if requested by the applicable
Lender (which request shall be made to the Administrative Agent), be evidenced
by a Note appropriately completed in substantially the form of EXHIBIT A,
executed by the Borrower and payable to the order of such Lender. Each Note
shall be entitled to all of the benefits of this Agreement and the other Credit
Documents and shall be subject to the provisions hereof and thereof.
2.5 Termination and Reduction of Commitments.
(a) The Commitments shall be automatically and permanently terminated on
the Termination Date.
(b) At any time and from time to time after the date hereof, upon not less
than five (5) Business Days' prior written notice to the Administrative Agent,
the Borrower may terminate in whole or reduce in part the aggregate Unutilized
Commitments; provided that any such partial reduction shall be in an aggregate
amount of not less than $10,000,000 or, if greater, an integral multiple of
$5,000,000 in excess thereof. The amount of any termination or reduction made
under this subsection (b) may not thereafter be reinstated.
(c) Each reduction of the Commitments pursuant to this Section shall be
applied ratably among the Lenders according to their respective Commitments.
2.6 Mandatory Payments and Prepayments.
(a) Except to the extent due or paid sooner pursuant to the provisions of
this Agreement, the aggregate outstanding principal of the Loans shall be due
and payable in full on the Maturity Date.
(b) In the event that, at any time, the aggregate principal amount of
Loans outstanding at such time shall exceed the aggregate Commitments at such
time (after giving effect to any concurrent termination or reduction thereof),
the Borrower will immediately prepay the outstanding principal amount of the
Loans in the amount of such excess.
(c) Each payment or prepayment of LIBOR Loans made pursuant to the
provisions of this SECTION 2.6 on a day other than the last day of the Interest
Period applicable thereto shall be made together with all amounts required under
SECTION 2.18 to be paid as a consequence thereof.
(d) Each prepayment of the Loans made pursuant to this SECTION 2.6 shall
be applied ratably among the Lenders holding the Loans being prepaid, in
proportion to the principal amount held by each.
2.7 Voluntary Prepayments.
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(a) At any time and from time to time, the Borrower shall have the right
to prepay the Loans, in whole or in part, together with accrued interest to the
date of prepayment, without premium or penalty (except as provided in clause
(iii) below), upon written notice given to the Administrative Agent not later
than 11:00 a.m., Charlotte time, three (3) Business Days prior to each intended
prepayment of LIBOR Loans and one (1) Business Day prior to each intended
prepayment of Base Rate Loans; provided that (i) each partial prepayment shall
be in an aggregate principal amount of not less than $5,000,000 or, if greater,
an integral multiple of $1,000,000 in excess thereof, (ii) no partial prepayment
of LIBOR Loans made pursuant to any single Borrowing shall reduce the aggregate
outstanding principal amount of the remaining LIBOR Loans under such Borrowing
to less than $5,000,000 or to any greater amount not an integral multiple of
$1,000,000 in excess thereof, and (iii) unless made together with all amounts
required under SECTION 2.18 to be paid as a consequence of such prepayment, a
prepayment of a LIBOR Loan may be made only on the last day of the Interest
Period applicable thereto. Each such notice shall specify the proposed date of
such prepayment and the aggregate principal amount and Type of the Loans to be
prepaid (and, in the case of LIBOR Loans, the Interest Period of the Borrowing
pursuant to which made), and shall be irrevocable and shall bind the Borrower to
make such prepayment on the terms specified therein. Amounts prepaid pursuant to
this subsection (a) may be reborrowed, subject to the terms and conditions of
this Agreement.
(b) Each prepayment of the Loans made pursuant to this SECTION 2.7 shall
be applied ratably among the Lenders holding the Loans being prepaid, in
proportion to the principal amount held by each.
2.8 Interest.
(a) The Borrower will pay interest in respect of the unpaid principal
amount of each Loan, from the date of Borrowing thereof until such principal
amount shall be paid in full, (i) at the Base Rate, as in effect from time to
time during such periods as such Loan is a Base Rate Loan, and (ii) at the
Adjusted LIBOR Rate, as in effect from time to time during such periods as such
Loan is a LIBOR Loan.
(b) Upon the occurrence and during the continuance of any default by the
Borrower in the payment of any principal of or interest on any Loan or any fee
or other amount hereunder when due (whether at maturity, pursuant to
acceleration or otherwise), and (at the election of the Required Lenders) upon
the occurrence and during the continuance of any other Event of Default, all
outstanding principal amounts of the Loans and, to the greatest extent permitted
by law, all interest accrued on the Loans and all other accrued and outstanding
fees and other amounts hereunder, shall bear interest, after as well as before
judgment, at a rate per annum equal to the interest rate applicable from time to
time thereafter to such Loans (whether the Base Rate or the Adjusted LIBOR Rate)
plus 2% (or, in the case of interest, fees and other amounts for which no rate
is provided hereunder, at the Base Rate plus 2%), and, in each case, such
default interest shall be payable on demand. To the greatest extent permitted by
law, interest shall continue to accrue after the filing by or against the
Borrower of any petition seeking any relief in bankruptcy or under any law
pertaining to insolvency or debtor relief.
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(c) Accrued (and theretofore unpaid) interest shall be payable as follows:
(i) in respect of each Base Rate Loan (including any Base Rate Loan
or portion thereof paid or prepaid pursuant to the provisions of SECTION
2.6 except as provided hereinbelow) in arrears on the last Business Day of
each calendar quarter, beginning with the first such day to occur after
the Closing Date; provided, that in the event the Loans are repaid or
prepaid in full and the Commitments have been terminated, then accrued
interest in respect of all Base Rate Loans shall be payable together with
such repayment or prepayment on the date thereof;
(ii) in respect of each LIBOR Loan (including any LIBOR Loan or
portion thereof paid or prepaid pursuant to the provisions of SECTION 2.6,
except as provided hereinbelow), in arrears (y) on the last Business Day
of the Interest Period applicable thereto (subject to the provisions of
clause (iv) in SECTION 2.10) and (z) in addition, in the case of a LIBOR
Loan with an Interest Period having a duration of six months or longer, on
each date on which interest would have been payable under clause (y) above
had successive Interest Periods of three months' duration been applicable
to such LIBOR Loan; provided, that in the event all LIBOR Loans made
pursuant to a single Borrowing are repaid or prepaid in full, then accrued
interest in respect of such LIBOR Loans shall be payable together with
such repayment or prepayment on the date thereof; and
(iii) in respect of any Loan, at maturity (whether pursuant to
acceleration or otherwise) and, after maturity, on demand.
(d) Nothing contained in this Agreement or in any other Credit Document
shall be deemed to establish or require the payment of interest to any Lender at
a rate in excess of the maximum rate permitted by applicable law. If the amount
of interest payable for the account of any Lender on any interest payment date
would exceed the maximum amount permitted by applicable law to be charged by
such Lender, the amount of interest payable for its account on such interest
payment date shall be automatically reduced to such maximum permissible amount.
In the event of any such reduction affecting any Lender, if from time to time
thereafter the amount of interest payable for the account of such Lender on any
interest payment date would be less than the maximum amount permitted by
applicable law to be charged by such Lender, then the amount of interest payable
for its account on such subsequent interest payment date shall be automatically
increased to such maximum permissible amount, provided that at no time shall the
aggregate amount by which interest paid for the account of any Lender has been
increased pursuant to this sentence exceed the aggregate amount by which
interest paid for its account has theretofore been reduced pursuant to the
previous sentence.
(e) The Agent shall promptly notify the Borrower and the Lenders upon
determining the interest rate for each Borrowing of LIBOR Loans after its
receipt of the relevant Notice of Borrowing or Notice of
Conversion/Continuation, and upon each change in the Base Rate; provided,
however, that the failure of the Agent to provide the Borrower or the Lenders
with any such notice shall neither affect any obligations of the Borrower or the
Lenders hereunder nor result in any liability on the part of the Agent to the
Borrower or any Lender. Each such determination (including each determination of
the Reserve Requirement) shall, absent manifest error, be conclusive and binding
on all parties hereto.
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2.9 Fees. The Borrower agrees to pay:
(a) To the Arranger, for its own account, on the date of execution of this
Agreement, the arrangement fee separately agreed upon between Wachovia and the
Arranger;
(b) To the Administrative Agent, for the account of each Lender, a
commitment fee for each calendar quarter (or portion thereof) for the period
from the date of this Agreement to the Termination Date, at a per annum rate
equal to the Applicable Percentage in effect for such fee from time to time
during such quarter, on such Lender's ratable share (based on the proportion
that its Commitment bears to the aggregate Commitments) of the average daily
aggregate Unutilized Commitments, payable in arrears (i) on the last Business
Day of each calendar quarter, beginning with the first such day to occur after
the Closing Date, and (ii) on the Termination Date;
(c) To the Administrative Agent, for its own account, the annual
administrative fee separately agreed upon in writing between the Administrative
Agent and the Borrower, on the terms and at the times so agreed; and
(d) To the Administrative Agent, for the account of each Lender, a
utilization fee for each day from the date of this Agreement to the Termination
Date on which the aggregate principal amount of all outstanding Loans exceeds
thirty-three percent (33%) of the aggregate Commitments at a per annum rate
equal to the Applicable Percentage in effect for such fee from time to time, on
such Lender's ratable share (based on the proportion that its Commitment bears
to the aggregate Commitments) of the average daily amount of all outstanding
Loans, payable in arrears (i) on the last Business Day of each calendar quarter,
and (ii) on the Termination Date.
2.10 Interest Periods. Concurrently with the giving of a Notice of
Borrowing in the case of a Borrowing of LIBOR Loans or a Notice of
Conversion/Continuation in respect of any Borrowing comprised of Base Rate Loans
to be converted into, or LIBOR Loans to be continued as, LIBOR Loans, the
Borrower shall have the right to elect, pursuant to such notice, the interest
period (each, an "Interest Period") to be applicable to such LIBOR Loans, which
Interest Period shall, at the option of the Borrower, be a one, two, three or
six-month period; provided, however, that:
(i) all LIBOR Loans comprising a single Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any LIBOR Loan shall commence
on the date of the Borrowing of such LIBOR Loan (including the date of any
continuation of, or conversion into, such LIBOR Loan), and each successive
Interest Period applicable to such LIBOR Loan shall commence on the day on
which the next preceding Interest Period applicable thereto expires;
(iii) LIBOR Loans may not be outstanding under more than seven (7)
separate Interest Periods at any one time (for which purpose Interest
Periods shall be deemed to be separate even if they are coterminous);
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(iv) if any Interest Period otherwise would expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day unless such next succeeding Business Day falls in
another calendar month, in which case such Interest Period shall expire on
the next preceding Business Day;
(v) the Borrower may not select any Interest Period that expires
after the Maturity Date;
(vi) the Borrower may not select any Interest Period (and
consequently, no LIBOR Loans shall be made) if a Default or Event of
Default shall have occurred and be continuing at the time of such Notice
of Borrowing or Notice of Conversion/Continuation with respect to any
Borrowing; and
(vii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month during which such
Interest Period would otherwise expire, such Interest Period shall expire
on the last Business Day of such calendar month.
2.11 Conversions and Continuations.
(a) The Borrower shall have the right, on any Business Day, to elect (i)
to convert all or a portion of the outstanding principal amount of any Base Rate
Loans into LIBOR Loans, or to convert any LIBOR Loans the Interest Periods for
which end on the same day into Base Rate Loans, or (ii) upon the expiration of
any Interest Period, to continue all or a portion of the outstanding principal
amount of any LIBOR Loans the Interest Periods for which end on the same day for
an additional Interest Period; provided that (x) any such conversion of LIBOR
Loans into Base Rate Loans shall involve an aggregate principal amount of not
less than $5,000,000 or, if greater, an integral multiple of $1,000,000 in
excess thereof; any such conversion of Base Rate Loans of the same Borrowing
into, or continuation of LIBOR Loans shall involve an aggregate principal amount
of not less than $5,000,000 or, if greater, an integral multiple of $1,000,000
in excess thereof; and no partial conversion of LIBOR Loans of the same
Borrowing shall reduce the outstanding principal amount of such LIBOR Loans to
less than $5,000,000 or to any greater amount not an integral multiple of
$1,000,000 in excess thereof, (y) except as otherwise provided in SECTION
2.16(d), LIBOR Loans may be converted into Base Rate Loans only on the last day
of the Interest Period applicable thereto (and, in any event, if a LIBOR Loan is
converted into a Base Rate Loan on any day other than the last day of the
Interest Period applicable thereto, the Borrower will pay, upon such conversion,
all amounts required under SECTION 2.18 to be paid as a consequence thereof) and
(z) no conversion of Base Rate Loans into LIBOR Loans or continuation of LIBOR
Loans shall be permitted during the continuance of a Default or Event of
Default.
(b) The Borrower shall make each such election by giving the
Administrative Agent written notice not later than 11:00 a.m., Charlotte time,
three (3) Business Days prior to the intended effective date of any conversion
of Base Rate Loans into, or continuation of, LIBOR Loans and one (1) Business
Day prior to the intended effective date of any conversion of LIBOR Loans into
Base Rate Loans. Each such notice (each, a "Notice of Conversion/Continuation")
shall be irrevocable, shall be given in the form of EXHIBIT B-2 and shall
specify (x) the date of
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such conversion or continuation (which shall be a Business Day), (y) in the case
of a conversion into, or a continuation of, LIBOR Loans, the Interest Period to
be applicable thereto, and (z) the aggregate amount and Type of the Loans being
converted or continued. Upon the receipt of a Notice of Conversion/Continuation,
the Administrative Agent will promptly notify each Lender of the proposed
conversion or continuation. In the event that the Borrower shall fail to deliver
a Notice of Conversion/Continuation as provided herein with respect to any
outstanding LIBOR Loans, such LIBOR Loans shall automatically be converted to
Base Rate Loans upon the expiration of the then current Interest Period
applicable thereto (unless repaid pursuant to the terms hereof). In the event
the Borrower shall have failed to select in a Notice of Conversion/Continuation
the duration of the Interest Period to be applicable to any conversion into, or
continuation of, LIBOR Loans, then the Borrower shall be deemed to have selected
an Interest Period with a duration of one month.
2.12 Method of Payments; Computations.
(a) All payments by the Borrower hereunder shall be made without setoff,
counterclaim or other defense, in Dollars and in immediately available funds to
the Administrative Agent, for the account of the Lenders entitled to such
payment (except as otherwise expressly provided herein as to payments required
to be made directly to the Lenders) at its office referred to in SECTION 10.5,
prior to 12:00 noon, Charlotte time, on the date payment is due. Any payment
made as required hereinabove, but after 12:00 noon, Charlotte time, shall be
deemed to have been made on the next succeeding Business Day. If any payment
falls due on a day that is not a Business Day, then such due date shall be
extended to the next succeeding Business Day (except that in the case of LIBOR
Loans to which the provisions of SECTION 2.10(iv) are applicable, such due date
shall be the next preceding Business Day), and such extension of time shall then
be included in the computation of payment of interest, fees or other applicable
amounts.
(b) The Administrative Agent will distribute to the Lenders like amounts
relating to payments made to the Administrative Agent for the account of the
Lenders as follows: (i) if the payment is received by 12:00 noon, Charlotte
time, in immediately available funds, the Administrative Agent will make
available to each relevant Lender on the same date, by wire transfer of
immediately available funds, such Lender's ratable share of such payment (based
on the percentage that the amount of the relevant payment owing to such Lender
bears to the total amount of such payment owing to all of the relevant Lenders),
and (ii) if such payment is received after 12:00 noon, Charlotte time, or in
other than immediately available funds, the Administrative Agent will make
available to each such Lender its ratable share of such payment by wire transfer
of immediately available funds on the next succeeding Business Day (or in the
case of uncollected funds, as soon as practicable after collected). If the
Administrative Agent shall not have made a required distribution to the
appropriate Lenders as required hereinabove after receiving a payment for the
account of such Lenders, the Administrative Agent will pay to each such Lender,
on demand, its ratable share of such payment with interest thereon at the
Federal Funds Rate for each day from the date such amount was required to be
disbursed by the Administrative Agent until the date repaid to such Lender.
(c) Unless the Administrative Agent shall have received written notice
from the Borrower prior to the date on which any payment is due to any Lender
hereunder that such
26
payment will not be made in full, the Administrative Agent may assume that the
Borrower has made such payment in full to the Administrative Agent on such date,
and the Administrative Agent may, in reliance on such assumption, but shall not
be obligated to, cause to be distributed to such Lender on such due date an
amount equal to the amount then due to such Lender. If and to the extent the
Borrower shall not have so made such payment in full to the Administrative
Agent, and without limiting the obligation of the Borrower to make such payment
in accordance with the terms hereof, such Lender shall repay to the
Administrative Agent forthwith on demand such amount so distributed to such
Lender, together with interest thereon for each day from the date such amount is
so distributed to such Lender until the date repaid to the Administrative Agent,
at the Federal Funds Rate.
(d) All computations of interest and fees hereunder (including
computations of the Reserve Requirement) shall be made on the basis of a year
consisting of (i) in the case of interest on Base Rate Loans, 365 or 366 days,
as the case may be, or (ii) in all other instances, 360 days, and in each case
under (i) and (ii) above, with regard to the actual number of days (including
the first day, but excluding the last day) elapsed.
2.13 Recovery of Payments.
(a) The Borrower agrees that to the extent the Borrower makes a payment or
payments to or for the account of the Administrative Agent or any Lender, which
payment or payments or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other party under any bankruptcy, insolvency or similar
state or federal law, common law or equitable cause (whether as a result of any
demand, settlement, litigation or otherwise), then, to the extent of such
payment or repayment, the Obligation intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been received.
If any amounts distributed by the Administrative Agent to any Lender are
subsequently returned or repaid by the Administrative Agent to the Borrower or
its representative or successor in interest, whether by court order or by
settlement approved by the Lender in question, such Lender will, promptly upon
receipt of notice thereof from the Administrative Agent, pay the Administrative
Agent such amount. If any such amounts are recovered by the Administrative Agent
from the Borrower or its representative or successor in interest, the
Administrative Agent will redistribute such amounts to the Lenders on the same
basis as such amounts were originally distributed.
2.14 Use of Proceeds. The proceeds of the Loans shall be used to provide
for working capital and general corporate purposes (including permitted
acquisitions) of the Borrower.
2.15 Pro Rata Treatment.
(a) All fundings, continuations and conversions of Loans shall be made by
the Lenders pro rata on the basis of their respective Commitments (in the case
of the initial funding of Loans pursuant to SECTION 2.2) or on the basis of
their respective outstanding Loans (in the case of continuations and conversions
of Loans pursuant to SECTION 2.11, and additionally in all cases in the event
the Commitments have expired or have been terminated), as the case may be
27
from time to time. All payments on account of principal of or interest on any
Loans, fees or any other Obligations owing to or for the account of any one or
more Lenders shall be apportioned ratably among such Lenders in proportion to
the amounts of such principal, interest, fees or other Obligations owed to them
respectively.
(b) Each Lender agrees that if it shall receive any amount hereunder
(whether by voluntary payment, realization upon security, exercise of the right
of setoff or banker's lien, counterclaim or cross action, or otherwise, other
than pursuant to SECTIONS 2.16(a), 2.16(b), 2.16(d), 2.17, 2.18, or 10.7)
applicable to the payment of any of the Obligations that exceeds its ratable
share (according to the proportion of (i) the amount of such Obligations due and
payable to such Lender at such time to (ii) the aggregate amount of such
Obligations due and payable to all Lenders at such time) of payments on account
of such Obligations then or therewith obtained by all the Lenders to which such
payments are required to have been made, such Lender shall forthwith purchase
from the other Lenders such participations in such Obligations as shall be
necessary to cause such purchasing Lender to share the excess payment or other
recovery ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender (whether as a result of any demand, settlement, litigation or otherwise),
such purchase from each such other Lender shall be rescinded and each such other
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery, together with an amount equal to such other Lender's ratable
share (according to the proportion of (i) the amount of such other Lender's
required repayment to (ii) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by the purchasing Lender
in respect of the total amount so recovered. The Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to the provisions of
this subsection (b) may, to the fullest extent permitted by law, exercise any
and all rights of payment (including, without limitation, setoff, banker's lien
or counterclaim) with respect to such participation as fully as if such
participant were a direct creditor of the Borrower in the amount of such
participation. If under any applicable bankruptcy, insolvency or similar law,
any Lender receives a secured claim in lieu of a setoff to which this subsection
(b) applies, such Lender shall, to the extent practicable, exercise its rights
in respect of such secured claim in a manner consistent with the rights of the
Lenders entitled under this subsection (b) to share in the benefits of any
recovery on such secured claim.
2.16 Increased Costs; Change in Circumstances; Illegality; etc.
(a) If the introduction of or any change in any applicable law, rule or
regulation or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, in each case after the date hereof, or compliance by any Lender with
any guideline or request from any such Governmental Authority (whether or not
having the force of law) given or made after the date hereof, shall (i) subject
such Lender to any tax or other charge, or change the basis of taxation of
payments to such Lender, in respect of any of its LIBOR Loans or any other
amounts payable hereunder in respect of LIBOR Loans or its obligation to make,
fund or maintain any LIBOR Loans (other than any change in the rate or basis of
tax on the overall net income or profits of such Lender or its applicable
Lending Office or franchise taxes imposed in lieu thereof), (ii) impose, modify
or deem applicable any reserve, special deposit or similar requirement (but
excluding any reserves to the extent actually included within the Reserve
Requirement in the calculation of the LIBOR Rate) against assets of, deposits
28
with or for the account of, or credit extended by, such Lender or its applicable
Lending Office, or (iii) impose on such Lender or its applicable Lending Office
any other condition affecting LIBOR Loans, and the result of any of the
foregoing shall be to increase the cost to such Lender of making or maintaining
any LIBOR Loans or to reduce the amount of any sum received or receivable by
such Lender hereunder, the Borrower will, within thirty (30) days after demand
therefor by such Lender, pay to such Lender such additional amounts as shall
compensate such Lender for such increase in costs or reduction in return.
(b) If any Lender shall have reasonably determined that the introduction
of or any change in any applicable law, rule or regulation regarding capital
adequacy or in the interpretation or administration thereof by any Governmental
Authority charged with the interpretation or administration thereof, in each
case after the date hereof, or compliance by such Lender with any guideline or
request from any such Governmental Authority (whether or not having the force of
law) given or made after the date hereof, has or would have the effect, as a
consequence of such Lender's Commitment or Loans hereunder, of reducing the rate
of return on the capital of such Lender or any Person controlling such Lender to
a level below that which such Lender or controlling Person could have achieved
but for such introduction, change or compliance (taking into account such
Lender's or controlling Person's policies with respect to capital adequacy), the
Borrower will, within thirty (30) days after demand therefor by such Lender
therefor, pay to such Lender such additional amounts as will compensate such
Lender or controlling Person for such reduction in return; provided that such
Lender is treating its other similarly situated customers in a consistent
manner.
(c) If, on or prior to the first day of any Interest Period, (y) the
Administrative Agent shall have determined that adequate and reasonable means do
not exist for ascertaining the applicable LIBOR Rate for such Interest Period or
(z) the Administrative Agent shall have received written notice from the
Required Lenders of their determination that the rate of interest referred to in
the definition of "LIBOR Rate" upon the basis of which the Adjusted LIBOR Rate
for LIBOR Loans for such Interest Period is to be determined will not adequately
and fairly reflect the cost to such Lenders of making or maintaining LIBOR Loans
during such Interest Period, the Administrative Agent will forthwith so notify
the Borrower and the Lenders. Upon such notice, (i) all then outstanding LIBOR
Loans shall automatically, on the expiration date of the respective Interest
Periods applicable thereto (unless then repaid in full), be converted into Base
Rate Loans, (ii) the obligation of the Lenders to make, to convert Base Rate
Loans into, or to continue, LIBOR Loans shall be suspended (including pursuant
to the Borrowing to which such Interest Period applies), and (iii) any Notice of
Borrowing or Notice of Conversion/Continuation given at any time thereafter with
respect to LIBOR Loans shall be deemed to be a request for Base Rate Loans, in
each case until the Administrative Agent or the Required Lenders, as the case
may be, shall have determined that the circumstances giving rise to such
suspension no longer exist (and the Required Lenders, if making such
determination, shall have so notified the Administrative Agent), and the
Administrative Agent shall have so notified the Borrower and the Lenders.
(d) Notwithstanding any other provision in this Agreement, if, at any time
after the date hereof and from time to time, any Lender shall have determined in
good faith that the introduction of or any change in any applicable law, rule or
regulation or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or
29
administration thereof, or compliance with any guideline or request from any
such Governmental Authority (whether or not having the force of law), has or
would have the effect of making it unlawful for such Lender to make or to
continue to make or maintain LIBOR Loans, such Lender will forthwith so notify
the Administrative Agent and the Borrower. Upon such notice, (i) each of such
Lender's then outstanding LIBOR Loans shall automatically, on the expiration
date of the respective Interest Period applicable thereto (or, to the extent any
such LIBOR Loan may not lawfully be maintained as a LIBOR Loan until such
expiration date, upon such notice and to the extent not sooner prepaid), be
converted into a Base Rate Loan, (ii) the obligation of such Lender to make, to
convert Base Rate Loans into, or to continue, LIBOR Loans shall be suspended
(including pursuant to any Borrowing for which the Administrative Agent has
received a Notice of Borrowing but for which the Borrowing Date has not
arrived), and (iii) any Notice of Borrowing or Notice of Conversion/Continuation
given at any time thereafter with respect to LIBOR Loans shall, as to such
Lender, be deemed to be a request for a Base Rate Loan, in each case until such
Lender shall have determined that the circumstances giving rise to such
suspension no longer exist and shall have so notified the Administrative Agent,
and the Administrative Agent shall have so notified the Borrower.
A certificate (which shall be in reasonable detail) showing the bases for
the determinations set forth in this SECTION 2.16 by an Lender as to any amounts
payable pursuant to this SECTION 2.16 shall be submitted by such Lender to the
Borrower either directly or through the Administrative Agent. The determinations
set forth in any such certificate for purposes of this SECTION 2.16 of any
increased costs, reduction in return, market contingencies, illegality or any
other matter shall, absent manifest error, be conclusive; provided that such
determinations are made in good faith. Nothing in this SECTION 2.16 shall
require or be construed to require the Borrower to pay any interest, fees, costs
or other amounts in excess of that permitted by applicable law.
2.17 Taxes.
(a) Subject to subsection (e), any and all payments by the Borrower
hereunder or under any other Credit Document shall be made, in accordance with
the terms hereof and thereof, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding branch profits
taxes imposed on, and taxes imposed on or measured by, the overall net income of
(or franchise taxes imposed in lieu thereof) the Administrative Agent or any
Lender, in either case by reason of any present or former connection between the
Administrative Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision thereof, other than
such a connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Credit Document (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any other Credit Document to the Administrative Agent or any
Lender, (i) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this SECTION 2.17), the Administrative Agent or such Lender,
as the case may be, receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower
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will make such deductions, (iii) the Borrower will pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law and (iv) the Borrower will deliver to the Administrative Agent or
such Lender, as the case may be, evidence of such payment.
(b) Subject to subsection (e), the Borrower will indemnify the
Administrative Agent and each Lender for the full amount of Taxes (including,
without limitation, any Taxes imposed by any jurisdiction on amounts payable
under this SECTION 2.17) paid by the Administrative Agent or such Lender, as the
case may be, and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto. This indemnification shall be made
within thirty (30) days from the date the Administrative Agent or such Lender,
as the case may be, makes written demand therefor. Such written demand shall set
forth in reasonable detail the amount of Taxes payable and the calculation
thereof and shall be conclusive and binding absent manifest error.
(c) Each of the Administrative Agent and the Lenders agrees that if it
subsequently recovers, or receives a permanent net tax benefit with respect to,
any amount of Taxes (i) previously paid by it and as to which it has been
indemnified by or on behalf of the Borrower or (ii) previously deducted by the
Borrower (including, without limitation, any Taxes deducted from any additional
sums payable under SECTION 2.17(a)(i)), the Administrative Agent or such Lender,
as the case may be, shall reimburse the Borrower to the extent of the amount of
any such recovery or permanent net tax benefit (but only to the extent of
indemnity payments made, or additional amounts paid, by or on behalf of the
Borrower under this SECTION 2.17 with respect to the Taxes giving rise to such
recovery or tax benefit); provided, however, that the Borrower, upon the request
of the Administrative Agent or such Lender, agrees to repay to the
Administrative Agent or such Lender, as the case may be, the amount paid over to
the Borrower (together with any penalties, interest or other charges), in the
event the Administrative Agent or such Lender is required to repay such amount
to the relevant taxing authority or other Governmental Authority. The
determination by the Administrative Agent or any Lender of the amount of any
such recovery or permanent net tax benefit shall, in the absence of manifest
error, be conclusive and binding.
(d) If any Lender is not a United States person (as such term is defined
in Section 7701(a)(30) of the Internal Revenue Code) for federal income tax
purposes (a "Non-U.S. Lender") and is entitled to an exemption from or a
reduction of United States withholding tax pursuant to the Internal Revenue
Code, such Non-U.S. Lender will deliver to each of the Administrative Agent and
the Borrower, on or prior to the Closing Date (or, in the case of a Non-U.S.
Lender that becomes a party to this Agreement as a result of an assignment after
the Closing Date, on the effective date of such assignment), (i) in the case of
a Non-U.S. Lender that is a "bank" for purposes of Section 881(c)(3)(A) of the
Internal Revenue Code, two accurate and properly completed original signed
copies of Internal Revenue Service Form W-8BEN or W-8ECI, as applicable (or
successor forms), certifying that such Non-U.S. Lender is entitled to an
exemption from or a reduction of withholding or deduction for or on account of
United States federal income taxes in connection with payments under this
Agreement or any of the other Credit Documents, or (ii) in the case of a
Non-U.S. Lender that is not a "bank" for purposes of Section 881(c)(3)(A) of the
Internal Revenue Code, a certificate in form and substance reasonably
satisfactory to the Administrative Agent and the Borrower and to the effect that
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(x) such Non-U.S. Lender is not a "bank" for purposes of Section 881(c)(3)(A) of
the Internal Revenue Code, is not subject to regulatory or other legal
requirements as a bank in any jurisdiction, and has not been treated as a bank
for purposes of any tax, securities law or other filing or submission made to
any governmental authority, any application made to a rating agency or
qualification for any exemption from any tax, securities law or other legal
requirements, (y) is not a 10-percent shareholder for purposes of Section
881(c)(3)(B) of the Internal Revenue Code and (z) is not a controlled foreign
corporation receiving interest from a related person for purposes of Section
881(c)(3)(C) of the Internal Revenue Code, together with two accurate and
properly completed original signed copies of Internal Revenue Service Form
W-8BEN (or successor form). Each such Non-U.S. Lender further agrees to deliver
to each of the Administrative Agent and the Borrower additional copies of each
such relevant form on or before the date that such form expires or becomes
obsolete or after the occurrence of any event (including a change in its
applicable Lending Office) requiring a change in the most recent forms so
delivered by it, in each case certifying that such Non-U.S. Lender is entitled
to an exemption from or a reduction of withholding or deduction for or on
account of United States federal income taxes in connection with payments under
this Agreement or any of the other Credit Documents, unless an event (including,
without limitation, any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required, which event
renders all such forms inapplicable or the exemption or reduction to which such
forms relate unavailable and such Non-U.S. Lender notifies the Administrative
Agent and the Borrower that it is not entitled to receive payments without or at
a reduced rate of deduction or withholding of United States federal income
taxes. Each such Non-U.S. Lender will promptly notify the Administrative Agent
and the Borrower of any changes in circumstances that would modify or render
invalid any claimed exemption or reduction.
(e) The Borrower shall not be required to indemnify any Non-U.S. Lender,
or to pay any additional amounts to any Non-U.S. Lender, in respect of United
States federal withholding tax to the extent that (i) the obligation to withhold
amounts with respect to United States federal withholding tax existed on the
date such Non-U.S. Lender became a party to this Agreement; provided, however,
that this clause (i) shall not apply to the extent that (y) the indemnity
payments or additional amounts any Lender would be entitled to receive (without
regard to this clause (i)) do not exceed the indemnity payment or additional
amounts that the person making the assignment, participation or transfer to such
Lender would have been entitled to receive in the absence of such assignment,
participation or transfer, or (z) such assignment, participation or transfer was
requested by the Borrower, (ii) the obligation to pay such additional amounts
would not have arisen but for a failure by such Non-U.S. Lender to comply with
the provisions of SECTION 2.16(d), or (iii) any of the representations or
certifications made by a Non-U.S. Lender pursuant to SECTION 2.16(d) are
incorrect at the time a payment hereunder is made, other than by reason of any
change in treaty, law or regulation having effect after the date such
representations or certifications were made.
2.18 Compensation. The Borrower will compensate each Lender upon demand
(which demand shall set forth the basis for requesting such compensation) for
all losses, expenses and liabilities (including, without limitation, any loss,
expense or liability incurred by reason of the liquidation or reemployment of
deposits or other funds required by such Lender to fund or maintain LIBOR Loans)
that such Lender may incur or sustain (i) if for any reason (other than a
default by such Lender) a Borrowing or continuation of, or conversion into, a
LIBOR Loan does
32
not occur on a date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation, (ii) if any repayment, prepayment or conversion of any
LIBOR Loan occurs on a date other than the last day of an Interest Period
applicable thereto (including as a consequence of acceleration of the maturity
of the Loans pursuant to SECTION 8.2), (iii) if any prepayment of any LIBOR Loan
is not made on any date specified in a notice of prepayment given by the
Borrower or (iv) as a consequence of any other failure by the Borrower to make
any payments with respect to any LIBOR Loan when due hereunder. Calculation of
all amounts payable to a Lender under this SECTION 2.18 shall be made as though
such Lender had actually funded its relevant LIBOR Loan through the purchase of
a Eurodollar deposit bearing interest at the LIBOR Rate in an amount equal to
the amount of such LIBOR Loan, having a maturity comparable to the relevant
Interest Period; provided, however, that each Lender may fund its LIBOR Loans in
any manner it sees fit and the foregoing assumption shall be utilized only for
the calculation of amounts payable under this SECTION 2.18. Determinations by
any Lender for purposes of this SECTION 2.18 of any such losses, expenses or
liabilities shall, absent manifest error, be conclusive.
2.19 Replacement of Lenders; Mitigation of Costs.
(a) The Borrower may, at any time and so long as no Default or Event of
Default has then occurred and is continuing, replace any Lender (i) that has
requested compensation from the Borrower under SECTION 2.16(a), 2.16(b) or 2.17,
(ii) the obligation of which to make or maintain LIBOR Loans has been suspended
under SECTION 2.16(d) or (iii) that is a Defaulting Lender, in any case under
clauses (i) through (iii) above by written notice to such Lender and the
Administrative Agent given not more than sixty (60) days after any such event
and identifying one or more banks or financial institutions reasonably
acceptable to the Administrative Agent (each, a "Replacement Lender," and
collectively, the "Replacement Lenders") to replace such Lender (the "Replaced
Lender"), provided that (i) the notice from the Borrower to the Replaced Lender
and the Administrative Agent provided for hereinabove shall specify an effective
date for such replacement (the "Replacement Effective Date"), which shall be at
least five (5) Business Days after such notice is given, (ii) as of the relevant
Replacement Effective Date, each Replacement Lender shall enter into an
Assignment and Acceptance with the Replaced Lender pursuant to SECTION 10.7(a)
(but shall not be required to pay the processing fee otherwise payable to the
Administrative Agent pursuant to SECTION 10.7(a), which fee, for purposes
hereof, shall be waived), pursuant to which such Replacement Lenders
collectively shall acquire, in such proportion among them as they may agree with
the Borrower and the Administrative Agent, all (but not less than all) of the
Commitments and outstanding Loans of the Replaced Lender, and, in connection
therewith, shall pay (y) to the Replaced Lender, as the purchase price in
respect thereof, an amount equal to the sum as of the Replacement Effective Date
(without duplication) of (1) the unpaid principal amount of, and all accrued but
unpaid interest on, all outstanding Loans of the Replaced Lender and (2) the
Replaced Lender's ratable share of all accrued but unpaid fees owing to the
Replaced Lender hereunder, and (z) to the Administrative Agent, for its own
account, any amounts owing to the Administrative Agent by the Replaced Lender
under SECTION 2.3(b), and (iii) all other obligations of the Borrower owing to
the Replaced Lender (other than those specifically described in clause (ii)
above in respect of which the assignment purchase price has been, or is
concurrently being, paid), including, without limitation, amounts payable under
SECTIONS 2.16(a), 2.16(b) and 2.17 which give rise to the replacement of such
Replaced Lender and amounts payable under SECTION 2.18 as a result of the
actions required to
33
be taken under this SECTION 2.19, shall be paid in full by the Borrower to the
Replaced Lender on or prior to the Replacement Effective Date.
(b) Any Lender claiming any amounts pursuant to SECTION 2.16(a), 2.16(b)
or 2.17 shall use reasonable efforts (consistent with legal and regulatory
restrictions) to avoid any costs, reductions or Taxes in respect of which such
amounts are claimed, including the filing of any certificate or document
reasonably requested by the Borrower or the changing of the jurisdiction of its
Lending Office, if such efforts would avoid the need for or reduce the amount of
any such amounts which would thereafter accrue and would not, in the sole
determination of such Lender, result in any additional risks or unreimbursed
costs or expenses to such Lender or be otherwise disadvantageous to such Lender.
(c) No failure by the Administrative Agent or any Lender at any time to
demand payment of any amounts payable under SECTIONS 2.16(a), 2.16(b), 2.17 or
2.18 shall constitute a waiver of its right to demand payment of such amounts at
any later time or to demand payment of any additional amounts arising at any
later time; provided that the Borrower shall not be required to compensate any
Lender pursuant to SECTIONS 2.16(a), 2.16(b), 2.17 or 2.18 for any increased
costs, reductions in return, Taxes or other amounts incurred more than 120 days
prior to the date that such Lender or the Administrative Agent notifies the
Borrower of the circumstances or event giving rise thereto and of its intention
to claim compensation in respect thereof; but provided further that if any
change in law (or change in interpretation or administration thereof) or any
other such event giving rise to any claim for compensation pursuant to SECTIONS
2.16(a), 2.16(b), 2.17 or 2.18 is retroactive, then the 120-day period referred
to above shall be extended to include the period of retroactive effect thereof.
2.20 Extension of Maturity Date.
(a) The Borrower may, by notice to the Administrative Agent (which shall
promptly notify the Lenders), request up to two (2) one-year extensions of the
Maturity Date, each such request to be given not less than sixty (60) days prior
to the Maturity Date then in effect (the "Existing Maturity Date"). Such request
shall be accompanied by a certificate, signed by the chief executive officer or
the chief financial officer of the Borrower, in form reasonably satisfactory to
the Administrative Agent, certifying on behalf of the Borrower that (A) all
representations and warranties of the Borrower contained in this Agreement and
the other Credit Documents are true and correct in all material respects as of
the date of request and (B) no Default or Event of Default has occurred and is
continuing.
(b) Each Lender, acting in its sole and individual discretion, shall, by
notice to the Administrative Agent given not less than thirty (30) days prior to
the Existing Maturity Date, elect to either extend the Existing Maturity Date as
provide in SECTION 2.20(a) or decline to agree to such extension (any Lender
that does not so advise shall be deemed to have declined to extend the Existing
Maturity Date). The election of any Lender to agree to any such extension shall
not obligate any other Lender to so agree.
(c) The Administrative Agent shall notify the Borrower in writing of each
Lender's determination under this SECTION 2.20 no later than the date fifteen
(15) days prior to the Existing Maturity Date (or, if such date is not a
Business Day, on the next preceding Business Day).
34
(d) If (and only if) each of the Lenders shall have agreed so to extend
the Existing Maturity Date, then, effective as of the Existing Maturity Date
(provided that no Default or Event of Default has occurred and is continuing as
of such date both before and after giving effect to the requested extension),
the Maturity Date shall be extended to the first anniversary of the Existing
Maturity Date.
ARTICLE III
CONDITIONS PRECEDENT
3.1 Conditions Precedent to Closing. This Agreement shall become effective
on the date on which each of the following conditions shall be satisfied:
(a) The Administrative Agent shall have received the following, each dated
as of the Closing Date (unless otherwise specified) and in such number of copies
as the Administrative Agent shall have requested:
(i) Executed counterparts of this Agreement from each party hereto
either signed on behalf of such party or written evidence satisfactory to
the Administrative Agent (which may include telecopy transmission of a
signed signature page to this Agreement) that such party has signed a
counterpart of this Agreement;
(ii) To the extent requested by any Lender in accordance with
SECTION 2.4(d), a Note for such Lender duly completed in accordance with
the provisions of SECTION 2.4(d) and executed by the Borrower;
(iii) A certificate, signed by the chief executive officer or the
chief financial officer of the Borrower, in form reasonably satisfactory
to the Administrative Agent, certifying on behalf of the Borrower that (A)
all representations and warranties of the Borrower contained in this
Agreement and the other Credit Documents are true and correct in all
material respects as of the Closing Date, both immediately before and
after giving effect to the consummation of the transactions contemplated
hereby, (B) no Default or Event of Default has occurred and is continuing,
and (C) both immediately before and after giving effect to the
consummation of the transactions contemplated by this Agreement, no
Material Adverse Effect has occurred since December 31, 2003 and there
exists no event, condition or state of facts that could reasonably be
expected to have a Material Adverse Effect;
(iv) A certificate of the secretary or an assistant secretary of the
Borrower, in form and substance satisfactory to the Administrative Agent,
certifying (A) that attached thereto is a true and complete copy of the
certificate of incorporation and all amendments thereto of the Borrower,
certified as of a recent date by the Secretary of State of Delaware and
that the same has not been amended since the date of such certification,
(B) that attached thereto is a true and complete copy of the bylaws of the
Borrower, as then in effect and as in effect at all times from the date on
which the resolutions referred to in clause (C) below were adopted to and
including the date of such certificate, and (C) that attached thereto is a
true and complete copy of resolutions adopted by the board of directors of
the Borrower authorizing the execution, delivery and performance of this
35
Agreement and the other Credit Documents to which it is a party, and as to
the incumbency and genuineness of the signature of each officer of the
Borrower executing this Agreement or any of the other Credit Documents,
and attaching all such copies of the documents described above; and
(v) the favorable opinions of Xxxxx Xxxxxxxxxx LLP counsel to the
Borrower addressed to the Administrative Agent and the Lenders and in form
and substance reasonably satisfactory to the Administrative Agent;
(b) The Administrative Agent shall have received a certificate as of a
recent date of the good standing of each of (i) the Borrower, and (ii) the
Material Subsidiaries, in each case under the laws of their respective
jurisdictions of organization, from the Secretary of State or Insurance
Regulatory Authority (or comparable Governmental Authority) of such
jurisdiction;
(c) All legal, tax, accounting, business and other matters relating to the
Borrower and its Subsidiaries, documentation and corporate or other proceedings
incident to the transactions contemplated hereby shall be reasonably acceptable
to the Administrative Agent; all approvals, permits and consents of any
Governmental Authority (including, without limitation, all relevant Insurance
Regulatory Authorities) or other Persons required in connection with the
execution and delivery of this Agreement shall have been obtained (without the
imposition of conditions that are not reasonably acceptable to the
Administrative Agent), and all related filings, if any, shall have been made,
and all such approvals, permits, consents and filings shall be in full force and
effect and the Administrative Agent shall have received such copies thereof as
it shall have requested; all applicable waiting periods shall have expired
without any adverse action being taken by any Governmental Authority having
jurisdiction; and no action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before, and no
order, injunction or decree shall have been entered by, any court or other
Governmental Authority, in each case to enjoin, restrain or prohibit, to obtain
substantial damages in respect of, or that is otherwise related to or arises out
of, this Agreement, any of the other Credit Documents or the consummation of the
transactions contemplated hereby or thereby, or that, in the opinion of the
Administrative Agent, could reasonably be expected to have a Material Adverse
Effect;
(d) Since December 31, 2003, there shall not have occurred any Material
Adverse Effect or any event, condition or state of facts that could reasonably
be expected to have a Material Adverse Effect;
(e) The Borrower shall have paid to the Arranger, the Administrative Agent
and the Lenders all fees and expenses required hereunder or under any other
Credit Document to be paid on or prior to the Closing Date (including fees and
expenses of counsel) in connection with this Agreement and the transactions
contemplated hereby;
(f) The Administrative Agent shall have received a Covenant Compliance
Worksheet, duly completed and certified by the chief financial officer or
treasurer of the Borrower and in form and substance satisfactory to the
Administrative Agent, demonstrating Borrower's compliance with the financial
covenants set forth in ARTICLE VI determined as of March 31, 2004 other than the
computation of the financial covenant set forth in SECTION 6.3 which shall be as
of the last day of the month most recently ended prior to the Closing Date;
36
(g) The Administrative Agent shall have received evidence satisfactory to
it that, (i) all principal, interest and other amounts outstanding under the
Prior Senior Credit Facility, if any, shall be repaid and satisfied in full and
(ii) all commitments to extend credit under the agreements and instruments
relating to the Prior Senior Credit Facility shall have been terminated; and
(h) The Administrative Agent and each Lender shall have received such
other documents, certificates, opinions and instruments in connection with the
transactions contemplated hereby as it shall have reasonably requested.
3.2 Conditions Precedent to all Borrowings. The obligation of each Lender
to make any Loan hereunder is subject to the satisfaction of the following
conditions precedent on the relevant Borrowing Date:
(a) The Administrative Agent shall have received a Notice of Borrowing in
accordance with SECTION 2.2(b);
(b) Each of the representations and warranties contained in ARTICLE IV and
in the other Credit Documents shall be true and correct in all material respects
on and as of the Borrowing Date, with the same effect as if made on and as of
such date, both immediately before and after giving effect to the Loans to be
made on such date (except to the extent any such representation or warranty is
expressly stated to have been made as of a specific date, in which case such
representation or warranty shall be true and correct in all material respects as
of such date); and
(c) No Default or Event of Default shall have occurred and be continuing
on such date, both immediately before and after giving effect to, the Loans to
be made on such date.
Each giving of a Notice of Borrowing, and the consummation of each
Borrowing, shall be deemed to constitute a representation by the Borrower that
the statements contained in SECTIONS 3.2(b) and 3.2(c) above are true, both as
of the date of such notice or request and as of the relevant Borrowing Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to induce the Lenders to extend the credit contemplated hereby,
the Borrower represents and warrants to the Administrative Agent and the Lenders
as follows:
4.1 Organization, Standing, Etc. The Borrower is a corporation duly
incorporated and validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to carry on its business as now conducted, to enter into this
Agreement and to issue the Notes and to perform its obligations under the Credit
Documents. Each Material Subsidiary is duly organized and validly existing and
in good standing under the laws of the jurisdiction of its organization and has
all requisite power and authority to carry on its business as now conducted.
Each of the Borrower and the Subsidiaries
37
(i) holds all certificates of authority, licenses and permits necessary to carry
on its business as presently conducted in each jurisdiction in which it is
carrying on such business, except where the failure to hold such certificates,
licenses or permits would not be reasonably expected to have a Material Adverse
Effect, and (ii) is duly qualified and in good standing as a foreign corporation
(or other organization) in each jurisdiction in which the character of the
properties owned, leased or operated by it or the business conducted by it makes
such qualification necessary and the failure so to qualify would not be
reasonably expected to have a Material Adverse Effect.
4.2 Authorization and Validity. The execution, delivery and performance by
the Borrower of the Credit Documents have been duly authorized by all necessary
corporate action by the Borrower, and this Agreement constitutes, and the Notes
and other Credit Documents when executed will constitute, the legal, valid and
binding obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms, subject to limitations as to
enforceability which might result from bankruptcy, insolvency, moratorium and
other similar laws affecting creditors' rights generally and subject to
limitations on the availability of equitable remedies.
4.3 No Conflict; No Default. The execution, delivery and performance by
the Borrower of the Credit Documents will not (i) violate any provision of any
law, statute, rule or regulation or any order, writ, judgment, injunction,
decree, determination or award of any court, governmental agency or arbitrator
presently in effect having applicability to the Borrower, (ii) violate or
contravene any provision of the certificate of incorporation or bylaws of the
Borrower, or (iii) result in a breach of or constitute a default under any
indenture, loan or credit agreement or any other agreement, lease or instrument
to which the Borrower is a party or by which it or any of its properties may be
bound or result in the creation of any Lien thereunder which breach or default
would reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any Subsidiary is in default under or in violation of any such law,
statute, rule or regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture, loan or credit agreement or other
agreement, lease or instrument in any case in which the consequences of such
default or violation would be reasonably expected to have a Material Adverse
Effect.
4.4 Government Consent. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority is required on the
part of the Borrower to authorize, or is required in connection with the
execution, delivery and performance of, or the legality, validity, binding
effect or enforceability of, the Credit Documents.
4.5 Financial Statements and Condition. The Borrower's audited
consolidated balance sheet and statements of earnings, changes in common
stockholders' equity and cash flows as of and for the fiscal year ended December
31, 2003 heretofore furnished to the Lenders were prepared in accordance with
GAAP consistently applied throughout the periods involved (except as may be
indicated in the notes thereto regarding the adoption of new accounting
policies) and present fairly in all material respects the consolidated financial
position of the Borrower and its Subsidiaries at the respective dates thereof
and the consolidated results of operations of the Borrower and its Subsidiaries
for the respective periods then ended. The Borrower's unaudited balance sheet
and statements of earnings and cash flows as of and for the
38
fiscal quarter ended March 31, 2004 heretofore furnished to the Lenders were
prepared in accordance with GAAP consistently applied throughout the periods
involved and in a manner consistent with that employed in the Borrower's audited
consolidated financial statements for the fiscal year ended December 31, 2003.
The Borrower's unaudited interim financial statements as at March 31, 2004 do
not contain any footnote disclosures and are subject to normal recurring
year-end adjustments, but otherwise present fairly in all material respects the
consolidated financial condition and consolidated results of operations of the
Borrower and its Subsidiaries as of the dates and for the periods indicated
therein except as otherwise set forth therein. As of the dates of such financial
statements, neither the Borrower nor any Subsidiary had any material obligation,
contingent liability, liability for taxes or long-term lease obligation which is
not reflected in such financial statements or in the notes thereto. Since
December 31, 2003, there has been no material adverse change in the business,
operations, property, assets or condition, financial or otherwise, of the
Borrower and its Subsidiaries taken as a whole.
4.6 Litigation. There are no actions, suits or proceedings pending or, to
the knowledge of the Borrower, threatened against or affecting the Borrower or
any Subsidiary or any of their properties before any court or arbitrator, or any
governmental department, board, agency or other instrumentality which, if
determined adversely to the Borrower or such Subsidiary, would be reasonably
expected to have a Material Adverse Effect.
4.7 Compliance. The Borrower and each Material Subsidiary is in compliance
with all Requirements of Laws to which it or its properties may be subject,
except where the failure to be in compliance would not reasonably be expected to
have a Material Adverse Effect.
4.8 Environmental Health and Safety Laws. There does not exist any
violation by the Borrower or any Subsidiary of any Environmental Law, which
violation would be reasonably expected to have a Material Adverse Effect.
Neither the Borrower nor any Subsidiary has received any notice to the effect
that any part of its operations or properties is not in material compliance with
any Environmental Law or notice that it or its property is the subject of any
governmental investigation evaluating whether any remedial action is needed to
respond to any release of any toxic or hazardous waste or substance into the
environment, which non-compliance or remedial action would be reasonably
expected to have a Material Adverse Effect. Except as set out on SCHEDULE 4.8,
the Borrower does not have knowledge that it or its property or any Subsidiary
or the property of any Subsidiary will become subject to Environmental Laws
during the term of this Agreement, compliance with which could reasonably be
expected to require capital expenditures to be made prior to the Maturity Date
which would be reasonably expected to have a Material Adverse Effect.
4.9 ERISA. Each Plan is in substantial compliance with all applicable
requirements of ERISA and the Internal Revenue Code and with all material
applicable rulings and regulations issued under the provisions of ERISA and the
Internal Revenue Code setting forth those requirements. No ERISA Event (i) has
occurred within the five (5) year period prior to the Closing Date, (ii) has
occurred and is continuing, or (iii) to the knowledge of the Borrower, is
reasonably expected to occur with respect to any Plan, in each case under
clauses (i) through (iii) above except to the extent the same, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect. All of the minimum funding standards applicable to such Plans have been
satisfied and there exists no event or condition which would reasonably be
39
expected to result in the institution of proceedings to terminate any Plan under
Section 4042 of ERISA. With respect to each Plan subject to Title IV of ERISA,
as of the most recent valuation date for such Plan (December 31, 2003), the
present value (determined on the basis of assumptions set forth in SCHEDULE 4.9)
of such Plan's projected benefit obligations did not exceed the fair market
value of such Plan's assets, except as set forth in SCHEDULE 4.9.
4.10 Federal Reserve Regulations. Neither the Borrower nor any of its
Subsidiaries is engaged principally or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
Margin Stock. No part of the proceeds of any Loan hereunder will be used for any
purpose which violates, or which would be inconsistent with, the provisions of
Regulations T, U and X as now and from time to time in effect. If requested by
any Lender, the Borrower will furnish to each Lender a statement to the
foregoing effect in conformity with the requirements of Form F.R. U-1 referred
to in said Regulation U.
4.11 Title to Property; Leases; Liens; Subordination. The Borrower has (a)
good and marketable title to its real properties and (b) good and sufficient
title to, or valid, subsisting and enforceable leasehold interest in, its other
material properties, including all real properties, other properties and assets,
referred to as owned by the Borrower in the unaudited interim financial
statement referred to in SECTION 5.1 (other than property disposed of since the
date of such financial statement in the ordinary course of business, or in
transactions reported in Form 8-K or 10-Q reports filed with the Securities and
Exchange Commission since the date of such financial statement). None of such
properties is subject to a Lien, except as allowed under SECTION 7.10. Except as
provided in the Subordination Agreement, the Borrower has not subordinated any
of its rights under any obligation owing to it to the rights of any other
person.
4.12 Taxes. Each of the Borrower and the Subsidiaries has filed (or joined
in filing) all federal income tax and all other material federal, state and
local tax returns required to be filed and has paid or made provision for the
payment of all taxes due and payable pursuant to such returns and pursuant to
any assessments made against it or any of its property and all other taxes, fees
and other charges imposed on it or any of its property by any governmental
authority (other than taxes, fees or charges the amount or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in accordance with GAAP have been provided on the
books of the Borrower). No tax Liens for any tax currently due have been filed
and no material claims are being asserted with respect to any such taxes, fees
or charges. The charges, accruals and reserves on the books of the Borrower in
respect of taxes and other governmental charges are adequate and the Borrower
has no knowledge of any proposed material tax assessment against it or any
Subsidiary.
4.13 Trademarks, Patents. Each of the Borrower and the Subsidiaries owns
or has the right to use all of the patents, trademarks, trade names, service
marks and copyrights, and applications therefor, and all technology, know-how,
processes, methods and designs used in or necessary for the conduct of its
business, to the knowledge of the Borrower or a Subsidiary, without known
conflict with the rights of others, except where the failure to do so would not
be reasonably expected to have a Material Adverse Effect.
4.14 Force Majeure. Since the date of the most recent financial statement
referred to in SECTION 5.1, the business, properties and other assets of the
Borrower and the Subsidiaries have
40
not been affected as the result of any fire or other casualty, strike, lockout,
or other labor trouble, embargo, sabotage, confiscation, condemnation, riot,
civil disturbance, activity of armed forces or act of God in any way which has
had, or would be reasonably expected to have, a Material Adverse Effect.
4.15 Investment Company Act. The Borrower is not an "investment company"
or a company "controlled" by an investment company within the meaning of the
Investment Company Act of 1940, as amended.
4.16 Public Utility Holding Company Act. Borrower is not a "holding
company" or a "subsidiary company" of a holding company or an "affiliate" of a
holding company or of a subsidiary company of a holding company within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
4.17 Retirement Benefits. Except as required under Section 4980B of the
Internal Revenue Code, Section 601 of ERISA or applicable state law, neither the
Borrower nor any Subsidiary is obligated to provide post-retirement medical or
insurance benefits with respect to employees or former employees, which, in the
aggregate, would be reasonably expected to have a Material Adverse Effect.
4.18 Full Disclosure. Subject to the following sentence, neither the
financial statements referred to in SECTION 5.1 nor any other certificate,
written statement, exhibit or report furnished by or on behalf of the Borrower
in connection with or pursuant to this Agreement contains any untrue statement
of a material fact or omits to state any material fact necessary in order to
make the statements contained therein not misleading. Certificates or statements
furnished by or on behalf of the Borrower to the Lenders on or prior to the
Closing Date and consisting of projections or forecasts of future results or
events have been prepared in good faith and based on good faith estimates and
assumptions of the management of the Borrower, and, at the time such projections
and forecasts were delivered, the Borrower had no reason to believe that such
projections or forecasts were not reasonable.
4.19 Subsidiaries. SCHEDULE 4.19 sets forth a list of all Subsidiaries as
of the date of this Agreement and the number and percentage of the shares of
each class of Capital Stock owned beneficially or of record by the Borrower or
any Subsidiary thereof, the jurisdiction of incorporation of each Subsidiary,
and identifies each such Subsidiary that constitutes a Material Subsidiary as of
the date of this Agreement. Except as set forth on SCHEDULE 4.19, as of the date
of this Agreement no Subsidiary is a party to any agreement or instrument or
otherwise subject to any restriction or encumbrance that restricts or limits its
ability to make dividend payments or other distributions in respect of its
Capital Stock, to repay Indebtedness owed to the Borrower or any other
Subsidiary, to make loans or advances to the Borrower or any other Subsidiary,
or to transfer any of its assets or properties to the Borrower or any other
Subsidiary, in each case other than such restrictions or encumbrances existing
under or by reason of the Credit Documents or applicable Requirements of Law.
4.20 Certain Matters.
41
(a) Neither the Borrower or any Subsidiary is a Person whose property or
interests in property are blocked or subject to blocking pursuant to Section 1
of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism
(66 Fed. Reg. 49079 (2001)), nor does the Borrower or any Subsidiary, to the
knowledge of the Borrower, engage in any dealings or transactions prohibited by
Section 2 of such Executive Order, or otherwise associate with any such Person
in any manner violative of Section 2 of such Executive Order.
(b) No part of the proceeds of the Loans hereunder will be used, directly
or indirectly, for any payments to any governmental official or employee,
political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended.
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, until the termination of the
Commitments and the payment in full of all principal and interest with respect
to the Loans together with all other amounts then due and owing hereunder (other
than contingent and indemnification obligations not then due and payable):
5.1 Financial Statements and Reports. The Borrower will furnish to the
Lenders:
(a) As soon as available and in any event within sixty-five (65) days
after the end of each fiscal year of the Borrower, the consolidated financial
statements of the Borrower and its Subsidiaries consisting of at least
statements of earnings, cash flow and changes in common stockholders' equity,
and a consolidated balance sheet of the Borrower and its Subsidiaries as at the
end of such year, setting forth in each case in comparative form corresponding
figures from the previous annual audit, certified without qualification by KPMG
LLP or other independent certified public accountants of recognized national
standing selected by the Borrower and acceptable to the Administrative Agent.
(b) Together with the audited financial statements required under SECTION
5.1(a), (i) a statement by the accounting firm performing such audit to the
effect that it has reviewed this Agreement and that in the course of performing
its examination nothing came to its attention that caused it to believe that any
Default or Event of Default exists, insofar as such Default or Event of Default
relates to accounting matters, or, if such Default or Event of Default exists,
describing its nature, and (ii) a Compliance Certificate executed by a Financial
Officer of the Borrower, together with a Covenant Compliance Worksheet
reflecting the computation of the financial covenants set forth in ARTICLE VI as
of the last day of the period covered by such financial statements.
(c) As soon as available and in any event within forty-five (45) days (or,
if earlier, the 5th day following the deadline for filing a quarterly report
with the Securities and Exchange Commission) after the end of each of the first
three fiscal quarters of each fiscal year, unaudited consolidated statements of
earnings and cash flow for the Borrower and its Subsidiaries for such
42
quarter and (in the case of the second and third quarters) for the period from
the beginning of such fiscal year to the end of such quarter, and a consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such
quarter, setting forth in comparative form figures for the corresponding period
for the preceding fiscal year, accompanied by a certificate signed by the a
Financial Officer of the Borrower stating that such unaudited interim financial
statements do not contain any footnote disclosures and are subject to normal
recurring year-end adjustments, but otherwise present fairly in all material
respects the consolidated financial condition and consolidated results of
operations of the Borrower and its Subsidiaries as of the dates and for the
periods indicated therein except as otherwise set forth therein.
(d) At the time of delivery of the unaudited consolidated financial
statements of the Borrower and its Subsidiaries for each of the first three
fiscal quarters of each fiscal year of the Borrower, a Compliance Certificate
executed by a Financial Officer of the Borrower, together with a Covenant
Compliance Worksheet reflecting the computation of the financial covenants set
forth in ARTICLE VI as of the last day of the period covered by such financial
statements.
(e) Within seventy-five (75) days after the end of each year, the annual
Statutory Statement of each Insurance Subsidiary for such year as filed with the
applicable Insurance Regulatory Authority.
(f) Within sixty (60) days after the end of each of the first three
quarterly periods of each year, the quarterly Statutory Statement of each
Insurance Subsidiary for such quarter as filed with the applicable Insurance
Regulatory Authority.
(g) As soon as practicable and in any event within seven (7) days after
each calendar month end, a Verification Report dated as of the date of such
calendar month end, provided, that such Verification Report shall only be
required to be furnished if Loans are outstanding as of any such calendar month
end.
(h) Upon request of the Administrative Agent, but not more than one time
per calendar month, an additional Verification Report (in addition to the
Verification Report specified in SECTION 5.1(g)), dated as of the date specified
by the Administrative Agent, to be provided within seven (7) days after such
request, provided, that such Verification Report shall only be required to be
furnished if Loans are outstanding as of the time of the Administrative Agent's
request.
(i) Promptly upon any officer of the Borrower becoming aware of any
Default or Event of Default, a notice describing the nature thereof and what
action the Borrower proposes to take with respect thereto.
(j) Promptly upon any officer of the Borrower becoming aware of the
occurrence, with respect to any Plan, of any Reportable Event, a notice
specifying the nature thereof and what action the Borrower proposes to take with
respect thereto, and, when received, copies of any notice from PBGC of its
intention to terminate or have a trustee appointed for any Plan.
(k) Promptly upon the mailing or filing thereof, copies of all financial
statements, reports and proxy statements mailed to the Borrower's shareholders,
and copies of all registration
43
statements, periodic reports and other documents filed with the Securities and
Exchange Commission (or any successor thereto) or any national securities
exchange.
(l) Within five (5) days after the receipt thereof by the Borrower, any
written communication from any Insurance Regulatory Authority that threatens
issuance of an order of conservation, supervision, rehabilitation or liquidation
in respect of any Material Insurance Subsidiary;
(m) Promptly upon the occurrence of any downgrade in (y) the rating given
by either Standard & Poor's or Xxxxx'x with respect to the Borrower or any
Insurance Subsidiary's claims paying ability, financial strength rating or
Indebtedness; or (z) the rating given to any Insurance Subsidiary by A.M. Best
Company;
(n) From time to time, such other information regarding the business,
operation and financial condition of the Borrower and the Subsidiaries as any
Lender may reasonably request.
5.2 Continued Existence. The Borrower will maintain, and cause each
Material Subsidiary to maintain, its existence in good standing under the laws
of its jurisdiction of formation and its qualification to transact business in
each jurisdiction where failure so to qualify would permanently preclude the
Borrower or such Material Subsidiary from enforcing its rights with respect to
any material asset or would expose the Borrower or such Material Subsidiary to
any material liability; provided, however, that nothing herein shall prohibit
the merger or liquidation of any Subsidiary permitted under SECTION 7.1.
5.3 Insurance. The Borrower shall maintain, and shall cause each Material
Subsidiary to maintain, with financially sound and reputable insurance companies
such insurance as may be required by law and such other insurance in such
amounts and against such hazards as is customary in the case of reputable firms
engaged in the same or similar business and similarly situated; provided,
however, that, in lieu of or supplemental to any insurance referred to in this
SECTION 5.3, the Borrower or such Material Subsidiary may adopt such other plan
or method of protection in respect of its properties or other risks, whether by
establishment of an insurance fund or reserve or by otherwise conforming to the
practices of similar corporations maintaining systems of self insurance, as may
be determined by the Borrower or such Material Subsidiary in its reasonable
business judgment.
5.4 Payment of Taxes and Claims. The Borrower shall file, and cause each
Subsidiary to file (or join in filing), all federal income tax returns and all
other material tax returns and reports which are required by law to be filed by
it and will pay, and cause each Subsidiary to pay, before they become delinquent
all material taxes, assessments and governmental charges and levies imposed upon
it or its property and all claims or demands of any kind (including but not
limited to those of suppliers, mechanics, carriers, warehouses, landlords and
other like Persons) which, if unpaid, might result in the creation of a Lien
upon its property; provided that the foregoing items need not be paid if they
are being contested in good faith by appropriate proceedings, and as long as the
Borrower's or such Subsidiary's title to its property is not affected in a
manner which would be reasonably expected to have a Material Adverse Effect, its
use of such property in the ordinary course of its business is not interfered
with in a manner which would be reasonably expected to have a Material Adverse
Effect and
44
adequate reserves with respect thereto have been set aside on the Borrower's or
such Subsidiary's books in accordance with GAAP.
5.5 Inspection. The Borrower shall permit any Person designated by the
Administrative Agent or the Required Lenders to visit and inspect any of the
properties, corporate books and financial records of the Borrower and the
Subsidiaries, to examine and to make copies of the books of accounts and other
financial records of the Borrower and the Subsidiaries, and to discuss the
affairs, finances and accounts of the Borrower and the Subsidiaries with, and to
be advised as to the same by, its officers at such reasonable times and
intervals as the Administrative Agent or the Required Lenders may designate. So
long as no Event of Default exists, the expenses of the Administrative Agent or
the Lenders for such visits, inspections and examinations shall be at the
expense of the Administrative Agent and the Lenders, but any such visits,
inspections and examinations made while any Event of Default is continuing shall
be at the expense of the Borrower.
5.6 Maintenance of Properties. The Borrower will maintain, and cause each
Material Subsidiary to maintain, its properties used or useful in the conduct of
its business in good condition, repair and working order, and supplied with all
necessary equipment, and make all necessary repairs, renewals, replacements,
betterments and improvements thereto, all as may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this SECTION 5.6
shall prevent the Borrower or any Material Subsidiary from discontinuing the
maintenance of any of its properties if such discontinuance is, in the judgment
of the Board of Directors of the Borrower or in the judgment of the Board of
Directors of such Material Subsidiary, desirable in the conduct of the business
of the Borrower or such Material Subsidiary.
5.7 Books and Records. The Borrower will keep, and will cause each
Material Subsidiary to keep, adequate and proper records and books of account in
which full and correct entries will be made of its dealings, business and
affairs.
5.8 Compliance. The Borrower will comply, and will cause each Material
Subsidiary to comply, in all material respects with all Requirements of Laws to
which it or its properties may be subject; provided, however, that failure so to
comply shall not be a breach of this covenant if such failure does not have, and
would not be reasonably expected to have, a Material Adverse Effect and the
Borrower or such Material Subsidiary is acting in good faith and with reasonable
dispatch to cure such noncompliance.
5.9 PATRIOT Act Compliance. The Borrower will provide, to the extent
commercially reasonable, such information and take such actions as are
reasonably requested by the Administrative Agent or any Lender in order to
assist the Administrative Agent and the Lenders in maintaining compliance with
the PATRIOT Act.
5.10 Notice of Litigation. The Borrower will give prompt written notice to
the Administrative Agent of the commencement of any action, suit or proceeding
before any court or arbitrator or any governmental department, board, agency or
other instrumentality affecting the Borrower or any Subsidiary or any property
of the Borrower or a Subsidiary or to which the Borrower or a Subsidiary is a
party in which an adverse determination or result would be
45
reasonably expected to have a Material Adverse Effect, stating the nature and
status of such action, suit or proceeding.
5.11 ERISA. The Borrower will maintain, and cause each Subsidiary to
maintain, each Plan in substantial compliance with all material applicable
requirements of ERISA and of the Internal Revenue Code and with all material
applicable rulings and regulations issued under the provisions of ERISA and of
the Internal Revenue Code and will not, and will not permit any of the ERISA
Affiliates to (a) engage in any transaction in connection with which the
Borrower or any of the ERISA Affiliates would be subject to either a civil
penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section
4975 of the Internal Revenue Code, in either case in an amount which would be
reasonably expected to have a Material Adverse Effect, (b) fail to make full
payment when due of all amounts which, under the provisions of any Plan, the
Borrower or any ERISA Affiliate is required to pay as contributions thereto, or
permit to exist any accumulated funding deficiency (as such term is defined in
Section 302 of ERISA and Section 412 of the Internal Revenue Code), whether or
not waived, with respect to any Plan in an aggregate amount which would be
reasonably expected to have a Material Adverse Effect or (c) fail to make any
payments to any Multiemployer Plan that the Borrower or any of the ERISA
Affiliates may be required to make under any agreement relating to such
Multiemployer Plan or any law pertaining thereto in an aggregate amount that
would be reasonably expected to have a Material Adverse Effect.
5.12 Environmental Matters; Reporting. The Borrower will observe and
comply with, and cause each Subsidiary to observe and comply with, all laws,
rules, regulations and orders of any government or government agency relating to
health, safety, pollution, hazardous materials or other environmental matters
except to the extent that non-compliance would not be reasonably expected to
have a Material Adverse Effect. The Borrower will give the Administrative Agent
prompt written notice of the occurrence of any of the following: (i) the
assertion of any Environmental Claim against or affecting the Borrower or any
Subsidiary or any real property leased, operated or owned by the Borrower or any
Subsidiary, or the discovery by the Borrower or any Subsidiary of a basis for
any such Environmental Claim; (ii) the receipt by the Borrower or any Subsidiary
of notice of any alleged violation of or noncompliance with any Environmental
Laws or release of any Hazardous Substance; or (iii) the taking of any
investigation, remediation or other responsive action by the Borrower or any
Subsidiary or any other Person in response to the actual or alleged violation of
any Environmental Law by the Borrower or any Subsidiary or generation, storage,
transport, release, disposal or discharge of any Hazardous Substances on, to,
upon or from any real property leased, operated or owned by the Borrower or any
Subsidiary; but in each case under clauses (i), (ii) and (iii) above, only to
the extent the same would be reasonably expected to have a Material Adverse
Effect.
ARTICLE VI
FINANCIAL COVENANTS
The Borrower covenants and agrees that, until the termination of the
Commitments and the payment in full of all principal and interest with respect
to the Loans together with all other amounts then due and owing hereunder:
46
6.1 Maximum Total Indebtedness to Total Capitalization. The ratio of Total
Indebtedness to Total Capitalization as of the last day of any fiscal quarter
beginning with the fiscal quarter ending June 30, 2004 shall not be greater than
0.25 to 1.0.
6.2 Minimum Debt Coverage Ratio. The Borrower will not permit at any time
the Minimum Debt Coverage Ratio to be less than 1.00 to 1.00.
6.3 Required Liquid Assets. The Borrower will at all times maintain the
Required Liquid Assets.
6.4 Minimum Tangible Net Worth. The Borrower will not permit its Tangible
Net Worth, calculated as of the last day of each fiscal quarter, to be less than
the sum of (i) $1,110,000,000, plus (ii) $10,000,000 per fiscal quarter for each
fiscal quarter commencing on or after July 1, 2004, and ended at the time of
determination.
ARTICLE VII
NEGATIVE COVENANTS
The Borrower covenants and agrees that, until the termination of the
Commitments and the payment in full of all principal and interest with respect
to the Loans together with all other amounts then due and owing hereunder:
7.1 Merger. The Borrower will not, and will not permit or cause any of its
Subsidiaries to, merge or consolidate or enter into any analogous reorganization
or transaction with any Person or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution) or agree to do any of the foregoing;
except:
(a) any Subsidiary may be merged with or liquidated into the Borrower or
any Wholly Owned Subsidiary (if the Borrower or such Wholly Owned Subsidiary is
the surviving corporation);
(b) the Borrower or any Subsidiary may consolidate with or merge into any
other corporation, or permit any corporation to merge into it if:
(i) the surviving corporation shall be the Borrower or such
Subsidiary and, if the surviving corporation is a Subsidiary, the Borrower
shall maintain Control of such Subsidiary;
(ii) as of the date twenty (20) Business Days prior to the execution
of the agreement providing for such merger, the fair value of the
consideration to be paid in connection therewith does not exceed (x) in
the case of a merger involving the Borrower, the greater of (A)
$50,000,000 or (B) ten percent (10%) of the consolidated assets of the
Borrower, (y) in the case of a merger involving Mineral Holdings, the
greater of (A) $50,000,000 or (B) ten percent (10%) of the consolidated
assets of Mineral Holdings, or (z) in the case of a merger involving AIHL,
the greater of (A) $50,000,000 or (B) ten percent (10%) of the
consolidated assets of AIHL. For the purposes of this
47
SECTION 7.1(b)(ii), the consideration to be paid in connection with any
merger shall be valued as provided in the last sentence of SECTION 1.2;
and
(iii) no Event of Default or Default hereunder has occurred and is
continuing or would occur upon the consummation of any such consolidation
or merger; and
(c) any Subsidiary may merge or consolidate or enter into an analogous
reorganization or transaction with another Person as part of a disposition of
assets permitted by SECTION 7.2 hereof.
7.2 Disposition of Assets. The Borrower will not directly or indirectly
sell, assign, lease, convey, transfer or otherwise dispose of (whether in one
transaction or a series of transactions) any property (including accounts and
notes receivable, with or without recourse, and Capital Stock of Subsidiaries)
or enter into any agreement to do any of the foregoing, except:
(a) dispositions of inventory, or used, worn-out or surplus equipment, all
in the ordinary course of business;
(b) the sale of equipment to the extent that such equipment is exchanged
for credit against the purchase price of similar replacement equipment, or the
proceeds of such sale are applied with reasonable promptness to the purchase
price of such replacement equipment; and
(c) other sales, leases, transfers or other dispositions of property by
the Borrower (including Capital Stock of Subsidiaries) whose net book value in
the aggregate does not exceed fifty percent (50%) of the Borrower's consolidated
assets as shown on its balance sheet for its most recent prior fiscal quarter so
long as no Default or Event of Default has occurred and is continuing or would
result therefrom; provided, that, absent the written consent of the Required
Lenders, the Borrower shall not sell, lease, transfer or otherwise dispose of
any of the Capital Stock of Mineral Holdings or AIHL, except that the written
consent of the Required Lenders to such sale, lease, transfer or other
disposition of any of the Capital Stock of Mineral Holdings or AIHL shall not be
required (i) for any issuances of Capital Stock by Mineral Holdings in
connection with employee compensation and incentive arrangements, or (ii) to the
extent that the proceeds therefrom are used to reduce ratably the Commitments
under this Agreement (whereupon in the event that the aggregate principal amount
of Loans outstanding at such time shall exceed the aggregate Commitments at such
time after giving effect to such reduction, the Borrower will immediately prepay
the outstanding principal amount of the Loans in the amount of such excess in
accordance with SECTION 2.6(a) of this Agreement), nor shall the Borrower,
absent the written consent of the Required Lenders, (i) permit Mineral Holdings,
directly or indirectly, to sell, lease, transfer or otherwise dispose of any
properties or assets, tangible or intangible, now owned or hereafter acquired,
representing more than fifty percent (50%) of the consolidated assets of Mineral
Holdings as shown on its balance sheet for the most recent prior fiscal quarter,
or (ii) permit AIHL, directly or indirectly, to sell, lease, transfer or
otherwise dispose of any properties or assets, tangible or intangible, now owned
or hereafter acquired, representing more than fifty percent (50%) of the
consolidated assets of AIHL as shown on its balance sheet for the most recent
prior fiscal quarter.
48
7.3 Plans. The Borrower will not permit, and will not allow any Subsidiary
to permit, any event to occur or condition to exist which would permit any Plan
to terminate under any circumstances which would cause the Lien provided for in
Section 4068 of ERISA to attach to any assets of the Borrower or any Subsidiary
if such Lien would be reasonably expected to have a Material Adverse Effect; and
the Borrower will not permit, as of the most recent valuation date for any Plan
subject to Title IV of ERISA, the present value (determined on the basis of
reasonable assumptions employed by the independent actuary for such Plan and
previously furnished in writing to the Lenders) of such Plan's projected benefit
obligations to exceed the fair market value of such Plan's assets by an amount
which would be reasonably expected to have a Material Adverse Effect.
7.4 Negative Pledges. Except for restrictions for the benefit of the
holder of any Lien that is permitted by SECTION 7.10 hereof which restriction
relates solely to the property which is the subject of such Lien, the Borrower
will not enter into any agreement, bond, note or other instrument with or for
the benefit of any Person other than the Lenders which would (i) prohibit the
Borrower from granting, or otherwise limit the ability of the Borrower to grant,
to the Lenders any Lien on any assets or properties of the Borrower, except for
the provisions of the Mellon Credit Agreement or (ii) require the Borrower to
xxxxx x Xxxx to any other Person if the Borrower grants any Lien to the Lenders.
7.5 Restricted Payments. The Borrower will not make any Restricted
Payments, unless:
(a) after giving effect thereto, the aggregate of all Restricted Payments
declared or paid on the Borrower's Capital Stock subsequent to December 31,
2003, shall be less than the sum of (i) the Borrower's net earnings subsequent
to December 31, 2003, (ii) the cash proceeds received by the Borrower from the
issuance of any shares of its Capital Stock after December 31, 2003, and (iii)
$50,000,000; and
(b) no Event of Default or Default has occurred and is continuing or would
occur as a result of the declaration or payment of a Restricted Payment.
7.6 Transactions with Affiliates. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction with any Affiliate of the
Borrower (other than the Borrower or a Subsidiary of the Borrower), except upon
terms no less favorable to the Borrower, or such Subsidiary, than those that
would be reasonably expected to be obtained in a comparable arm's-length
transaction with a Person not an Affiliate.
7.7 Accounting Changes. The Borrower will not make any significant change
in accounting treatment or reporting practices, except as permitted by GAAP, or
change its fiscal year.
7.8 Subordinated Indebtedness. The Borrower will not (a) make any
scheduled payment of the principal of or interest on any Subordinated
Indebtedness which would be prohibited by the terms of such Subordinated
Indebtedness and any related subordination agreement; or (b) amend or cancel the
subordination provisions applicable to any Subordinated Indebtedness.
49
7.9 Indebtedness. The Borrower will not incur, create, issue, assume or
suffer to exist any Indebtedness, except:
(a) The Obligations;
(b) Current Liabilities, other than for borrowed money, incurred in the
ordinary course of business;
(c) Indebtedness existing on the date of this Agreement and disclosed on
SCHEDULE 7.9, including any extension or refinancing thereof (including, in the
case of Indebtedness which is a Contingent Obligation, any extension or
refinancing of the supported obligation), but not including any increase in the
principal amount thereof (or, in the case of Indebtedness which is a Contingent
Obligation, any increase in the amount of the supported obligation);
(d) Indebtedness secured by Liens permitted under SECTION 7.10 hereof;
(e) Permitted Intercompany Indebtedness;
(f) Indebtedness the proceeds of which are used to refinance, in whole or
in part, the Obligations, in which event the aggregate amount of the Lender's
Commitments shall be reduced by a like amount; and
(g) Indebtedness, other than Indebtedness included in any of SECTIONS
7.9(a) through (f), in an aggregate amount outstanding at any time not to exceed
an amount equal to the remainder of (i) $125,000,000 minus (ii) Indebtedness
under the Mellon Credit Agreement (including the stated amount of letters of
credit issued thereunder).
7.10 Liens. The Borrower will not create, incur, assume or suffer to exist
any Lien, or enter into, or make any commitment to enter into, any arrangement
for the acquisition of any property through conditional sale, lease-purchase or
other title retention agreements, with respect to any property now owned or
hereafter acquired by the Borrower, except:
(a) Liens existing on the date of this Agreement and disclosed on SCHEDULE
7.10;
(b) Any Lien extending, renewing or replacing any Lien permitted by
SECTION 7.10(a) above, provided that such Lien may relate solely to the property
subject thereto as of the date hereof and provided further that such Lien may
secure only (i) the Indebtedness secured by such Lien as of the date hereof or
(ii) Indebtedness extending, replacing or renewing such Indebtedness the
incurrence of which is permitted by SECTION 7.9 hereof;
(c) Deposits or pledges to secure payment of workers' compensation,
unemployment insurance, old age pensions or other social security obligations,
in the ordinary course of business of the Borrower;
(d) Liens for taxes, fees, assessments and governmental charges not
delinquent or to the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of SECTION 5.4;
50
(e) Liens of carriers, warehousemen, mechanics and materialmen, and other
like Liens arising in the ordinary course of business, for sums not due or to
the extent that payment therefor shall not at the time be required to be made in
accordance with the provisions of SECTION 5.4;
(f) Liens incurred or deposits or pledges made or given in connection
with, or to secure payment of, indemnity, performance or other similar bonds;
(g) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution, or security interests retained by depositary banks
pursuant to their standard banking services agreements; provided that (i) such
deposit account is not a dedicated cash collateral account and is not subject to
restriction against access by the Borrower in excess of those set forth by
regulations promulgated by the Federal Reserve Board, and (ii) such deposit
account is not intended by the Borrower to provide collateral to the depository
institution;
(h) Encumbrances in the nature of zoning restrictions, easements and
rights or restrictions of record on the use of real property and landlord's
Liens under leases on the premises rented, which do not materially detract from
the value of such property or impair the use thereof in the business of the
Borrower;
(i) The interest of any lessor under any Capital Lease entered into after
the Closing Date or purchase money Liens on property acquired after the Closing
Date; provided, that, (i) the Indebtedness secured thereby is otherwise
permitted by this Agreement and (ii) such Liens are limited to the property
acquired and do not secure Indebtedness other than the related Capital Lease
Obligations or the purchase price of such property; and
(j) Liens, other than Liens included in any of SECTIONS 7.10(a) through
(i), that secure in the aggregate obligations not in excess of an amount equal
to five percent (5%) of the Tangible Net Worth of the Borrower, provided, that
during such time as the Mellon Credit Agreement shall include the negative
pledge described and permitted under SECTION 7.4 hereof, Liens securing
creditors other than Mellon Bank, N.A. in its capacity as Issuing Bank under the
Mellon Credit Agreement shall not secure in the aggregate obligations in excess
of the remainder of (i) five percent (5%) of the Tangible Net Worth of the
Borrower, less (ii) the aggregate face amount of letters of credit or other
principal amount of credit that may be extended to the Borrower under the Mellon
Credit Agreement.
7.11 Loan Proceeds. The Borrower will not use any part of the proceeds of
any Loan directly or indirectly, and whether immediately, incidentally or
ultimately for any purpose which entails a violation of the provisions of
Regulations T, U and X.
7.12 Rental Obligations. The Borrower will not incur, create or assume any
rental obligation for real or personal property under any lease, rental or other
arrangements for the use of property of any other person if the aggregate
present value of such fixed rental obligations for such personalty and realty
(including such rental obligations currently in effect) of the Borrower would,
at any time, exceed $20,000,000. For purposes of this SECTION 7.12, rental
obligations
51
shall mean any commitment to make any direct or indirect payment, whether as
rent or otherwise, under any lease or rental of personal property or other
arrangements for the use of personal property of others and any such payment
made in advance, but rental obligations shall not include any amounts payable
under any Capital Lease which constitutes Indebtedness for the purposes of
SECTION 7.9. Any determination of present value made for purposes of this
SECTION 7.12 shall use a discount rate equal to the Federal Funds Rate at the
date of determination.
7.13 Mellon Credit Agreement. The Borrower will not amend, modify or
change Section 6.10 of the Mellon Credit Agreement without the prior written
consent of the Administrative Agent.
ARTICLE VIII
EVENTS OF DEFAULT
8.1 Events of Default. The occurrence of any one or more of the following
events shall constitute an "Event of Default":
(a) The Borrower shall fail to make (i) when due, whether by acceleration
or otherwise, any payment of principal of any Loan or (ii) within two days after
the applicable due date, any payment of interest on any Loan or payment of any
other Obligation required to be made to the Administrative Agent or any Lender
pursuant to this Agreement; or
(b) Any representation or warranty made by the Borrower in this Agreement
or any other Credit Document or by the Borrower in any certificate, statement,
report or document herewith or hereafter furnished to any Lender or the
Administrative Agent pursuant to this Agreement or any other Credit Document
shall prove to have been false or misleading in any material respect on the date
as of which the facts set forth are stated or certified; or
(c) The Borrower shall fail to comply with SECTION 5.2 hereof, or any
Section of ARTICLE VI or ARTICLE VII hereof; or
(d) The Borrower shall fail to comply with any other agreement, covenant,
condition, provision or term contained in this Agreement (other than those
hereinabove set forth in this SECTION 8.1) and such failure to comply shall
continue for fifteen (15) calendar days after whichever of the following dates
is the earliest: (i) the date the Borrower gives notice of such failure to the
Lenders, (ii) the date the Borrower should have given notice of such failure to
the Lenders pursuant to SECTION 5.1(i), or (iii) the date the Administrative
Agent or any Lender gives notice of such failure to the Borrower; or
(e) The Borrower or any Material Subsidiary shall become insolvent or
shall generally not pay its debts as they mature or shall apply for, shall
consent to, or shall acquiesce in the appointment of a custodian, trustee or
receiver of the Borrower or such Material Subsidiary or for a substantial part
of the property thereof or, in the absence of such application, consent or
acquiescence, a custodian, trustee or receiver shall be appointed for the
Borrower or a Material Subsidiary or for a substantial part of the property
thereof and shall not be discharged within forty five (45) days, or the Borrower
or any Material Subsidiary shall make an assignment for the benefit of
creditors; or
52
(f) Any bankruptcy, reorganization, debt arrangement or other proceedings
under the Bankruptcy Code or insolvency law shall be instituted by or against
the Borrower or any Material Subsidiary, and, if instituted against the Borrower
or any Material Subsidiary, shall have been consented to or acquiesced in by the
Borrower or such Material Subsidiary, or shall remain undismissed for forty five
(45) days, or an order for relief shall have been entered against the Borrower
or such Material Subsidiary; or
(g) Any dissolution or liquidation proceeding not permitted by SECTION 7.1
shall be instituted by or against the Borrower or a Material Subsidiary, and, if
instituted against the Borrower or any Material Subsidiary, shall be consented
to or acquiesced in by the Borrower or such Material Subsidiary or shall remain
for forty five (45) days undismissed; or
(h) A judgment or judgments for the payment of money in excess of the sum
of $5,000,000 in the aggregate shall be rendered against the Borrower or a
Material Subsidiary and either (i) the judgment creditor executes on such
judgment or (ii) such judgment remains unpaid or undischarged, unless stayed,
for more than forty-five (45) days from the date of entry thereof or more than
sixty (60) days from the last day that execution of such judgment shall have
been stayed during an appeal from such judgment; or
(i) The maturity of any material Indebtedness of the Borrower (other than
Indebtedness under this Agreement) or any Subsidiary shall be accelerated, or
the Borrower or any Subsidiary shall fail to pay any such material Indebtedness
when due (after the lapse of any applicable grace period) or, in the case of
such Indebtedness payable on demand, when demanded (after the lapse of any
applicable grace period), or any event shall occur or condition shall exist and
shall continue for more than the period of grace, if any, applicable thereto and
shall have the effect of causing, or permitting the holder of any such
Indebtedness or any trustee or other Person acting on behalf of such holder to
cause, such material Indebtedness to become due prior to its stated maturity or
to realize upon any collateral given as security therefor. For purposes of this
SECTION 8.1(i), Indebtedness of the Borrower or a Material Subsidiary shall be
deemed "material" if it exceeds $5,000,000 as to any item of Indebtedness or in
the aggregate for all items of Indebtedness with respect to which any of the
events described in this SECTION 8.1(I) has occurred; or
(j) Any execution or attachment shall be issued whereby any substantial
part of the property of the Borrower or any Material Subsidiary shall be taken
or attempted to be taken and the same shall not have been vacated or stayed
within thirty (30) days after the issuance thereof. For purposes of this SECTION
8.1(j), a portion of the property of any Person shall be deemed "substantial" if
its value exceeds $5,000,000 as to any one portion of such Person's property or
in the aggregate for all portions of such Person's property with respect to
which any of the events described in this SECTION 8.1(j) has occurred; or
(k) Any Change of Control shall occur; or
(l) Any Insurance Regulatory Authority or other Governmental Authority
having jurisdiction shall issue any order of conservation, supervision,
rehabilitation or liquidation in respect of any Material Insurance Subsidiary.
53
8.2 Remedies: Termination of Commitments, Acceleration, etc.
Upon and at any time after the occurrence and during the continuance of
any Event of Default, the Administrative Agent shall at the direction, or may
with the consent, of the Required Lenders, take any or all of the following
actions at the same or different times:
(a) Declare the Commitments to be terminated, whereupon the same shall
terminate; provided that, upon the occurrence of a Bankruptcy Event, the
Commitments shall automatically be terminated;
(b) Declare all or any part of the outstanding principal amount of the
Loans to be immediately due and payable, whereupon the principal amount so
declared to be immediately due and payable, together with all interest accrued
thereon and all other amounts payable under this Agreement and the other Credit
Documents, shall become immediately due and payable without presentment, demand,
protest, notice of intent to accelerate or other notice or legal process of any
kind, all of which are hereby knowingly and expressly waived by the Borrower;
provided that, upon the occurrence of a Bankruptcy Event, all of the outstanding
principal amount of the Loans and all other amounts described in this SECTION
8.2(b) shall automatically become immediately due and payable without
presentment, demand, protest, notice of intent to accelerate or other notice or
legal process of any kind, all of which are hereby knowingly and expressly
waived by the Borrower; and
(c) Exercise all rights and remedies available to it under this Agreement,
the other Credit Documents and applicable law.
8.3 Remedies: Set-Off. In addition to all other rights and remedies
available under the Credit Documents or applicable law or otherwise, upon and at
any time after the occurrence and during the continuance of any Event of
Default, each Lender or any of its Affiliates may, and each is hereby authorized
by the Borrower to, at any such time and from time to time, to the fullest
extent permitted by applicable law, without presentment, demand, protest or
other notice of any kind, all of which are hereby knowingly and expressly waived
by the Borrower, set off and apply any and all deposits (general or special,
time or demand, provisional or final) and any other property at any time held
(including at any branches or agencies, wherever located), and any other
indebtedness at any time owing, by such Lender or Affiliate to or for the credit
or the account of the Borrower against any or all of the Obligations to such
Lender or Affiliate now or hereafter existing, whether or not such Obligations
may be matured or unmatured. Each Lender agrees promptly to notify the Borrower
and the Administrative Agent after any such set-off and application; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application.
ARTICLE IX
THE ADMINISTRATIVE AGENT
9.1 Appointment. Each Lender hereby irrevocably appoints and authorizes
Wachovia to act as Administrative Agent hereunder and under the other Credit
Documents and to take such actions as agent on its behalf hereunder and under
the other Credit Documents, and to exercise such powers and to perform such
duties, as are specifically delegated to the Administrative
54
Agent by the terms hereof or thereof, together with such other powers and duties
as are reasonably incidental thereto. The provisions of this Article are solely
for the benefit of the Administrative Agent and the Lenders, and neither the
Borrower, any of its Affiliates nor any other Person shall have any rights as a
third party beneficiary of any of such provisions.
9.2 Nature of Duties. The Administrative Agent shall have no duties or
responsibilities other than those expressly set forth in this Agreement and the
other Credit Documents. The Administrative Agent shall not have, by reason of
this Agreement or any other Credit Document, a fiduciary relationship in respect
of any Lender or any other Person; and nothing in this Agreement or any other
Credit Document, express or implied, is intended to or shall be so construed as
to impose upon the Administrative Agent any obligations or liabilities in
respect of this Agreement or any other Credit Document except as expressly set
forth herein or therein. The Administrative Agent may execute any of its duties
under this Agreement or any other Credit Document by or through agents or
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact that it selects with reasonable care. The
Administrative Agent shall be entitled to consult with legal counsel,
independent public accountants and other experts selected by it with respect to
all matters pertaining to this Agreement and the other Credit Documents and its
duties hereunder and thereunder and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts. The Lenders hereby acknowledge that the
Administrative Agent shall not be under any duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Credit Document unless it shall be requested in writing to do so by
the Required Lenders (or, where a higher percentage of the Lenders is expressly
required hereunder, such Lenders).
9.3 Exculpatory Provisions. Neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action taken or omitted to be taken by it or such
Person under or in connection with the Credit Documents, except for its or such
Person's own gross negligence or willful misconduct, (ii) responsible in any
manner to any Lender or any other Person for any recitals, statements,
information, representations or warranties herein or in any other Credit
Document or in any document, instrument, certificate, report or other writing
delivered in connection herewith or therewith, for the execution, effectiveness,
genuineness, validity, enforceability or sufficiency of this Agreement or any
other Credit Document, or for the financial condition of the Borrower, its
Subsidiaries or any other Person, or (iii) required to ascertain or make any
inquiry concerning the performance or observance of any of the terms, provisions
or conditions of this Agreement or any other Credit Document or the existence or
possible existence of any Default or Event of Default, or to inspect the
properties, books or records of the Borrower or any of its Subsidiaries.
9.4 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any notice,
statement, consent or other communication (including, without limitation, any
thereof by telephone, telecopy, telex, telegram or cable) believed by it in good
faith to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons. The Administrative Agent may deem and treat each
Lender as the owner of its interest hereunder for all purposes hereof unless and
until a written notice of the assignment, negotiation or transfer thereof shall
have been given to the Administrative Agent in accordance with the provisions of
this Agreement. The Administrative
55
Agent shall be entitled to refrain from taking or omitting to take any action in
connection with this Agreement or any other Credit Document (i) if such action
or omission would, in the reasonable opinion of the Administrative Agent,
violate any applicable law or any provision of this Agreement or any other
Credit Document or (ii) unless and until it shall have received such advice or
concurrence of the Required Lenders (or, where a higher percentage of the
Lenders is expressly required hereunder, such Lenders) as it deems appropriate
or it shall first have been indemnified to its satisfaction by the Lenders
against any and all liability and expense (other than liability and expense
arising from its own gross negligence or willful misconduct) that may be
incurred by it by reason of taking, continuing to take or omitting to take any
such action. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against the Administrative Agent as a result of the
Administrative Agent's acting or refraining from acting hereunder or under any
other Credit Document in accordance with the instructions of the Required
Lenders (or, where a higher percentage of the Lenders is expressly required
hereunder, such Lenders), and such instructions and any action taken or failure
to act pursuant thereto shall be binding upon all of the Lenders (including all
subsequent Lenders).
9.5 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representation or warranty to it and that no act by the Administrative Agent
or any such Person hereinafter taken, including any review of the affairs of the
Borrower and its Subsidiaries, shall be deemed to constitute any representation
or warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that (i) it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, properties, financial
and other condition and creditworthiness of the Borrower and its Subsidiaries
and made its own decision to enter into this Agreement and extend credit to the
Borrower hereunder, and (ii) it will, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action
hereunder and under the other Credit Documents and to make such investigation as
it deems necessary to inform itself as to the business, prospects, operations,
properties, financial and other condition and creditworthiness of the Borrower
and its Subsidiaries. Except as expressly provided in this Agreement and the
other Credit Documents, the Administrative Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information concerning the business, prospects,
operations, properties, financial or other condition or creditworthiness of the
Borrower, its Subsidiaries or any other Person that may at any time come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
9.6 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
unless the Administrative Agent shall have received written notice from the
Borrower or a Lender referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." In the
event that the Administrative Agent receives such a notice, the Administrative
Agent will give notice thereof to the Lenders as soon as reasonably practicable;
56
provided, however, that if any such notice has also been furnished to the
Lenders, the Administrative Agent shall have no obligation to notify the Lenders
with respect thereto. The Administrative Agent shall (subject to SECTIONS 9.4
and 10.6) take such action with respect to such Default or Event of Default as
shall reasonably be directed by the Required Lenders; 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 except
to the extent that this Agreement expressly requires that such action be taken,
or not be taken, only with the consent or upon the authorization of the Required
Lenders or all of the Lenders.
9.7 Indemnification. To the extent the Administrative Agent is not
reimbursed by or on behalf of the Borrower, and without limiting the obligation
of the Borrower to do so, the Lenders agree (i) to indemnify the Administrative
Agent and its officers, directors, employees, agents, attorneys-in-fact and
Affiliates, ratably in proportion to their respective percentages as used in
determining the Required Lenders as of the date of determination, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including, without limitation,
reasonable attorneys' fees and expenses) or disbursements of any kind or nature
whatsoever that may at any time (including, without limitation, at any time
following the repayment in full of the Loans and the termination of the
Commitments) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of this Agreement or any other
Credit Document or any documents contemplated by or referred to herein or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Administrative Agent under or in connection with any of the foregoing, and
(ii) to reimburse the Administrative Agent upon demand, ratably in proportion to
their respective percentages as used in determining the Required Lenders as of
the date of determination, for any reasonable expenses incurred by the
Administrative Agent in connection with the preparation, negotiation, execution,
delivery, administration, amendment, modification, waiver or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement or any of
the other Credit Documents (including, without limitation, reasonable attorneys'
fees and expenses and compensation of agents and employees paid for services
rendered on behalf of the Administrative Agent hereunder and/or the Lenders);
provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of the party to be indemnified.
9.8 The Administrative Agent in its Individual Capacity. With respect to
its Commitment, the Loans made by it and the Note or Notes issued to it, the
Administrative Agent in its individual capacity and not as Administrative Agent
shall have the same rights and powers under the Credit Documents as any other
Lender and may exercise the same as though it were not performing the agency
duties specified herein; and the terms "Lenders," "Required Lenders" and any
similar terms shall, unless the context clearly otherwise indicates, include the
Administrative Agent in its individual capacity. The Administrative Agent and
its Affiliates may accept deposits from, lend money to, make investments in, and
generally engage in any kind of banking, trust, financial advisory or other
business with the Borrower, any of its Subsidiaries or
57
any of their respective Affiliates as if the Administrative Agent were not
performing the agency duties specified herein, and may accept fees and other
consideration from any of them for services in connection with this Agreement
and otherwise without having to account for the same to the Lenders.
9.9 Successor Agent. The Administrative Agent may resign at any time upon
written notice to the Borrower and the Lenders. Upon any such notice of
resignation, the Required Lenders shall, with the prior written consent of the
Borrower (which consent shall not be unreasonably withheld), have the right to
appoint a successor to the Administrative Agent (provided that the Borrower's
consent shall not be required in the event a Default or Event of Default shall
have occurred and be continuing). If no successor to the Administrative Agent
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within thirty (30) days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders and after consulting with the Lenders and the Borrower,
appoint a successor Administrative Agent which shall be a financial institution
having a rating of not less than "A" or its equivalent by Standard & Poor's or
any of the Lenders. Upon the acceptance of any appointment as Administrative
Agent by a successor Administrative Agent, such successor Administrative Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Credit Documents. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent. If no successor to the
Administrative Agent has accepted appointment as Administrative Agent by the
thirtieth (30th) day following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective, and the Lenders shall thereafter perform all of the
duties of the Administrative Agent hereunder and under the other Credit
Documents until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided for hereinabove.
9.10 Other Agents, Managers. Notwithstanding any other provision of this
Agreement or any of the other Credit Documents, any Lenders identified on the
cover page of this Agreement or elsewhere herein as a "Syndication Agent,"
"Documentation Agent," "Co-Agent," "Lead Manager" or in any similar capacity are
named as such for recognition purposes only, and in their respective capacities
as such shall have no powers, rights, duties, responsibilities or liabilities
with respect to this Agreement and the other Credit Documents and the
transactions contemplated hereby and thereby. Without limitation of the
foregoing, none of the Lenders so identified shall have, by reason of this
Agreement or any other Credit Document, a fiduciary relationship in respect of
any Lender or any other Person. Each Lender hereby makes the same
acknowledgments with respect to any Lenders so identified as it makes in SECTION
9.5 with respect to the Administrative Agent.
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ARTICLE X
MISCELLANEOUS
10.1 Fees and Expenses. The Borrower agrees (i) whether or not the
transactions contemplated by this Agreement shall be consummated, to pay upon
demand (y) the reasonable fees and expenses of counsel to the Administrative
Agent and the Arranger and (z) all reasonable out-of-pocket costs and expenses
of the Administrative Agent and the Arranger, in each case in connection with
their due diligence investigation and the preparation, negotiation, execution,
delivery and syndication of this Agreement and the other Credit Documents and
any interpretation, amendment, waiver, modification or consent in respect hereof
or thereof, (ii) after the occurrence and during the continuance of an Event of
Default, to pay upon demand (y) the reasonable fees and expenses of counsel to
the Administrative Agent and the Arranger and (z) all out-of-pocket costs and
expenses of the Administrative Agent and each Lender, in each case in connection
with (A) any refinancing or restructuring of the credit arrangements provided
under this Agreement, whether in the nature of a "work-out," in any insolvency
or bankruptcy proceeding or otherwise and whether or not consummated, and (B)
the enforcement, attempted enforcement or preservation of any rights or remedies
under this Agreement or any of the other Credit Documents, whether in any
action, suit or proceeding (including any bankruptcy or insolvency proceeding)
or otherwise, and (iii) to pay and hold the Administrative Agent, the Arranger
and each Lender harmless from and against all liability for any intangibles,
documentary, stamp or other similar taxes, fees and excises, if any, including
any interest and penalties, and any finder's or brokerage fees, commissions and
expenses (other than any fees, commissions or expenses of finders or brokers
engaged by the Administrative Agent or any Lender), that may be payable in
connection with the transactions contemplated by this Agreement and the other
Credit Documents.
10.2 Indemnification. The Borrower agrees, whether or not the transactions
contemplated by this Agreement shall be consummated, to indemnify and hold
harmless the Administrative Agent, the Arranger and each Lender, their
respective affiliates and their respective directors, officers, employees,
attorneys, advisors and agents (each, an "Indemnified Person") from and against
any and all claims, losses, damages, obligations, liabilities, penalties, costs
and expenses (including, without limitation, reasonable attorneys' fees and
expenses) of any kind or nature whatsoever, whether direct, indirect or
consequential (collectively, "Indemnified Costs"), that may at any time be
imposed on, incurred by or asserted against any such Indemnified Person as a
result of, arising from or in any way relating to the preparation, execution,
performance, enforcement of or preservation of rights under this Agreement or
any of the other Credit Documents, any of the transactions contemplated herein
or therein or any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loans (including, without
limitation, in connection with the actual or alleged generation, presence,
storage, treatment, disposal, transport, discharge or release of any Hazardous
Substances on, into or from, or the transportation of Hazardous Substances to or
from, any real property at any time owned, operated or leased by the Borrower or
any of its Subsidiaries, any other Environmental Claims or any violation of or
liability under any Environmental Law), or any action, suit or proceeding
(including any inquiry or investigation) by any Person, whether threatened or
initiated, related to any of the foregoing, and in any case whether or not such
Indemnified Person is a party to any such action, proceeding or suit or a
subject of any such
59
inquiry or investigation; provided, however, that no Indemnified Person shall
have the right to be indemnified hereunder for any Indemnified Costs to the
extent determined by a final and nonappealable judgment of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Indemnified Person. All of the foregoing Indemnified Costs of any
Indemnified Person shall be paid or reimbursed by the Borrower, as and when
incurred and upon demand. To the extent permitted by applicable law, the
Borrower shall not assert, and hereby waives, any claim against any Indemnified
Person, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any of the other Credit
Documents, any of the transactions contemplated herein or therein or any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of any Loans.
10.3 Governing Law; Consent to Jurisdiction. THIS AGREEMENT AND THE OTHER
CREDIT DOCUMENTS SHALL (EXCEPT AS MAY BE EXPRESSLY OTHERWISE PROVIDED IN ANY
CREDIT DOCUMENT) BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS (EXCLUDING NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401). THE PARTIES
HERETO HEREBY DECLARE THAT IT IS THEIR INTENTION THAT THIS AGREEMENT SHALL BE
REGARDED AS MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND THAT THE LAWS OF
SAID STATE SHALL BE APPLIED IN INTERPRETING ITS PROVISIONS IN ALL CASES WHERE
LEGAL INTERPRETATION SHALL BE REQUIRED. EACH OF THE PARTIES HERETO AGREES (A)
THAT THIS AGREEMENT INVOLVES AT LEAST $250,000; AND (B) THAT THIS AGREEMENT HAS
BEEN ENTERED INTO BY THE PARTIES HERETO IN EXPRESS RELIANCE UPON NEW YORK
GENERAL OBLIGATIONS LAW SECTION 5-1401. NOTWITHSTANDING THE FOREGOING CHOICE OF
LAW, THE BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE COURT WITHIN MECKLENBURG
COUNTY, NORTH CAROLINA OR NEW YORK COUNTY, NEW YORK OR ANY FEDERAL COURT LOCATED
WITHIN THE WESTERN DISTRICT OF THE STATE OF NORTH CAROLINA OR THE SOUTHERN
DISTRICT OF THE STATE OF NEW YORK FOR ANY PROCEEDING INSTITUTED HEREUNDER OR
UNDER ANY OF THE OTHER CREDIT DOCUMENTS, OR ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, OR ANY PROCEEDING TO WHICH
THE ADMINISTRATIVE AGENT, THE ARRANGER OR ANY LENDER OR THE BORROWER IS A PARTY,
INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN CONNECTION WITH ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF THE ADMINISTRATIVE AGENT, THE ARRANGER OR ANY LENDER OR THE BORROWER.
EACH OF THE PARTIES IRREVOCABLY AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE
RIGHT OF APPEAL) BY ANY JUDGMENT RENDERED OR RELIEF GRANTED THEREBY. THE
BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE BASED ON LACK OF JURISDICTION OR
IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY SUCH PROCEEDING.
EACH PARTY HERETO IRREVOCABLY CONSENTS TO
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SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.5. NOTHING
IN THIS SECTION SHALL AFFECT THE RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, THE
ARRANGER OR ANY LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER IN
THE COURTS OF ANY OTHER JURISDICTION.
10.4 Waiver of Trial by Jury. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ITS RESPECTIVE RIGHTS
TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OF THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY. EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PROPERTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
10.5 Notices. Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other
communications provided for hereunder shall be in writing (including facsimile
transmission) and mailed by certified or registered mail, sent by overnight
delivery, telecopied or delivered by hand to the party to be notified at the
following addresses:
(a) if to the Borrower, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxx X. Xxxxxx, Senior Vice President, Telecopy No.: (000) 000-0000,
with a copy to Xxxxxx X. Xxxx, Senior Vice President and General Counsel,
Telecopy No.: (000) 000-0000;
(b) if to the Administrative Agent, to Wachovia Bank, National
Association, Xxxxxxxxx Xxxxx Xxxxxxxx, XX-00, 000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx XX 00000-0000, Attention: Syndication Agency Services, Telecopy No.:
(000) 000-0000, with a copy to Wachovia Bank, National Association, 00 Xxxx 00xx
Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxx Xxxx, Senior Vice President,
Telecopy No.: (000) 000-0000; and
(c) if to any Lender, to it at the address set forth on SCHEDULE 1.1 (or
if to any Lender not a party hereto as of the date hereof, at the address set
forth in its Assignment and Acceptance);
or in each case, to such other address as any party may designate for itself by
like notice to all other parties hereto. All such notices and communications
shall be deemed to have been given (i) if mailed by certified or registered
mail, on the third Business Day after deposit in the mails, (ii) if sent by
overnight delivery service the first Business Day after delivery to the courier
for overnight delivery, (iii) if transmitted by telecopier, upon confirmation of
receipt, or (iv) if
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delivered by hand, upon delivery; provided that notices and communications to
the Administrative Agent shall not be effective until received by the
Administrative Agent.
10.6 Amendments Waivers, Etc. No amendment, modification, waiver or
discharge or termination of, or consent to any departure by the Borrower from,
any provision of this Agreement or any other Credit Document, shall be effective
unless in a writing signed by the Required Lenders (or by the Administrative
Agent at the direction or with the consent of the Required Lenders), and then
the same shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment,
modification, waiver, discharge, termination or consent shall:
(a) unless agreed to by each Lender directly affected thereby, (i) reduce
or forgive the principal amount of any Loan, reduce the rate of or forgive any
interest thereon, or reduce or forgive any fees or other Obligations (other than
fees payable to the Administrative Agent or the Arranger for their own account),
(ii) extend the Maturity Date or any other scheduled date for the payment of any
principal of or interest on any Loan (including any scheduled date for the
mandatory reduction or termination of any Commitments), any interest on any
Loan, any fees (other than fees payable to the Administrative Agent or the
Arranger for their own account) or any other Obligations, or (iii) increase or
extend any Commitment of any Lender (it being understood that a waiver of any
condition precedent set forth in SECTION 3.2 or of any Default or Event of
Default or mandatory reduction in the Commitments, if agreed to by the requisite
Lenders hereunder, shall not constitute such an increase); and
(b) unless agreed to by all of the Lenders, (i) change the percentage of
the aggregate Commitments or of the aggregate unpaid principal amount of the
Loans, or the number or percentage of Lenders, that shall be required for the
Lenders or any of them to take or approve, or direct the Administrative Agent to
take, any action hereunder (including as set forth in the definition of
"Required Lenders"), or (ii) change any provision of SECTION 2.15 or this
SECTION 10.6;
and provided further that the Fee Letter may be amended or modified, and
any rights thereunder waived, in a writing signed by the parties thereto.
10.7 Assignments, Participations.
(a) Each Lender may assign to one or more banks or other entities (each,
an "Assignee") all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the outstanding Loans made by it, and the Note or Notes held by it); provided,
however, that (i) any such assignment (other than an assignment to a Lender or
an Affiliate of a Lender or an Approved Fund) shall not be made without the
prior written consent of the Administrative Agent and the Borrower (to be
evidenced by their counterexecution of the relevant Assignment and Acceptance),
which consent shall not be unreasonably withheld (provided that the Borrower's
consent shall not be required in the event a Default or Event of Default shall
have occurred and be continuing), (ii) each such assignment shall be of a
uniform, and not varying, percentage of all of the assigning Lender's rights and
obligations under this Agreement, (iii) unless otherwise waived by the Borrower
and the Administrative Agent, except in the case of an assignment to a Lender or
an Affiliate of a
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Lender or an Approved Fund, no such assignment shall be in an aggregate
principal amount (determined as of the date of the Assignment and Acceptance
with respect to such assignment) less than $5,000,000, determined by combining
the amount of the assigning Lender's outstanding Loans and Unutilized Commitment
being assigned pursuant to such assignment (or, if less, the entire Commitment
and Loans of the assigning Lender); and (iv) the parties to each such assignment
will execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note
or Notes subject to such assignment, and will pay a nonrefundable processing fee
of $3,500 to the Administrative Agent for its own account. Upon such execution,
delivery, acceptance and recording of the Assignment and Acceptance, from and
after the effective date specified therein, which effective date shall be at
least five (5) Business Days after the execution thereof (unless the
Administrative Agent shall otherwise agree), (A) the Assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, shall have (in
addition to any rights and obligations theretofore held by it) the rights and
obligations of the assigning Lender hereunder with respect thereto and (B) the
assigning Lender shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights (other than rights under the provisions of this Agreement and the other
Credit Documents relating to indemnification or payment of fees, costs and
expenses, to the extent such rights relate to the time prior to the effective
date of such Assignment and Acceptance) and be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of such assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto, except that
such assigning Lender shall continue to be entitled to the protections of
SECTIONS 2.16(a), 2.16(b), 2.17, 10.1, and 10.2 for matters arising during the
periods while it was a Lender hereunder). The terms and provisions of each
Assignment and Acceptance shall, upon the effectiveness thereof, be incorporated
into and made a part of this Agreement, and the covenants, agreements and
obligations of each Lender set forth therein shall be deemed made to and for the
benefit of the Administrative Agent and the other parties hereto as if set forth
at length herein.
(b) The Administrative Agent, acting solely for this purpose as an agent
of the Borrower, will maintain at its address for notices referred to in SECTION
10.5 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders and
the Commitments of, and principal amount of the Loans owing to, each Lender from
time to time (the "Register"). The entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and each Lender at any reasonable time
and from time to time upon reasonable prior notice.
(c) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an Assignee and, if required,
counterexecuted by the Borrower, together with the Note or Notes subject to such
assignment and the processing fee referred to in subsection (a) above, the
Administrative Agent will (i) accept such Assignment and Acceptance, (ii) on or
as of the effective date thereof, record the information contained therein in
the Register and (iii) give notice thereof to the Borrower and the Lenders. If
requested by or on behalf of the
63
Assignee, the Borrower, at its own expense, will execute and deliver to the
Administrative Agent, a new Note or Notes to the order of the Assignee (and, if
the assigning Lender has retained any portion of its rights and obligations
hereunder, to the order of the assigning Lender), prepared in accordance with
the applicable provisions of SECTION 2.4 as necessary to reflect, after giving
effect to the assignment, the Commitments and/or outstanding Loans, as the case
may be, of the Assignee and (to the extent of any retained interests) the
assigning Lender, in substantially the form of EXHIBIT A. The Administrative
Agent will return canceled Notes to the Borrower. At the time of each assignment
pursuant to this SECTION 10.7 to a Person that is a Non-U.S. Lender and is not
already a Lender hereunder, the assignee Lender shall provide to the Borrower
and the Administrative Agent the appropriate Internal Revenue Service forms
described in SECTION 2.17.
(d) Each Lender may, without the consent of the Borrower, the
Administrative Agent or any other Lender, sell to one or more other Persons
(each, a "Participant") participations in all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the outstanding Loans made by it, and the Note or
Notes held by it); provided, however, that (i) such Lender's obligations under
this Agreement shall remain unchanged and such Lender shall remain solely
responsible for the performance of such obligations, (ii) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and no Lender shall permit any Participant to
have any voting rights or any right to control the vote of such Lender with
respect to any amendment, modification, waiver, consent or other action
hereunder or under any other Credit Document (except as to actions described in
SECTION 10.6(a) and clause (i) of SECTION 10.6(b) that affect such Participant
or the Lender selling the participation), and (iii) no Participant shall have
any rights under this Agreement or any of the other Credit Documents, each
Participant's rights against the granting Lender in respect of any participation
to be those set forth in the participation agreement, and all amounts payable by
the Borrower hereunder shall be determined as if such Lender had not granted
such participation. Notwithstanding the foregoing, each Participant shall have
the rights of a Lender for purposes of SECTIONS 2.16(a), 2.16(b), 2.17, 2.18 and
8.3, and shall be entitled to the benefits thereto, to the extent that the
Lender granting such participation would be entitled to such benefits if the
participation had not been made; provided that no Participant shall be entitled
to receive any greater amount pursuant to any of such Sections than the Lender
granting such participation would have been entitled to receive in respect of
the amount of the participation made by such Lender to such Participant had such
participation not been made.
(e) Nothing in this Agreement shall be construed to prohibit any Lender
from pledging or assigning all or any portion of its rights and interest
hereunder or under any Note to any Federal Reserve Bank as security for
borrowings therefrom; provided, however, that no such pledge or assignment shall
release a Lender from any of its obligations hereunder.
(f) Any Lender or Participant may, in connection with any assignment or
participation, pledge or proposed assignment, pledge or participation pursuant
to this Section, disclose to the Assignee, Participant or pledgee or proposed
Assignee, Participant or pledgee any information relating to the Borrower and
its Subsidiaries furnished to it by or on behalf of any other party hereto;
provided that such Assignee, Participant or pledgee or proposed Assignee,
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Participant or pledgee agrees in writing to keep such information confidential
to the same extent required of the Lenders under SECTION 10.13.
10.8 No Waiver. The rights and remedies of the Administrative Agent, the
Arranger and each Lender expressly set forth in this Agreement and the other
Credit Documents are cumulative and in addition to, and not exclusive of, all
other rights and remedies available at law, in equity or otherwise. No failure
or delay on the part of the Administrative Agent, the Arranger or any Lender in
exercising any right, power or privilege shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege or be construed to be a waiver of any Default or Event
of Default. No course of dealing between any of the Borrower and the
Administrative Agent, the Arranger or the Lenders or their agents or employees
shall be effective to amend, modify or discharge any provision of this Agreement
or any other Credit Document or to constitute a waiver of any Default or Event
of Default. No notice to or demand upon the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of the Administrative Agent,
the Arranger or any Lender to exercise any right or remedy or take any other or
further action in any circumstances without notice or demand.
10.9 Successors and Assigns. This Agreement shall be binding upon, inure
to the benefit of and be enforceable by the respective successors and assigns of
the parties hereto, and all references herein to any party shall be deemed to
include its successors and assigns; provided, however, that (i) the Borrower
shall not sell, assign or transfer any of its rights, interests, duties or
obligations under this Agreement or any other Credit Document without the prior
written consent of all of the Lenders and (ii) any Assignees and Participants
shall have such rights and obligations with respect to this Agreement and the
other Credit Documents as are provided for under and pursuant to the provisions
of SECTION 10.7.
10.10 Survival. All representations, warranties and agreements made by or
on behalf of the Borrower or any of its Subsidiaries in this Agreement and in
the other Credit Documents shall survive the execution and delivery hereof or
thereof and the making and repayment of the Loans. In addition, notwithstanding
anything herein, to the maximum extent permitted by applicable law, the
provisions of this Agreement and the other Credit Documents relating to
indemnification or payment of fees, costs and expenses, including, without
limitation, the provisions of SECTIONS 2.16(a), 2.16(b), 2.17, 2.18, 9.7, 10.1
and 10.2, shall survive the payment in full of the Loans, the termination of the
Commitments and any termination of this Agreement or any of the other Credit
Documents.
10.11 Severability. To the extent any provision of this Agreement is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
10.12 Construction. The headings of the various articles, sections and
subsections of this Agreement and the table of contents have been inserted for
convenience only and shall not in any way affect the meaning or construction of
any of the provisions hereof. Except as otherwise
65
expressly provided herein and in the other Credit Documents, in the event of any
inconsistency or conflict between any provision of this Agreement and any
provision of any of the other Credit Documents, the provision of this Agreement
shall control.
10.13 Confidentiality. Each of the Administrative Agent and each Lender
agrees to keep confidential, pursuant to its customary procedures for handling
confidential information of a similar nature and in accordance with safe and
sound banking practices, all nonpublic information provided to it by or on
behalf of the Borrower or any other Credit Party in connection with this
Agreement or any other Credit Document; provided, however, that each of the
Administrative Agent and each Lender may disclose such information (i) to its
Affiliates, and to its and its Affiliates' respective directors, officers,
partners, employees, agents, auditors, counsel and other advisors so long such
parties are informed of the confidential nature of such information and
instructed to keep such information confidential, (ii) at the demand or request
of any bank regulatory authority, court or other Governmental Authority having
or asserting jurisdiction over the Administrative Agent or such Lender or any of
their respective Affiliates, as may be required pursuant to subpoena or other
legal process, or otherwise in order to comply with any applicable Requirement
of Law, (iii) in connection with the exercise of any remedies hereunder or under
any other Credit Document or any Hedge Agreement or any action or proceeding
relating to this Agreement, any other Credit Document or any Hedge Agreement or
the enforcement of rights hereunder or thereunder, (iv) to the Administrative
Agent, the Arranger or any other Lender, (v) to the extent the same has become
available to the Administrative Agent or any Lender on a nonconfidential basis
from a source other than the Borrower or has become publicly available other
than as a result of a breach of this Agreement, (vi) subject to an agreement
containing provisions substantially the same as those in this Section, to any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations hereunder, (vii) with
the consent of the Borrower, and (viii) pursuant to and in accordance with the
provisions of SECTION 10.7(f).
10.14 Counterparts; Effectiveness. This Agreement may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. This Agreement
shall become effective upon the execution of a counterpart hereof by each of the
parties hereto and receipt by the Administrative Agent and the Borrower of
written or telephonic notification of such execution and authorization of
delivery thereof.
10.15 Disclosure of Information. The Borrower agrees and consents to the
Administrative Agent's and the Arranger's disclosure of information relating to
this transaction to Gold Sheets and other similar bank trade publications. Such
information will consist of deal terms and other information customarily found
in such publications.
10.16 Nonreliance. Each Lender hereby represents that it is not relying on
or looking to any Margin Stock (as defined in Regulation U of the Federal
Reserve Board) for the repayment of the Loans provided for herein.
10.17 Entire Agreement. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND
INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION HEREWITH (A) EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING
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BETWEEN THE PARTIES HERETO AND THERETO RELATING TO THE SUBJECT MATTER HEREOF AND
THEREOF, (B) SUPERSEDE ANY AND ALL PRIOR AGREEMENTS AND UNDERSTANDINGS OF SUCH
PERSONS, ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF,
INCLUDING, WITHOUT LIMITATION, THE COMMITMENT LETTER FROM WACHOVIA TO THE
BORROWER DATED JUNE 9, 2004, BUT SPECIFICALLY EXCLUDING THE FEE LETTER AND (C)
MAY NOT BE AMENDED, SUPPLEMENTED, CONTRADICTED OR OTHERWISE MODIFIED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
67
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
ALLEGHANY CORPORATION
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
(signatures continued)
WACHOVIA BANK, NATIONAL
ASSOCIATION, as Administrative Agent and as a
Lender
By: /s/ Xxxxxxx Xxxxx
------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
(signatures continued)
U.S. BANK NATIONAL ASSOCIATION, as
Syndication Agent and as a Lender
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
(signatures continued)
LASALLE BANK NATIONAL ASSOCIATION,
as Documentation Agent and as a Lender
By: /s/ Xxxxx X. Xxxx
------------------------------
Name: Xxxxx X. Xxxx
Title: First Vice President
(signatures continued)
HSBC BANK USA, NATIONAL
ASSOCIATION, as Documentation Agent and as a
Lender
By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Managing Director
(signatures continued)
M&I XXXXXXXX & XXXXXX BANK, as a Lender
By: /s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
(signatures continued)
FIRST COMMERCIAL BANK, NEW YORK
AGENCY, as a Lender
By: /s/ Xxxxx X. X. Xx
------------------------------
Name: Xxxxx X. X. Xx
Title: VP & GM
(signatures continued)
BANK HAPOALIM B.M., as a Lender
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxx
Title: First Vice President
(signatures continued)
XXXXXXX XXXXX BANK USA, as a Lender
By: /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Director
(signatures continued)
THE BANK OF NEW YORK, as a Lender
By: /s/ Xxxxx Xxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
