CREDIT AGREEMENT
among
GUARANTY NATIONAL CORPORATION
as Borrower,
THE LENDERS NAMED HEREIN,
and
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA,
as Agent
$110,000,000 Reducing Revolving Credit Facility
Dated as of June 2, 1995,
As Amended and Restated as of December 16, 1996
TABLE OF CONTENTS
Page
RECITALS 1
ARTICLE I
DEFINITIONS
1.1. Defined Terms 1
1.2. Accounting Terms 18
1.3. Other Terms; Construction. 19
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
2.1. The Loans 19
2.2. Borrowings 19
2.3. Notes 21
2.4. Termination, Reduction of Commitments 21
2.5. Payments; Voluntary, Mandatory 22
2.6. Interest 23
2.7. Fees. 24
2.8. Interest Periods. 24
2.9. Conversions and Continuations 25
2.10. Method of Payments; Computations 26
2.11. Recovery of Payments 27
2.12. Use of Proceeds 28
2.13. Pro Rata Borrowings 28
2.14. Increased Costs; Change in Circumstances; Illegality; etc 28
2.15. Taxes 30
2.16. Compensation 31
2.17. Replacement of Lenders 32
2.18. Sale and Assignment of Existing Loans 32
ARTICLE III
CONDITIONS OF EFFECTIVENESS AND BORROWING
3.1. Conditions of Loans under Original Credit Agreement 33
3.2. Conditions to Effectiveness of this Agreement 33
3.3. Conditions to All Loans 35
3.4. No Waiver of Conditions Precedent 35
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1. Corporate Organization and Power 36
4.2. Authorization; Enforceability. 36
4.3. No Violation. 36
4.4. Governmental Authorization; Permits. 36
4.5. Litigation. 37
4.6. Taxes. 37
4.7. Subsidiaries. 37
4.8. Full Disclosure. 37
4.9. Margin Regulations. 38
4.10. Financial Matters. 38
4.11. Ownership of Properties. 39
4.12. Plans. 40
4.13. Solvency. 41
4.14. Environmental Matters. 41
4.15. Compliance With Laws. 42
4.16. Regulated Industries. 42
4.17. Reinsurance Agreements 42
4.18. Carried Insurance 42
4.19. Indebtedness 42
ARTICLE V
AFFIRMATIVE COVENANTS
5.1. Financial Statements. 43
5.2. Statutory Financial Statements. 43
5.3. Other Business and Financial Information. 44
5.4. Notice of Certain Events 45
5.5. Corporate Existence; Franchises; Maintenance of Properties. 46
5.6. Compliance with Laws 47
5.7. Payment of Obligations 47
5.8. Insurance. 47
5.9. Maintenance of Books and Records; Inspection. 47
5.10. Dividends 47
5.11. Ownership of Insurance Subsidiaries 48
5.12. Further Assurances 48
ARTICLE VI
FINANCIAL COVENANTS
6.1. Consolidated Statutory Surplus 48
6.2. Operating Leverage Ratio 48
6.3. Fixed Charge Coverage Ratio 48
6.4. Risk-Based Capital 48
6.5. Consolidated Net Worth 49
ARTICLE VII
NEGATIVE COVENANTS
7.1. Merger, Consolidation 49
7.2. Indebtedness 49
7.3. Liens 50
7.4. Disposition of Assets. 50
7.5. Investments 50
7.6. Restricted Payments 51
7.7. Transactions with Affiliates 52
7.8. Certain Amendments 52
7.9. Lines of Business 52
7.10. Limitation on Certain Restrictions 52
7.11. Compliance of Plans. 52
7.12. Fiscal Year 53
7.13. Accounting Changes. 53
7.14. Reinsurance Agreements. 53
ARTICLE VIII
EVENTS OF DEFAULT
8.1. Events of Default 53
8.2. Remedies: Termination of Commitments, Acceleration, etc. 56
8.3. Remedies: Set-Off 56
ARTICLE IX
THE AGENT
9.1. Appointment 57
9.2. Nature of Duties 57
9.3. Absence of Reliance on the Agent 57
9.4. Certain Rights of the Agent 58
9.5. Notice of Default 58
9.6. Reliance by Agent 58
9.7. Indemnification 59
9.8. The Agent in its Individual Capacity 59
9.9. Holders 59
9.10. Successor Agent 59
ARTICLE X
MISCELLANEOUS
10.1. Survival 60
10.2. Governing Law; Consent to Jurisdiction. 60
10.3. Waiver of Jury Trial 61
10.4. Notices 61
10.5. Fees and Expenses. 62
10.7. Amendments, Waivers, etc 63
10.8. Assignments, Participations. 64
10.9. No Waiver 66
10.10. Successors and Assigns 66
10.11. Severability 67
10.12. Construction 67
10.13. Entire Agreement 67
10.14. Counterparts; Effectiveness 67
10.15. Confidentiality 67
10.16. Effect of Amendment and Restatement 68
ANNEXES
Annex 1 Provisions for Alternative Dispute Resolution
Annex 2 Sale and Assignment of Existing Loans
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
Exhibit E Form of Opinion of Ireland, Xxxxxxxxx, Xxxxx & Xxxxxx, P.C.
SCHEDULES
Schedule 1.1(a) Liens
Schedule 4.4(a) Consents, Approvals
Schedule 4.4(b) Licenses
Schedule 4.7 Subsidiaries
Schedule 4.12(a) Plans
Schedule 4.12(c) Certain Welfare Plans
Schedule 4.17 Reinsurance Agreements
Schedule 4.18 Insurance Policies
Schedule 4.19 Indebtedness
Schedule 7.7 Agreements with Affiliates
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of the
16th day of December, 1996 (this "Agreement"), is made among
GUARANTY NATIONAL CORPORATION, a Colorado corporation with its
principal offices in Englewood, Colorado (the "Borrower"), the
banks and financial institutions listed on the signature pages
hereof or that become parties hereto after the date hereof
(collectively, the "Lenders"), and FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, a national banking association with its principal
offices in Charlotte, North Carolina ("First Union"), as agent
for the Lenders (in such capacity, the "Agent").
RECITALS
A. The Borrower, certain banks and other financial
institutions, Norwest Bank Colorado, National Association, as
Funding Agent, and First Union, as Administrative Agent, are
parties to a Credit Agreement, dated as of June 2, 1995 (as
amended, the "Original Credit Agreement"), providing for the
availability to the Borrower of a reducing revolving credit
facility in the aggregate principal amount of $110,000,000 on the
terms and subject to the conditions set forth therein. The
proceeds of borrowings under the Original Credit Agreement were
used to finance the acquisition of Viking Insurance Holdings,
Inc. and to pay certain costs and expenses in connection
therewith, to refinance certain existing indebtedness and for
working capital and general corporate purposes.
B. The Borrower has requested certain amendments to the
Original Credit Agreement, and the Lenders and the Agent have
agreed to make such amendments by amending and restating the
Original Credit Agreement in its entirety on the terms and
subject to the conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual provisions,
covenants and agreements herein contained, the parties hereto
hereby agree that, as of the Amendment Effective Date, the
Original Credit Agreement shall be amended and restated in its
entirety 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 Agent, duly completed and signed by an Authorized
Officer of the Borrower and in form and substance satisfactory to
the Agent, listing any one or more accounts to which the Borrower
may from time to time request the Agent to forward the proceeds
of any Loans made hereunder.
"Acquisition Agreement" shall mean the Stock Purchase
Agreement, dated as of April 26, 1995, between the Borrower and
Talegen.
"Actuarial Report" shall mean, with respect to any Insurance
Subsidiary for any period, an actuarial review and valuation
statement of, and opinion as to the adequacy of, such Insurance
Subsidiary's loss and loss adjustment expense reserve positions
as of the end of such period with respect to the insurance
business then in force, and covering such other subjects as are
customary in actuarial reviews and as may be requested by the
Required Lenders, prepared by an independent actuarial firm
acceptable to the Required Lenders in accordance with reasonable
actuarial assumptions and procedures not inconsistent with the
assumptions and procedures previously employed.
"Adjusted LIBOR Rate" shall mean, at any time with respect
to any Loan, a rate per annum equal to the LIBOR Rate plus the
Applicable LIBOR Margin, each as in effect at such time.
"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 or is a director or officer of such Person. For
purposes of this definition, with respect to any Person "control"
shall mean (i) 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, or (ii) the beneficial
ownership of 10% or more of the outstanding voting securities of
such Person.
"Agreement" shall mean this Credit Agreement, as amended,
modified or supplemented from time to time.
"Amendment Effective Date" shall mean the date on which all
conditions precedent set forth in Section 3.2 have been satisfied
or waived in accordance with the terms of this Agreement;
provided that, unless the Borrower shall agree otherwise, the
Amendment Effective Date shall not occur prior to December 16,
1996.
"Applicable Commitment Fee Rate" shall mean, except as
provided in the last sentence of the paragraph after the
following matrix, a rate per annum as determined under the
following matrix with reference to the Capitalization Ratio
calculated as provided below:
Capitalization Ratio Applicable Commitment Fee Rate
Greater than or equal to 0.45 to 1.0 0.25%
Greater than or equal to 0.35 to 1.0
but less than 0.45 to 1.0 0.25%
Greater than or equal to 0.25 to 1.0
but less than 0.35 to 1.0 0.20%
Less than 0.25 to 1.0 0.175%
The Applicable Commitment Fee Rate shall be reset from time to
time in accordance with the above matrix on the fifth (5th)
Business Day after delivery by the Borrower in accordance with
Sections 5.1(a) and (b) of financial statements together with a
Compliance Certificate attaching a Rate Calculation Worksheet
(reflecting the computation of the Capitalization Ratio as of the
last day of the preceding fiscal quarter, beginning with the
fiscal quarter ending December 31, 1996) that provides for a
different Applicable Commitment Fee Rate than that then in
effect. The Applicable Commitment Fee Rate shall be 0.20% at all
times hereunder until the first effective date of any change in
the Applicable Commitment Fee Rate under the matrix as provided
above.
"Applicable LIBOR Margin" shall mean, at any time with
respect to any LIBOR Loan, except as provided in the last
sentence of the paragraph after the following matrix, the
applicable percentage as determined under the following matrix
with reference to the Capitalization Ratio calculated as provided
below:
Pricing Level I Pricing Level II
Applicable Applicable
Capitalization Ratio LIBOR Margin LIBOR Margin
Greater than or equal to 0.45 to 1.0 0.875% 0.75%
Greater than or equal to 0.35 to 1.0
but less than 0.45 to 1.0 0.65% 0.55%
Greater than or equal to 0.25 to 1.0
but less than 0.35 to 1.0 0.55% 0.45%
Less than 0.25 to 1.0 0.45% 0.375%
Pricing Level II shall apply at all times during which (i) Orion
and its Subsidiaries collectively beneficially own securities of
the Borrower representing 80% or more of the combined voting
power of the then outstanding securities of the Borrower
ordinarily (and apart from rights accruing under special
circumstances) having the right to vote in the election of
directors and, in addition, (ii) Orion has senior unsecured long-
term publicly traded Indebtedness without third-party credit
enhancement that is rated not lower than "BBB-" (or the then
equivalent grade) by Standard & Poor's or not lower than "Baa3"
(or the then equivalent grade) by Xxxxx'x; at all other times,
Pricing Level I shall apply. The Applicable LIBOR Margin shall
be reset from time to time in accordance with the above matrix on
the fifth (5th) Business Day after delivery by the Borrower in
accordance with Sections 5.1(a) and (b) of financial statements
together with a Compliance Certificate attaching a Rate
Calculation Worksheet (reflecting the computation of the
Capitalization Ratio as of the last day of the preceding fiscal
quarter, beginning with the fiscal quarter ending December 31,
1996) that provides for a different Applicable LIBOR Margin than
that then in effect. The Applicable LIBOR Margin shall be 0.45%
at all times hereunder until the first effective date of any
change in the Applicable LIBOR Margin under the matrix as
provided above.
"Annual Statement" shall mean, with respect to any Insurance
Subsidiary for any fiscal year, the annual financial statements
of such Insurance Subsidiary as required to be filed with the
Insurance Regulatory Authority of its jurisdiction of domicile
and in accordance with the laws of such jurisdiction, together
with all exhibits, schedules, certificates and actuarial opinions
required to be filed or delivered therewith.
"Assignee" shall have the meaning given to such term in
Section 10.8(a).
"Assignment and Acceptance" shall mean an Assignment and
Acceptance entered into between a Lender and an Assignee and
accepted by the Agent and the Borrower, in substantially the form
of Exhibit D.
"Authorized Officer" shall mean any officer of the Borrower
authorized by resolution of the board of directors of the
Borrower to take the action specified herein with respect to such
officer and whose signature and incumbency shall have been
certified to the Agent by the secretary or an assistant secretary
of the Borrower.
"Available Dividend Amount" shall mean, with respect to any
Insurance Subsidiary for any period of four consecutive fiscal
quarters, the aggregate maximum amount of dividends that is or
would be permitted by the Insurance Regulatory Authority of its
jurisdiction of domicile, under applicable Requirements of Law
(without the necessity of any consent, approval or other action
of such Insurance Regulatory Authority), to be paid by such
Insurance Subsidiary in respect of such four-quarter period as if
such period were a fiscal year (whether or not any such dividends
have actually been paid).
"Bankruptcy Code" shall mean 11 U.S.C. section 101 et seq., as
amended from time to time, and any successor statute.
"Base Rate" shall mean the higher of (i) the per annum
interest rate publicly announced from time to time by First Union
in Charlotte, North Carolina, to be its prime or base rate (which
may not necessarily be its best lending rate), as adjusted to
conform to changes as of the opening of business on the date of
any such change in such prime or base rate, or (ii) 0.5% per
annum in excess of the Federal Funds Rate, as adjusted to conform
to changes as of the opening of business on the date of any such
change in the Federal Funds Rate.
"Base Rate Loan" shall mean, at any time, any Loan that
bears interest at such time at the Base Rate.
"Borrowing" shall mean the incurrence by the Borrower on a
given date (including as a result of conversions or continuations
of outstanding Loans pursuant to Section 2.9) of Loans under the
Facility.
"Borrowing Date" shall have the meaning given to such term
in Section 2.2(a).
"Business Day" shall mean (i) any day other than a Saturday
or Sunday, a legal holiday or a day on which commercial banks in
Charlotte, North Carolina are required by law 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.
"Capitalization Ratio" shall mean, as of the last day of any
fiscal quarter, the ratio of (i) Consolidated Indebtedness
(excluding Indebtedness incurred pursuant to Investment
Borrowings of the Borrower and its Subsidiaries, but only to the
extent such Indebtedness is permitted under Section 7.2) as of
such date to (ii) the sum of Consolidated Indebtedness (excluding
Indebtedness incurred pursuant to Investment Borrowings of the
Borrower and its Subsidiaries, but only to the
extent such Indebtedness is permitted under Section 7.2) and
Consolidated Net Worth, each as of such date.
"Cash Equivalents" shall mean (i) securities issued or
unconditionally guaranteed by the United States of America or any
agency or instrumentality thereof, backed by the full faith and
credit of the United States of America and maturing within 180
days from the date of acquisition, (ii) securities issued by any
state of the United States of America or any political
subdivision or public instrumentality thereof, maturing within
180 days from the date of acquisition and, at the time of
acquisition, having a rating of at least A or the equivalent
thereof by Standard & Poor's or at least A2 or the equivalent
thereof by Xxxxx'x, (iii) commercial paper issued by any Person
organized under the laws of the United States of America,
maturing no more than 180 days from the date of acquisition and,
at the time of acquisition, having a rating of at least A-1 or
the equivalent thereof by Standard & Poor's or at least P-1 or
the equivalent thereof by Xxxxx'x, (iv) time deposits and
certificates of deposit that are insured by the Federal Deposit
Insurance Corporation (the "FDIC") or any successor
instrumentality of the government of the United States of America
up to the applicable limit on insurance granted by the FDIC or
such other instrumentality with respect to such instruments (it
being understood that the amount invested in such instrument may
not exceed the limit on such insurance), maturing within 180 days
from the date of issuance and issued by a bank or trust company
organized under the laws of the United States of America or any
state thereof and having combined capital and surplus of at least
$250,000,000 and (v) money market funds substantially all of
whose assets are comprised of securities of the types described
in clauses (i) through (iv) above.
"Change of Control" shall mean the occurrence of any of the
following: (i) any Person or group of Persons acting in concert
as a partnership or other group (other than Orion or any of its
Subsidiaries or a group including Orion or any of its
Subsidiaries) shall, as a result of a tender or exchange offer,
open market purchases, privately negotiated purchases or
otherwise, have become, after the date hereof, the "beneficial
owner" (within the meaning of such term under Rule 13d-3 under
the Exchange Act) of securities of the Borrower representing 20%
or more of the combined voting power of the then outstanding
securities of the Borrower ordinarily (and apart from rights
accruing under special circumstances) having the right to vote in
the election of directors; (ii) the Borrower shall at any time no
longer be subject to the reporting requirements of Section 13(a)
or Section 15(d) of the Exchange Act and, also at such time,
Orion and its Subsidiaries shall collectively beneficially own
securities of the Borrower representing less than 80% of the
combined voting power of the then outstanding securities of the
Borrower ordinarily (and apart from rights accruing under special
circumstances) having the right to vote in the election of
directors; or (iii) the board of directors of the Borrower shall
cease to consist of a majority of the individuals who constituted
the board of directors as of the date hereof or who shall have
become a member thereof subsequent to the date hereof after
having been nominated, or otherwise approved in writing, by at
least a majority of individuals who constituted the board of
directors of the Borrower as of the date hereof (or their
replacements approved as herein required), and, also at such
time, either (A) Orion and its Subsidiaries shall collectively
beneficially own securities of the Borrower representing 50% or
less of the combined voting power of the then outstanding
securities of the Borrower ordinarily (and apart from rights
accruing under special circumstances) having the right to vote in
the election of directors, or (B) any Person or group of Persons
acting in concert as a partnership or other group shall, as a
result of a tender or exchange offer, open market purchases,
privately negotiated purchases or otherwise, have become, after
the date hereof, the "beneficial owner" (within the meaning of
such term under Rule 13d-3 under the Exchange Act) of securities
of Orion representing 20% or more of
the combined voting power of the then outstanding securities of
Orion ordinarily (and apart from rights accruing under special
circumstances) having the right to vote in the election of
directors.
"Combined Net Written Premiums" shall mean, at any time, the
aggregate (without duplication) of Net Written Premiums of each
Insurance Subsidiary at such time, after eliminating the effect
thereupon of any transactions among the Insurance Subsidiaries.
"Commitment" shall mean, with respect to any Lender at any
time, the amount set forth under such Lender's name on its
signature page hereto 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 Agent pursuant to Section 10.8(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
certificate in the form of Exhibit C.
"Consolidated Indebtedness" shall mean, as of the last day
of any fiscal quarter, the aggregate (without duplication) of all
Indebtedness of the Borrower and its Subsidiaries as of such
date, determined on a consolidated basis in accordance with
Generally Accepted Accounting Principles.
"Consolidated Investment Assets" shall mean, at any time,
the aggregate of (i) cash and Cash Equivalents at such time and
(ii) the equity and non-equity securities owned by the Borrower
or any of its Subsidiaries at such time and required to be
classified as investment assets on the consolidated balance sheet
of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with Generally Accepted
Accounting Principles.
"Consolidated Net Income" shall mean, for any fiscal
quarter, net income (or loss) for the Borrower and its
Subsidiaries for such fiscal quarter, determined on a
consolidated basis in accordance with Generally Accepted
Accounting Principles.
"Consolidated Net Worth" shall mean, at any time, the net
worth of the Borrower and its Subsidiaries at such time,
determined on a consolidated basis in accordance with Generally
Accepted Accounting Principles but (i) excluding any preferred
stock or other class of equity securities that, by its stated
terms (or by the terms of any class of equity securities issuable
upon conversion thereof or in exchange therefor), or upon the
occurrence of any event, matures or is mandatorily redeemable, or
is redeemable at the option of the holders thereof, in whole or
in part, and (ii) without regard to the requirements of Statement
of Financial Accounting Standards No. 115 issued by the Financial
Accounting Standards Board of the American Institute of Certified
Public Accountants.
"Consolidated Statutory Surplus" shall mean, with respect to
GNIC and VICW at any time, the aggregate (without duplication) of
the amounts shown on line 25, page 3, column 1 of the Annual
Statement of each of GNIC and VICW, or the aggregate (without
duplication) of the amounts determined in a consistent manner for
any date other than a date as of which an Annual Statement of
GNIC and VICW is prepared.
"Consolidated Total Assets" shall mean, at any time, the
aggregate (without duplication) of all assets of the Borrower and
its Subsidiaries that are required to be included on the asset
side of the
consolidated balance sheet of the Borrower and its Subsidiaries
at such time, determined on a consolidated basis in accordance
with Generally Accepted Accounting Principles.
"Contingent Obligation" shall mean, with respect to any
Person, any direct or indirect liability of such Person with
respect to any Indebtedness, lease, dividend, guaranty, letter of
credit or other obligation (the "primary obligation") of another
Person (the "primary obligor"), whether or not contingent, (a) to
purchase, repurchase or otherwise acquire such primary obligation
or any property constituting direct or indirect security
therefor, (b) to advance or provide funds (i) for the payment or
discharge of any such primary obligation or (ii) to maintain
working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance
sheet item, level of income or financial condition of the primary
obligor, (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor in
respect thereof to make payment of such primary obligation or
(d) otherwise to assure or hold harmless the owner of any such
primary obligation against loss or failure or inability to
perform in respect thereof; provided, however, that obligations
entered into in the ordinary course of an Insurance Subsidiary's
business under insurance policies or contracts issued by it or to
which it is a party, including Reinsurance Agreements (and
security posted by any such Insurance Subsidiary in the ordinary
course of its business to secure obligations thereunder), shall
not be deemed to be Contingent Obligations of the Borrower or any
of its Subsidiaries for purposes of this Agreement. The amount
of any Contingent Obligation shall be deemed to be an amount
equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof.
"Covenant Compliance Worksheet" shall mean a fully completed
worksheet in the form of Attachment A to Exhibit C.
"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.
"Dollars" or "$" shall mean dollars of the United States of
America.
"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 (i) a Reportable Event with respect
to a Qualified Plan or a Multiemployer Plan, (ii) a complete or
partial withdrawal by the Borrower or any ERISA Affiliate from a
Multiemployer Plan, (iii) the filing by the Borrower or any ERISA
Affiliate of a notice of intent to terminate, the treatment of a
plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to
terminate, a Qualified Plan or Multiemployer Plan subject to
Title IV of ERISA, (iv) a failure to make required contributions
to a Qualified Plan or Multiemployer Plan by the applicable due
date thereof, (v) 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, (vi) an application for a funding
waiver or an extension of any amortization period pursuant to
Section 412 of the Internal Revenue Code with respect to any
Qualified Plan, (vii) the engaging in or otherwise becoming
liable for a nonexempt Prohibited Transaction by the Borrower or
any ERISA Affiliate or (viii) a violation of the applicable
requirements of Section 404 or 405 of ERISA or the exclusive
benefit rule under Section 401(a) of the Internal Revenue Code by
any fiduciary of any Qualified Plan for which the Borrower or any
of its Subsidiaries may be directly or indirectly liable
(provided that each of the events described in clauses (v), (vii)
and (viii) above shall be an "ERISA Event" only if the same would
be reasonably likely to have a Material Adverse Effect).
"Eligible Assignee" shall mean (i) a commercial bank
organized under the laws of the United States or any state
thereof and having total assets in excess of $5,000,000,000,
(ii) a commercial bank organized under the laws of any other
country that is a member of the OECD or a political subdivision
of any such country and having total assets in excess of
$5,000,000,000, provided that such bank or other financial
institution is acting through a branch or agency located in the
United States, in the country under the laws of which it is
organized or in another country that is also a member of the
OECD, (iii) the central bank of any country that is a member of
the OECD, (iv) a finance company, insurance company or other
financial institution or fund that is engaged in making,
purchasing or otherwise investing in loans in the ordinary course
of its business and having total assets in excess of
$3,000,000,000 or (v) any Affiliate of an existing Lender.
"Environmental Claims" shall mean any and all
administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or
violation, investigations (other than internal reports prepared
by the Borrower or any Subsidiary solely in the ordinary course
of its business and not in response to any third party action or
request of any kind) or proceedings relating in any way to any
Environmental Law or any permit issued, or any approval given,
under any such Environmental Law (collectively, "Claims"),
including, without limitation, (i) any and all Claims by
Governmental Authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any
applicable Environmental Law and (ii) any and all Claims by any
third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from
Hazardous Substances or arising from alleged injury or threat of
injury to human health or the environment.
"Environmental Laws" shall mean, collectively, any and all
federal, state and local laws, statutes, ordinances, rules,
regulations, permits, licenses, approvals, interpretations, rules
of common law and orders of courts or Governmental Authorities,
relating to the protection of human health 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.
"Event of Default" shall have the meaning given to such term
in Section 8.1.
"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.
"Existing Loans" shall have the meaning given to such term
in Section 2.1(c).
"Facility" shall mean the revolving line of credit
established by the Lenders under Section 2.1(a).
"Facility Expiry Date" shall mean April 15, 2002.
"Facility Termination Date" shall mean the Facility Expiry
Date or such earlier date of termination of the Commitments in
accordance with Section 2.4 or 8.2.
"Federal Funds Rate" shall mean, for any period, a
fluctuating per annum interest rate 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 Agent from three federal funds
brokers of recognized standing selected by the 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 First Union to the
Borrower, dated October 15, 1996, relating to the facility and
administrative fees payable in respect of the transactions
contemplated by this Agreement, as amended, modified or
supplemented from time to time.
"Fixed Charge Coverage Ratio" shall mean, as of the last day
of any period of four consecutive fiscal quarters (the
"Measurement Period"), the ratio of (i) the sum of (A) the
aggregate (without duplication) of the Available Dividend Amount
of each Insurance Subsidiary directly owned by the Borrower or by
Viking Holdings for the Measurement Period, plus (B) the
aggregate of all management fees and lease payments paid to the
Borrower by its Subsidiaries during the Measurement Period, plus
(C) the difference (whether positive or negative) between (1) the
aggregate of all payments made to the Borrower by its
Subsidiaries during the Measurement Period pursuant to tax
sharing or tax allocation agreements or arrangements minus
(2) the aggregate of all tax payments (including payments to
Orion pursuant to tax sharing or tax allocation agreements) made
by the Borrower during the Measurement Period to (ii) the
aggregate (without duplication) of all lease payments and
scheduled payments of principal (to the extent such principal
remains outstanding) and interest (based on interest rates in
effect as of the date of determination) in respect of
Indebtedness reasonably determined by the Borrower (and as set
forth in the relevant Covenant Compliance Worksheet) to be
required to be made by the Borrower and its Subsidiaries during
the period of four consecutive fiscal quarters immediately
following the Measurement Period. For the sake of clarity, it is
understood that prepayments of Indebtedness made during any
Measurement Period shall not be taken into account in the
calculation under clause (i) above for such Measurement Period.
"GNIC" shall mean Guaranty National Insurance Company, a
Colorado corporation.
"Generally Accepted Accounting Principles" shall mean
generally accepted accounting principles, as set forth in the
opinions and pronouncements of the Accounting Pronouncements
Board and the American Institute of Certified Public Accountants
and the statements and pronouncements of
the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the
accounting profession) or in such other statements by such
entities as may be in general use by significant segments of the
accounting profession, consistently applied and maintained and in
conformity with those used in the preparation of the most recent
Historical Financial Statements and containing disclosure of the
effect on the financial position or results of operations of any
material change in the application of accounting principles and
practices during the relevant reporting period.
"Governmental Authority" shall mean any nation or
government, 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, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by
any of the foregoing.
"Hazardous Substances" shall mean any substances or
materials (i) that are or become defined as hazardous wastes,
hazardous substances, pollutants, contaminants or toxic
substances under any Environmental Law, (ii) that are defined by
any Environmental Law as toxic, explosive, corrosive, ignitable,
infectious, radioactive, mutagenic or otherwise hazardous,
(iii) the presence of which require investigation or response
under any Environmental Law, (iv) that constitute a nuisance,
trespass or health or safety hazard to Persons or neighboring
properties, (v) that consist of underground or aboveground
storage tanks, whether empty, filled or partially filled with any
substance or (vi) that contain, without limitation, asbestos,
polychlorinated biphenyls, urea formaldehyde foam insulation,
petroleum hydrocarbons, petroleum derived substances or wastes,
crude oil, nuclear fuel, natural gas or synthetic gas.
"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.
"Historical Financial Statements" shall have the meaning
given to such term in Section 4.10(a).
"Historical Statutory Statements" shall have the meaning
given to such term in Section 4.10(c).
"IRIS Tests" shall mean the ratios and other financial
measurements developed by the NAIC under its Insurance Regulatory
Information System or, in lieu thereof, any successor or other
substantially similar guidelines intended to measure the
financial performance of companies in the property and casualty
insurance industry, as the same shall be in effect from time to
time.
"Indebtedness" shall mean, with respect to any Person,
(i) all indebtedness of such Person for borrowed money, (ii) all
reimbursement obligations of such Person with respect to surety
bonds, letters of credit and bankers' acceptances (in each case,
whether or not matured and in the stated amount thereof),
(iii) all obligations of such Person evidenced by notes, bonds,
debentures or similar instruments, (iv) all obligations of such
Person to pay the deferred purchase price of property or services
(other than trade or other accounts payable arising in the
ordinary course of business, payable on terms customary in the
trade, and not more than 60 days past due except to the extent
being contested in good faith and by appropriate proceedings),
(v) all indebtedness created or arising under
any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement
in the event of a default are limited to repossession or sale of
such property), (vi) all obligations of such Person as lessee
under leases that are or should be, in accordance with Generally
Accepted Accounting Principles, recorded as capital leases, to
the extent such obligations are required to be so recorded,
(vii) all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any capital
stock or other equity securities that, by their stated terms (or
by the terms of any equity securities issuable upon conversion
thereof or in exchange therefor), or upon the occurrence of any
event, mature or are mandatorily redeemable, or are redeemable at
the option of the holder thereof, in whole or in part, (viii) all
Investment Borrowings of such Person, (ix) the net termination
obligations of such Person under any Hedge Agreements (other than
any Hedge Agreements in respect of the Indebtedness incurred
pursuant to this Agreement), 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
referred to in clauses (i) through (x) above secured by any Lien
on any property or asset owned or held by such Person regardless
of whether the indebtedness secured thereby shall have been
assumed by such Person or is nonrecourse to the credit of such
Person.
"Insurance Code" shall mean, with respect to any Insurance
Subsidiary, the insurance code of any state where such Insurance
Subsidiary is domiciled or conducting business, as amended from
time to time, and any successor statute, together with all rules
and regulations from time to time promulgated thereunder.
"Insurance Regulatory Authority" shall mean, with respect to
any Insurance Subsidiary, the insurance department or similar
Governmental Authority charged with regulating insurance
companies or insurance holding companies, in its state of
domicile and, to the extent that it has regulatory authority over
such Insurance Subsidiary, in each other jurisdiction in which
such Insurance Subsidiary conducts business or is licensed to
conduct business.
"Insurance Subsidiary" shall mean any Subsidiary of the
Borrower the ability of which to pay dividends is regulated by an
Insurance Regulatory Authority or that is otherwise required to
be regulated thereby in accordance with the applicable
Requirements of Law of its state of domicile.
"Investment Borrowings" shall mean, with respect to any
Person, Indebtedness of such Person incurred in connection with
(i) mortgage-backed security transactions in which such Person
sells mortgage collateral, such as (without limitation)
securities issued by the Government National Mortgage Association
and the Federal Home Loan Mortgage Corporation, for delivery in
the current month while simultaneously contracting to repurchase
"substantially the same" (as determined by the Public Securities
Association and under Generally Accepted Accounting Principles)
collateral for a later settlement, (ii) transactions in which
such Person lends cash to a primary dealer and the primary dealer
collateralizes the borrowing of the cash with certain securities,
and (iii) transactions in which such Person makes loans of
securities to a broker-dealer under an agreement requiring such
loans to be continuously secured by cash collateral or by United
States government securities.
"Investment Grade Securities" shall mean non-equity
securities (i) that are rated either "BBB-" (or the then
equivalent grade) or higher by Standard & Poor's or "Baa3" (or
the then equivalent grade) or higher by Moody's or (ii) that are
rated "2" or better by the NAIC in the event no rating therefor
is published by either Standard & Poor's or Moody's.
"Interest Period" shall have the meaning given to such term
in Section 2.9.
"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.
"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 appearing on Telerate Page 3750 (or any successor page)
or (z) if no such rate is available, or at the option of the
Agent in any event, the rate of interest determined by the Agent
to be the rate or the arithmetic mean of rates (rounded upward,
if necessary, to the nearest 1/16 of one percentage point) at
which Dollar deposits in immediately available funds are offered
by First Union to first-tier banks in the London interbank
Eurodollar market, in each case under (y) and (z) above at
approximately 11:00 a.m., London time, two (2) Business Days
prior to the first day of such Interest Period for a period
substantially equal to such Interest Period and in an amount
substantially equal to the amount of First Union's 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.
"Lender" shall mean each financial institution signatory
hereto and each other financial institution that becomes a
"Lender" hereunder pursuant to Section 10.8, and their respective
successors and assigns.
"Licenses" shall have the meaning given to such term in
Section 4.4(b).
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, security interest, lien (statutory or otherwise),
preference, priority, charge or other encumbrance of any nature,
whether voluntary or involuntary, including, without limitation,
the interest of any vendor or lessor under any conditional sale
agreement, title retention agreement, capital lease or any other
lease or arrangement having substantially the same effect as any
of the foregoing, and the filing of any financing statement or
similar statement or notice under the applicable Uniform
Commercial Code or comparable recording statute of any
jurisdiction.
"Loan Documents" shall mean and collectively refer to this
Agreement, the Notes and all other instruments, documents and
certificates now or hereafter executed and delivered to the Agent
or any Lender by or on behalf of the Borrower or any Subsidiary
with respect to this Agreement and the transactions contemplated
hereby, in each case as amended, modified, supplemented or
restated from time to time.
"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" or "Material Adverse Change" shall
mean a material adverse effect upon, or a material adverse change
in, any of (i) the condition (financial or otherwise),
operations, business or properties of the Borrower and its
Subsidiaries, taken as a whole, (ii) the ability of the
Borrower to perform its obligations under the Loan Documents or
(iii) the rights and remedies of the Agent or the Lenders under
the Loan Documents.
"Material Assets" shall mean (i) as to the Borrower or any
of its Subsidiaries at any time, (y) any one or more assets,
properties or businesses of the Borrower or such Subsidiary
comprising, individually or in the aggregate, greater than three
percent (3%) of Consolidated Total Assets at such time and
(z) any issued and outstanding shares of capital stock or other
equity securities of any Significant Subsidiary, and (ii) as to
any Insurance Subsidiary at any time, any one or more insurance
product lines to which greater than three percent (3%) of
Combined Net Written Premiums for the prior fiscal year are
attributable.
"Moody's" shall mean Xxxxx'x Investors Service, Inc., and
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.
"NAIC" shall mean the National Association of Insurance
Commissioners and any successor thereto.
"Net Written Premiums" shall mean, with respect to any
Insurance Subsidiary at any time, the amount of premiums written
(after deducting or adding premiums on business ceded to or
assumed from others) as shown on line 32, page 8, Part 2B, column
4 of the Annual Statement of such Insurance Subsidiary, or the
amount determined in a consistent manner for any date other than
a date as of which an Annual Statement of such Insurance
Subsidiary is prepared.
"Notes" shall mean the promissory notes of the Borrower in
substantially the form of Exhibit A, executed and delivered to
the Lenders pursuant to Section 2.3 or, in connection with an
Assignment and Acceptance, pursuant to Section 10.8(c), in each
case as amended, modified, supplemented or restated from time to
time.
"Notice of Borrowing" shall have the meaning given to such
term in Section 2.2(a).
"Notice of Conversion/Continuation" shall have the meaning
given to such term in Section 2.9(b).
"OECD" shall mean the Organization for Economic Cooperation
and Development and any successor thereto.
"Obligations" shall mean 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 Agent, any Lender or any other Person
entitled thereto, under this Agreement or any of the other Loan
Documents.
"Original Closing Date" shall mean the date upon which the
initial extensions of credit were made pursuant to the Original
Credit Agreement.
"Original Credit Agreement" shall have the meaning given to
such term in the recitals hereof.
"Original Credit Agreement Date" shall mean June 2, 1995.
"Original Lenders" shall mean the banks and other financial
institutions that are "Lenders" (within the meaning of the
Original Credit Agreement) under the Original Credit Agreement as
of the Amendment Effective Date.
"Orion" shall mean Orion Capital Corporation, a Delaware
corporation, and its successors and assigns.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
and any successor thereto.
"Participant" shall have the meaning given to such term in
Section 10.8(d).
"Pension 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.
"Percentage" shall mean, with respect to any Lender at any
time, a fraction (expressed as a percentage) the numerator of
which is the Commitment of such Lender at such time and the
denominator of which is the Total Commitment at such time;
provided that if the Percentage of any Lender is to be determined
after the Commitments have been terminated, then such Percentage
shall be determined immediately prior (and without giving effect)
to such termination.
"Permitted Liens" shall mean any of the following types of
Liens:
(i) Liens created by the Loan Documents;
(ii) Liens in existence on the Amendment Effective Date
and set forth on Schedule 1.1(a);
(iii) Liens imposed by law, such as Liens of carriers,
warehousemen, mechanics, materialmen and landlords, and
other similar Liens incurred in the ordinary course of
business for sums not constituting borrowed money that are
not overdue for a period of more than thirty (30) days or
that are being contested in good faith by appropriate
proceedings and for which adequate reserves have been
established in accordance with Generally Accepted Accounting
Principles or other appropriate provision made therefor;
(iv) Liens (other than any Lien imposed by ERISA)
incurred in the ordinary course of business in connection
with worker's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure
the performance of letters of credit, bids, tenders,
statutory obligations, surety and appeal bonds, leases,
government contracts and other similar obligations (other
than obligations for borrowed money) entered into in the
ordinary course of business;
(v) Liens for taxes, assessments or other governmental
charges or statutory obligations that are not delinquent or
remain payable without any penalty or that are being
contested in good faith by appropriate proceedings and for
which adequate reserves have been
established in accordance with Generally Accepted Accounting
Principles or other appropriate provision made therefor;
(vi) Liens in connection with pledges and deposits made
pursuant to statutory and regulatory requirements of
Insurance Regulatory Authorities by an Insurance Subsidiary
in the ordinary course of its business;
(vii) Purchase money Liens upon property used by the
Borrower or any Subsidiary of the Borrower in the ordinary
course of its business, securing Indebtedness incurred
solely to pay all or a portion of the purchase price thereof
to the extent such Indebtedness is permitted under
Section 7.2(vii), provided that any such Lien (i) shall
attach to such property concurrently or within ten (10) days
after the acquisition thereof by the Borrower or such
Subsidiary, (ii) shall not exceed the lesser of (y) the fair
market value of such property or (z) the cost thereof to the
Borrower or such Subsidiary and (iii) shall not encumber any
other property of the Borrower or any Subsidiary of the
Borrower;
(viii) Any attachment or judgment Lien not constituting
an Event of Default under Section 8.1(l) that is being
contested in good faith by appropriate proceedings and for
which adequate reserves have been established in accordance
with Generally Accepted Accounting Principles or other
appropriate provision made therefor;
(ix) With respect to any real property, all easements,
rights of way, licenses and similar encumbrances on title
that do not materially impair the use of such property for
its intended purposes;
(x) Liens securing obligations of the Borrower not
exceeding $200,000, created pursuant to the settlement of
the actions styled (a) Xxxxx v. Guaranty National
Corporation, et al., filed in the District Court for the
City and County of Denver, Colorado, (b) Xxxxx v. Guaranty
National Corporation, et al., filed in the Supreme Court of
the State of New York, New York County, and (c) Xxxxxx x.
Xxxx, et al., filed in the District Court for the County of
Arapahoe, Colorado;
(xi) Liens arising under insurance holding company
statutes or regulations; and
(xii) Liens arising from the filing, for notice purposes
only, of financing statements regarding operating leases.
"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.
"Plan" shall mean any "employee benefit plan" within the
meaning of Section 3(3) of ERISA that the Borrower or any ERISA
Affiliate maintains, administers, contributes to or is required
to contribute to and that covers any employee or former employee
of the Borrower or any ERISA Affiliate with respect to such
employee's relationship with any of the foregoing, in each case
including, without limitation, all profit-sharing plans, bonus
plans, incentive compensation plans, deferred compensation plans,
retirement plans, stock option plans, stock purchase plans and
health, life and disability benefit plans, and all Pension Plans.
"Pro Rata Share" of any amount shall mean, with respect to
any Lender at any time, the product of (i) such amount,
multiplied by (ii) such Lender's Percentage at such time; except
that, as used in connection with any amount to be paid or
distributed to the Lenders hereunder or under any other Loan
Document, the term "Pro Rata Share" shall mean, with respect to
any Lender at any time, the product of (y) such amount,
multiplied by (z) a fraction (expressed as a percentage) the
numerator of which is the ratable portion of such amount owing to
such Lender and the denominator of which is the aggregate of such
amount.
"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
similarly exempt or exempt by reason of Section 4975(c)(2) or
4975(d) of the Internal Revenue Code.
"Projections" shall have the meaning given to such term in
Section 4.10(b).
"Qualified Plan" shall mean any Pension Plan that is
intended to be tax-qualified under Section 401(a) of the Internal
Revenue Code, and the trust created thereunder that is intended
to be tax-exempt under Section 501(a) of the Internal Revenue
Code, and that the Borrower or any ERISA Affiliate sponsors or
maintains or to which it makes or is obligated to make
contributions, or, in the case of a "multiple employer plan"
within the meaning of Section 4064(a) of ERISA, has made
contributions at any time during the immediately preceding five-
plan year period, but excluding any Multiemployer Plan.
"Quarterly Statement" shall mean, with respect to any
Insurance Subsidiary for any fiscal quarter, the quarterly
financial statements of such Insurance Subsidiary as required to
be filed with the Insurance Regulatory Authority of its
jurisdiction of domicile, together with all exhibits, schedules,
certificates and actuarial opinions required to be filed or
delivered therewith.
"Rate Calculation Worksheet" shall mean a fully completed
worksheet in the form of Attachment B to Exhibit C.
"Register" shall have the meaning given to such term in
Section 10.8(b).
"Regulations D, G, T, U and X" shall mean Regulations D, G,
T, U and X, respectively, of the Federal Reserve Board, as in
effect from time to time, and any successor regulations.
"Reinsurance Agreement" shall mean any agreement, contract,
treaty, certificate or other arrangement whereby any Insurance
Subsidiary agrees to transfer, cede or retrocede to another
insurer or reinsurer all or part of the liability assumed by such
Insurance Subsidiary under a policy or policies of insurance
issued by such Insurance Subsidiary.
"Reportable Event" shall mean (i) a "reportable event"
within the meaning of Section 4043(b) of ERISA for which the 30-
day notice has not been waived by the PBGC, (ii) a withdrawal
from a plan described in Section 4063 of ERISA or (iii) a
cessation of operations described in Section 4062(e) of ERISA.
"Required Lenders" shall mean, at any time, the Lenders
providing sixty-six and two-thirds percent (66 2/3%) or more of
the aggregate principal amount of the Loans outstanding at such
time or, in the event no Loans are outstanding at such time, the
Lenders having sixty-six and two-thirds percent (66 2/3%) or more
of the Total Commitment at such time.
"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 Loan Documents.
"Reserve Requirement" shall mean, with respect to any
Interest Period, the reserve percentage (expressed as a decimal)
applicable two (2) Business Days before the first day of such
Interest Period determined by the Agent to be in effect on such
day, 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 First Union under Regulation D of the Board of
Governors of the Federal Reserve System 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.
"Senior Financial Officer" shall mean, with respect to the
Borrower, the chief financial officer, vice president-finance,
treasurer or other officer of the Borrower who has primary
overall responsibility for the management of the financial
affairs of the Borrower and its Subsidiaries.
"Significant Subsidiary" shall mean, at the relevant time of
determination, any Subsidiary of the Borrower the assets of which
comprise greater than five percent (5%) of Consolidated Total
Assets at such time or (if an Insurance Subsidiary) the Net
Written Premiums of which at such time comprise greater than
three percent (3%) of Combined Net Written Premiums for the prior
fiscal year.
"Standard & Poor's" shall mean Standard & Poor's Ratings
Services, a division of XxXxxx-Xxxx, Inc., and its successors and
assigns.
"Statutory Accounting Principles" shall mean, with respect
to any Insurance Subsidiary, the statutory accounting practices
prescribed or permitted by the relevant Insurance Regulatory
Authority of its state of domicile, consistently applied and
maintained and in conformity with those used in the preparation
of the most recent Historical Financial Statements and containing
disclosure of the effect on the financial position or results of
operations of any material change in the application of
accounting principles and practices during the relevant reporting
period.
"Statutory Surplus" shall mean, with respect to any
Insurance Subsidiary at any time, the amount shown on line 25,
page 3, column 1 of the Annual Statement of such Insurance
Subsidiary, or the amount determined in a consistent manner for
any date other than a date as of which an Annual Statement of
such Insurance Subsidiary is prepared.
"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, in the case
of a corporation, or of the ownership or beneficial interests, in
the case of a Person not a corporation, 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);
provided, however, that, notwithstanding the foregoing, Viking
County Mutual Insurance Company shall not be considered a
Subsidiary of the Borrower for any purpose hereunder. When used
without reference to a parent entity, the term "Subsidiary" shall
be deemed to refer to a Subsidiary of the Borrower.
"Talegen" shall mean Talegen Holdings, Inc., a Delaware
corporation.
"Total Commitment" shall mean, at any time, the sum of the
Commitments of each Lender at such time.
"Total Unutilized Commitment" shall mean, at any time, the
sum of the Unutilized Commitments of each Lender at such time.
"Unfunded Pension Liabilities" shall mean the excess of a
Pension Plan's accrued benefits, within the meaning of
Section 3(23) of ERISA, over the current value of its assets,
within the meaning of Section 3(26) of ERISA.
"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.
"VICW" shall mean Viking Insurance Company of Wisconsin, a
Wisconsin corporation that is a Wholly Owned Subsidiary of the
Borrower.
"Viking Holdings" shall mean Viking Insurance Holdings,
Inc., a Delaware corporation that is a Wholly Owned Subsidiary of
the Borrower and the parent corporation of VICW.
"Wholly Owned" shall mean, with respect to any Subsidiary of
the Borrower, that 100% of the outstanding capital stock or other
ownership interests of such Subsidiary is owned, directly or
indirectly, by the Borrower.
1.2 Accounting Terms. 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 Generally Accepted Accounting
Principles (or, to the extent that such terms apply solely to any
Insurance Subsidiary or if otherwise expressly required,
Statutory Accounting Principles). Notwithstanding the foregoing,
in the event that any changes in Generally Accepted Accounting
Principles or Statutory Accounting Principles after the date
hereof are required to be applied to the transactions described
herein and would affect the computation of the financial
covenants contained in Sections 6.1 through 6.5, as applicable,
such changes shall be followed only from and after the date this
Agreement shall have been amended to take into account any such
changes. References to amounts on particular
exhibits, schedules, lines, pages and columns of any Annual
Statement or Quarterly Statement are based on the format
promulgated by the NAIC for the 1995 Annual Statements and
Quarterly Statements. In the event such format is changed in
future years so that different information is contained in such
items or they no longer exist, or if the Annual Statement or
Quarterly Statement is replaced by the NAIC or by any Insurance
Regulatory Authority after the date hereof such that different
forms of financial statements are required to be furnished by the
Insurance Subsidiaries in lieu thereof, such references shall be
to information consistent with that reported in the referenced
item in the 1995 Annual Statements or Quarterly Statements, as
the case may be.
1.3 Other Terms; Construction. 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 Loan Document or any
certificate or other document made or delivered pursuant hereto.
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
2.8. The Loans. (a) Each Lender severally agrees, subject
to and on the terms and conditions of this Agreement, to make
revolving credit 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 Amendment Effective Date
to but not including the Facility Termination Date, in an
aggregate principal amount at any time outstanding not exceeding
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 Total Commitment at such time. Subject to and
on the terms and conditions of this Agreement, the Borrower may
borrow, repay and reborrow Loans.
(b) 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 such type of Loan, a
"Type"), provided that all Loans comprising the same Borrowing
shall, unless otherwise specifically provided herein, be of the
same Type.
(c) The aggregate principal amount of all Loans (as defined
in the Original Credit Agreement) made pursuant to the Original
Credit Agreement and outstanding on the Amendment Effective Date
(collectively, the "Existing Loans") is $100,000,000. On the
Amendment Effective Date, and after giving effect to the
concurrent assignment and purchase of a portion of the Existing
Loans among the Lenders in accordance with Section 2.18, the
aggregate outstanding principal amount of all Existing Loans
shall automatically be converted to an equivalent principal
amount of Loans hereunder, made by the Lenders ratably in
accordance with their respective Commitments, and for all
purposes of this Agreement shall be deemed to be Loans hereunder
and entitled to the benefits of this Agreement and the other Loan
Documents.
2.2. Borrowings. (a) Whenever the Borrower desires to make
a Borrowing (other than continuations or conversions of
outstanding Loans, which shall be made pursuant to Section 2.9)
under the Facility, the Borrower will give the Agent oral or
written notice (by telecopier or
otherwise), prior to 11:00 a.m., Charlotte time, at least three
(3) Business Days prior to each Borrowing to be comprised of
LIBOR Loans and at least one (1) Business Day prior to each
Borrowing to be comprised of Base Rate Loans. Each such notice
(each, a "Notice of Borrowing") shall be irrevocable, shall be
given in the form of Exhibit B-1 (or, if oral notice is given,
shall be promptly followed, by telecopier or otherwise, with a
writing in the form of Exhibit B-1) and shall be appropriately
completed to specify (i) the aggregate principal amount and Type
of the Loans to be made pursuant to such Borrowing (and, in the
case of a Borrowing of LIBOR Loans, the initial Interest Period
to be applicable thereto) and (ii) the requested date of the
Borrowing (the "Borrowing Date"), which shall be a Business Day.
Notwithstanding anything to the contrary contained herein:
(i) the aggregate principal amount of each Borrowing
hereunder (y) in the case of Borrowings comprised of Base
Rate Loans, shall not be less than $1,000,000 and, if
greater, shall be in an integral multiple of $100,000 in
excess thereof (or, if less, in the amount of the Total
Unutilized Commitment), and (z) in the case of Borrowings
comprised of LIBOR Loans, shall not be less than $5,000,000
and, if greater, shall be in an integral multiple of
$1,000,000 in excess thereof;
(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.
(b) Upon the receipt of a Notice of Borrowing, the Agent
will promptly notify each Lender of the proposed Borrowing, of
such Lender's Pro Rata Share thereof and of the other matters
specified in the Notice of Borrowing. Each Lender will make the
amount of its Pro Rata Share of such Borrowing available to the
Agent at its office referred to in Section 10.4, for the account
of the Borrower, in Dollars and in immediately available funds,
prior to 1:00 p.m, Charlotte time, on the Borrowing Date. To the
extent the Lenders have made such amounts available to the Agent
as provided hereinabove, the Agent will make the aggregate of
such amounts available to the Borrower in accordance with
subsection (e) below and in like funds as received by the Agent.
(c) Unless the Agent has received, prior to 1:00 p.m.,
Charlotte time, on any Borrowing Date, written notice from a
Lender that such Lender will not make available to the Agent its
Pro Rata Share of the relevant Borrowing (which notice shall, if
so received, be forwarded promptly upon receipt to the Borrower),
the Agent may assume that such Lender has made its Pro Rata Share
of such Borrowing available to the Agent on such Borrowing Date
in accordance with subsection (b) above, and the Agent may, in
reliance upon such assumption, but shall not be obligated to,
make a corresponding amount available to the Borrower on such
Borrowing Date. If and to the extent that such Lender shall not
have made such Pro Rata Share available to the Agent, and the
Agent shall have made such corresponding amount available to the
Borrower, such Lender, on the one hand, and the Borrower, on the
other (but without prejudice to the Borrower's rights under
Section 2.17), severally agree to pay to the Agent forthwith on
demand such corresponding amount, together with interest thereon
for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Agent,
(i) if recovered from such Lender, at the Federal Funds Rate for
the first three (3) Business Days and thereafter at the Base
Rate, and (ii) if recovered from the
Borrower, at the rate of interest payable by the Borrower
hereunder in respect of the Loans comprising such Borrowing. If
such Lender shall repay to the Agent such corresponding amount,
such amount so repaid shall constitute such Lender's Loan as part
of such Borrowing for purposes of this Agreement. Nothing in
this subsection (c), however, shall relieve any Lender of its
obligation to make available to the Agent its Pro Rata Share of
any Borrowing, subject to and in accordance with the terms
hereof.
(d) 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 on the respective Borrowing Date, 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.
(e) The Borrower hereby authorizes the Agent to disburse
the proceeds of each Borrowing in accordance with the terms of
any written instructions from any of the Authorized Officers,
provided that the Agent shall not be obligated under any
circumstances to forward amounts to any account not listed in an
Account Designation Letter. Without limiting the obligation of
the Borrower to confirm in writing any telephonic Notice of
Borrowing, the Agent may act without liability upon the basis of
any telephonic Notice of Borrowing believed by the Agent in good
faith to be from any such officer prior to receipt of written
confirmation. The Borrower may at any time deliver to the Agent
an Account Designation Letter listing any additional accounts or
deleting any accounts listed in a previous Account Designation
Letter.
2.3. Notes. (a) The Loans made by each Lender shall be
evidenced by a Note appropriately completed in substantially the
form of Exhibit A.
(b) The Note issued to each Lender shall (i) be executed by
the Borrower, (ii) be payable to the order of such Lender,
(iii) be dated as of the Amendment Effective Date (or, in the
case of Notes issued pursuant to an Assignment and Acceptance, as
of the date thereof), (iv) be in a stated principal amount equal
to such Lender's Commitment, (v) bear interest in accordance with
the provisions of Section 2.6, as the same may be applicable to
the Loans made by such Lender from time to time, and (vi) be
entitled to all of the benefits of this Agreement and the other
Loan Documents and subject to the provisions hereof and thereof.
(c) Each Lender will record on its internal records the
amount of each Loan made by it and each payment received by it in
respect thereof and will, in the event of any transfer of any of
its Notes, either endorse on the reverse side thereof the
outstanding principal amount of the Loans evidenced thereby as of
the date of transfer or provide such information on Schedule I to
the Assignment and Acceptance relating to such transfer;
provided, however, that the failure of any Lender to make any
such recordation or provide any such information, or any error in
such recordation or information, shall not affect the Borrower's
obligations in respect of such Loans.
2.4. Termination, Reduction of Commitments. (a) At any
time and from time to time, the Borrower may terminate in whole
or reduce in part the Total Unutilized Commitment by giving the
Agent written notice (by telecopier or otherwise), prior to 11:00
a.m., Charlotte time, at least five (5) Business Days prior to
the proposed effective date of such termination or reduction,
which notice shall specify the proposed effective date thereof
(which shall be a Business Day) and the amount of any reduction;
provided that any such reduction shall be in an aggregate amount
of not less than $5,000,000 or, if greater, shall be in an
integral multiple of $1,000,000 in excess thereof. Upon its
receipt of any such notice of termination or reduction, the Agent
will promptly notify each Lender thereof. Any such termination
or reduction shall be effective on the date specified in such
notice. The amount of any termination or partial reduction made
under this subsection (a) may not thereafter be reinstated.
(b) On each date set forth below, the Total Commitment
shall automatically be permanently reduced by the amount set
forth below opposite such date (such amounts being subject to
reduction as set forth in subsection (c) below):
Amount of Reduction in
Date Total Commitment
April 15, 1998 $10,000,000
April 15, 1999 22,000,000
April 15, 2000 24,000,000
April 15, 2001 26,000,000
April 15, 2002 28,000,000
(c) Each reduction of the Total Commitment under
subsections (a) or (b) above shall be applied ratably among the
Commitments of the Lenders according to their respective
Percentages and, in the case of voluntary reductions under
subsection (a) above, shall be applied to reduce the scheduled
reduction amounts set forth in the table in subsection (b) above
ratably in accordance with their respective dollar amounts.
After any such reduction, the fees provided for in Section 2.7(b)
shall be calculated with respect to the reduced Commitments.
(d) The Total Commitment, and the Commitment of each
Lender, shall terminate in its entirety on the Facility
Termination Date.
2.5. Payments; Voluntary, Mandatory. (a) The Borrower
shall have the right from time to time to prepay the Loans, in
whole or in part, without premium or penalty (except as provided
in clause (iii) below), upon written notice to the Agent prior to
11:00 a.m., Charlotte time, at least three (3) Business Days
prior to each intended prepayment of LIBOR Loans and at least one
(1) Business Day prior to each intended prepayment of Base Rate
Loans, provided that (i) each partial prepayment of Base Rate
Loans shall be in an aggregate principal amount of no less than
$1,000,000 or, if greater, shall be in an integral multiple of
$100,000 in excess thereof (or, if the aggregate principal amount
of Base Rate Loans then outstanding is less than $1,000,000, such
outstanding amount), and each partial prepayment of LIBOR Loans
shall be in an aggregate principal amount of no less than
$5,000,000 or, if greater, shall be in 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
outstanding principal amount of the remaining LIBOR Loans under
such Borrowing to less than $5,000,000 and (iii) unless made
together with all amounts required under Section 2.16 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
the Types of the Loans to be prepaid (and, in the case of LIBOR
Loans, the specific Borrowing or Borrowings pursuant to which
made) and shall be irrevocable and shall bind the Borrower to
make such prepayment on the terms specified therein. Amounts
prepaid pursuant to this subsection (a) may be reborrowed,
subject to the terms and conditions of this Agreement.
(b) In the event that the aggregate principal amount of the
Loans outstanding on any date (including any date set forth in
the table in Section 2.4(b)) exceeds the Total Commitment as of
such date (after giving effect to any termination or reduction
thereof as of such date, including any reduction provided for in
such table), the Borrower will repay the principal amount of the
Loans on such date in the amount of such excess.
(c) The Borrower will repay the outstanding principal
amount of the Loans in full on the Facility Expiry Date, unless
due or made sooner pursuant to the terms and conditions of this
Agreement.
(d) Each payment of a LIBOR Loan made pursuant to the
provisions of this Section 2.5 on a day other than the last day
of the Interest Period applicable thereto shall be made together
with all amounts required under Section 2.16 to be paid as a
consequence thereof.
2.6. 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) Any principal amounts of the Loans not paid when due
and, to the greatest extent permitted by law, all interest
accrued on the Loans and all other fees and amounts hereunder not
paid when due (whether at maturity, pursuant to acceleration or
otherwise), shall bear interest at a rate 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% per
annum (or, in the case of fees and other amounts, at the Base
Rate plus 2% per annum), and, in each case, such default interest
shall be payable on demand. To the greatest extent permitted by
law, interest shall continue to accrue after the filing by or
against the Borrower of any petition seeking any relief in
bankruptcy or under any law pertaining to insolvency or debtor
relief.
(c) Accrued (and theretofore unpaid) interest shall be
payable as follows:
(i) in respect of each Base Rate Loan (including any
Base Rate Loan or portion thereof paid or prepaid pursuant
to the provisions of Section 2.5, except as provided
hereinbelow), in arrears on the last Business Day of each
calendar quarter; 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 2.5, 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 2.8) and (z) in the case of a LIBOR
Loan having an Interest Period of six months, on the date
three months after the first day of such Interest Period;
provided, that in the event all LIBOR 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
Loan Document shall be deemed to establish or require the payment
of interest to any Lender at a rate in excess of the maximum rate
permitted by applicable law. If the amount of interest payable
for the account of any Lender on any interest payment date would
exceed the maximum amount permitted by applicable law to be
charged by such Lender, the amount of interest payable for its
account on such interest payment date shall be automatically
reduced to such maximum permissible amount. In the event of any
such reduction affecting any Lender, if from time to time
thereafter the amount of interest payable for the account of such
Lender on any interest payment 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
after its receipt of the relevant Notice of Borrowing or Notice
of Conversion/Continuation; provided, however, that the failure
of the Agent to provide the Borrower or the Lenders with any such
notice shall neither affect any obligations of the Borrower or
the Lenders hereunder nor result in any liability on the part of
the Agent to the Borrower or any Lender. Each such determination
(including each determination of the Reserve Requirement in
connection with a Borrowing of LIBOR Loans) shall, absent
manifest error, be final and conclusive and binding on all
parties hereto.
2.7. Fees. The Borrower agrees to pay:
(a) To First Union, for its own account, on the Amendment
Effective Date, the fee described in paragraph (1) of the Fee
Letter, in the amount set forth therein and to the extent not
theretofore paid to First Union;
(b) To the Agent, for the account of each Lender that is a
party to this Agreement as of the Amendment Effective Date, on
the Amendment Effective Date, the fee described in paragraph (2)
of the Fee Letter, in the amount set forth therein and to the
extent not theretofore paid to the Agent;
(c) To the Agent, for the account of each Lender, a
commitment fee for the period from the Original Credit Agreement
Date to the Facility Termination Date, at the Applicable
Commitment Fee Rate on the average daily Unutilized Commitment of
such Lender, payable in arrears (i) on the last Business Day of
each calendar quarter and (ii) on the Facility Termination Date;
and
(d) To the Agent, for its own account, the annual
administrative fee described in paragraph (3) of the Fee Letter,
on the terms, in the amount and at the times set forth therein.
2.8. Interest Periods. Concurrently with the giving of any
Notice of Borrowing or Notice of Conversion/Continuation in
respect of any Borrowing comprised of 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 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
three (3) separate Interest Periods at any one time;
(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 Facility Expiry Date;
(vi) no Interest Period may be selected that would end
after a scheduled date for repayment of principal of the
Loans (including any date of a scheduled mandatory reduction
of the Total Commitment) occurring on or after the first day
of such Interest Period unless, immediately after giving
effect to such selection, the sum of (y) the aggregate
principal amount of Loans that are Base Rate Loans or that
have Interest Periods expiring on or before such principal
repayment date plus (z) the Total Unutilized Commitment as
of such date, equals or exceeds the principal amount
required to be paid on such principal repayment date;
(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; and
(viii) if, upon the expiration of any Interest
Period applicable to a Borrowing of LIBOR Loans, the
Borrower shall have failed to elect a new Interest Period to
be applicable to such LIBOR Loans, then the Borrower shall
be deemed to have elected to convert such LIBOR Loans into
Base Rate Loans as of the expiration of the then current
Interest Period applicable thereto.
2.9. 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 having the
same Interest Period into Base Rate Loans, or (ii) to continue
all or a portion of the outstanding principal amount of any LIBOR
Loans having the same Interest Period for an additional Interest
Period, provided that (x) any such conversion or continuation
shall involve an aggregate principal amount of Loans 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 made pursuant to a single 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 2.14(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 2.16 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
delivering oral or written notice (by telecopier or otherwise) to
the Agent prior to 11:00 a.m., Charlotte time, at least three (3)
Business Days prior to the effective date of any conversion of
Base Rate Loans into, or continuation of, LIBOR Loans and at
least one (1) Business Day prior to the 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 (or, if
oral notice is given, shall be promptly followed, by telecopier
or otherwise, with a writing in the form of Exhibit B-2) and
shall be appropriately completed to specify (x) the date of such
conversion or continuation (which shall be a Business Day),
(y) in the case of a conversion into, or a continuation of, LIBOR
Loans, the Interest Period to be applicable thereto and (z) the
aggregate amount and Type of the Loans being converted or
continued. Upon the receipt of a Notice of
Conversion/Continuation, the Agent will promptly notify the Agent
and each Lender of the proposed conversion or continuation, of
such Lender's Pro Rata Share thereof and of the other matters
specified in such notice. 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.
2.10. Method of Payments; Computations. (a) All payments
by the Borrower hereunder and under the Notes shall be made
without setoff, counterclaim or other defense, in Dollars and in
immediately available funds to the Agent, for the account of the
Lenders (except as otherwise provided in Sections 2.7(a), 2.7(c),
2.14, 2.15, 2.16, 2.17, 9.7, 10.5 and 10.6 as to payments
required to be made directly to the Agent and the Lenders) at its
office referred to in Section 10.4, prior to 2:00 p.m., Charlotte
time, on the date payment is due. Any payment made as required
hereinabove, but after 2:00 p.m., 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 clause (iv) in Section 2.8 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 Agent will distribute to the Lenders like amounts
relating to payments made to the Agent for the account of the
Lenders as follows: (i) if the payment is received by 2:00 p.m.,
Charlotte time, in immediately available funds, the Agent will
make available to each such 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 the Lenders), and (ii) if
such payment is received after 2:00 p.m., Charlotte time, or in
other than immediately available funds, the Agent will make
available to each such Lender its ratable share of such payment
by wire transfer of immediately available funds on the next
succeeding Business Day (or in the case of uncollected funds, as
soon as
practicable after collected). If the Agent shall not have made a
required distribution to the Lenders as required hereinabove
after receiving a payment for the account of the Lenders, the
Agent will pay to each 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 have been
disbursed by the Agent until the date repaid to such Lender.
(c) Unless the Agent shall have received written notice
from the Borrower prior to the date on which any payment is due
to any Lender hereunder that such payment will not be made in
full (which notice shall, if so received, be forwarded promptly
upon receipt to the Borrower), the Agent may assume that the
Borrower has made such payment in full to the Agent on such date,
and the Agent may, in reliance on such assumption, but shall not
be obligated to, cause to be distributed to each such Lender on
such due date an amount equal to the amount then due to such
Lender. If and to the extent the Borrower shall not have so made
such payment in full to the Agent, each such Lender shall repay
to the Agent forthwith on demand such amount so distributed to
such Lender, together with interest thereon for each day from the
date such amount is so distributed to such Lender until the date
repaid to the Agent, at the Federal Funds Rate for the first
three (3) Business Days and thereafter at the Base Rate.
(d) With respect to each payment on the Loans hereunder,
except as specifically provided otherwise herein or in any of the
other Loan Documents, the Borrower may designate by written
notice to the Agent prior to or concurrently with such payment
the Types of Loans that are to be repaid or prepaid and, in the
case of LIBOR Loans, the specific Borrowing or Borrowings
pursuant to which made, provided that (i) unless made together
with all amounts required under Section 2.16 to be paid as a
consequence thereof, a prepayment of a LIBOR Loan may be made
only on the last day of the Interest Period applicable thereto
and (ii) each prepayment of Loans comprising a single Borrowing
shall be applied pro rata among such Loans. In the absence of
any such designation by the Borrower, the Agent shall, subject to
the foregoing, make such designation in its sole discretion.
(e) All computations of interest and fees hereunder
(including computations of the Reserve Requirement) shall be made
on the basis of a year consisting of 360 days and the actual
number of days (including the first day, but excluding the last
day) elapsed.
2.11. Recovery of Payments. (a) The Borrower agrees that
to the extent the Borrower makes a payment or payments to or for
the account of the Agent or any Lender, which payment or payments
or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to
a trustee, receiver or any other party under any bankruptcy,
insolvency or similar state or federal law, common law or
equitable cause, then, to the extent of such payment or
repayment, the Obligation intended to be satisfied shall be
revived and continued in full force and effect as if such payment
had not been received.
(b) If any amounts distributed by the Agent to a Lender
are subsequently returned or repaid by the Agent to the Borrower
or its representative or successor in interest, whether by court
order or by settlement approved by the Lender in question, such
Lender will, promptly upon receipt of notice thereof from the
Agent, pay the Agent such amount. If any such amounts are
recovered by the Agent from the Borrower or its representative or
successor in interest, the Agent will redistribute such amounts
to the Lenders on the same basis as such amounts were originally
distributed.
2.12. Use of Proceeds._. The proceeds of the Loans (as
defined in the Original Credit Agreement) made pursuant to the
Original Credit Agreement were used to finance the Acquisition
(as defined in the Original Credit Agreement), to repay the
Terminating Senior Indebtedness (as defined in the Original
Credit Agreement) in full, to pay or reimburse transaction fees
and expenses in connection with the consummation of the
Acquisition and the transactions contemplated by the Original
Credit Agreement, and thereafter for working capital and general
corporate purposes. The proceeds of the Loans made on or after
the Amendment Effective Date will be used for working capital and
general corporate purposes.
2.13. Pro Rata Borrowings. (a) All funding of Borrowings,
continuations and conversions of Loans shall be made by the
Lenders pro rata on the basis of their respective Percentages (in
the case of the initial funding of any Loans pursuant to
Section 2.2) or Loans (in the case of continuations and
conversions of outstanding Loans pursuant to Section 2.9), as
applicable from time to time, rounded to the nearest xxxxx.
(b) Each Lender agrees that if it shall at any time
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, enforcement of any
right under the Loan Documents, or otherwise) applicable to the
payment of any 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, such
Lender shall forthwith purchase from the other Lenders such
participations in such Obligations as shall be necessary to cause
such purchasing Lender to share the excess payment or other
recovery ratably with each of them; provided, however, that if
all or any portion of such excess payment is thereafter recovered
from such purchasing Lender, such purchase from each such other
Lender shall be rescinded and each such other Lender shall repay
to the purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such other Lender's
ratable share (according to the proportion of (i) the amount of
such other Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the
total amount so recovered. The Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to the
provisions of this subsection may, to the fullest extent
permitted by law, exercise any and all rights of payment
(including, without limitation, setoff, banker's lien or
counterclaim) with respect to such participation as fully as if
such participant were a direct creditor of the Borrower in the
amount of such participation.
2.14. Increased Costs; Change in Circumstances; Illegality;
etc. (a) If, at any time after the date hereof and from time to
time, by reason of (i) the introduction of or any change in any
applicable law, rule or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with
the interpretation or administration thereof or (ii) compliance
with any guideline or request from any such Governmental
Authority (whether or not having the force of law), there shall
be any increase in the costs to any Lender of agreeing to make,
making, funding or maintaining any LIBOR Loans or other reduction
in any amount received or receivable by such Lender hereunder in
respect of its LIBOR Loans (other than by reason of any change in
the Reserve Requirement or any change in the rate or basis of tax
on the overall net income of such Lender or its applicable
lending office imposed by the jurisdiction in which such Lender's
principal office or applicable lending office is located), the
Borrower will, within fifteen (15) days after delivery to the
Borrower by such Lender of written demand therefor (with a copy
thereof to the Agent), pay to such
Lender such additional amounts as shall compensate such Lender
for such increase in costs or reduction in return.
(b) If, at any time after the date hereof and from time to
time, any Lender shall have reasonably determined that (i) the
introduction of or any change in any applicable law, rule or
regulation regarding capital adequacy or in the interpretation or
administration thereof by any Governmental Authority charged with
the interpretation or administration thereof or (ii) 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 reducing the rate of return on such Lender's
capital as a consequence of its Commitment or Loans to a level
below that which such Lender could have achieved but for such
introduction, change or compliance (taking into account such
Lender's policies with respect to capital adequacy), the Borrower
will, within fifteen (15) days after delivery to the Borrower by
such Lender of written demand therefor (with a copy thereof to
the Agent), pay to such Lender such additional amounts as will
compensate such Lender for such reduction in return.
(c) If, on or prior to the first day of any Interest
Period, (i) the Agent shall have determined that adequate and
reasonable means do not exist for ascertaining the applicable
LIBOR Rate for such Interest Period or (ii) the Agent shall have
received written notice from the Required Lenders of their
determination that the rate of interest referred to in the
definition of "LIBOR Rate" upon the basis of which the 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 Agent will forthwith so notify the Borrower
and the Lenders, whereupon the obligation of all 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 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, until the Agent or the Required Lenders, as the
case may be, shall have determined that the circumstances giving
rise to such suspension no longer exist (and the Required
Lenders, if making such determination, shall have so notified the
Agent), and the Agent shall have so notified the Borrower and the
Lenders.
(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 (i) the
introduction of or any change in any applicable law, rule or
regulation or in the interpretation or administration thereof by
any Governmental Authority charged with the interpretation or
administration thereof or (ii) compliance with any guideline or
request from any such Governmental Authority (whether or not
having the force of law), has or would have the effect of making
it unlawful for such Lender to make or to continue to make or
maintain LIBOR Loans, such Lender will forthwith so notify the
Agent and the Borrower, whereupon (y) each of such Lender's
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), be
converted into a Base Rate Loan, and (z) the obligation of such
Lender 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 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 Base Rate Loans, until such
Lender shall have determined that the circumstances giving rise
to such suspension no longer exist and shall have so notified the
Agent, and the Agent shall have so notified the Borrower.
(e) Determinations by the Agent or any Lender for purposes
of this Section 2.14 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. No failure by the Agent
or any Lender at any time to demand payment of any amounts
payable under this Section 2.14 shall constitute a waiver of its
right to demand payment of any additional amounts arising at any
subsequent time. Nothing in this Section 2.14 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.
2.15. Taxes. (a) Any and all payments by the Borrower
hereunder or under any Note shall be made, in accordance with the
terms hereof and thereof, free and clear of and without deduction
for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with
respect thereto, other than net income and franchise taxes
imposed on the Agent or any Lender by the United States or by the
jurisdiction under the laws of which the Agent or Lender, as the
case may be, is organized or in which its principal office or (in
the case of a Lender) its applicable lending office is located or
any political subdivision or taxing authority thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under
any Note to the Agent or any Lender, (i) the sum payable shall be
increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums
payable under this Section 2.15), the Agent or Lender, as the
case may be, receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower will
make such deductions, (iii) the Borrower will pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) the Borrower will deliver
to the Agent or Lender, as the case may be, evidence of such
payment.
(b) The Borrower will indemnify the Agent and each Lender
for the full amount of Taxes (including, without limitation, any
Taxes imposed by any jurisdiction on amounts payable under this
Section 2.15) paid by the Agent or Lender, as the case may be,
and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such
Taxes were correctly or legally asserted. This indemnification
shall be made within 30 days from the date the Agent or any
Lender, as the case may be, makes written demand therefor.
(c) If any Lender is a "foreign corporation, partnership
or trust" within the meaning of the Internal Revenue Code, and
such Lender claims exemption from United States withholding tax
under Section 1441 or 1442 of the Internal Revenue Code, such
Lender will deliver to each of the Agent and the Borrower, on or
prior to the Amendment Effective Date (if not previously
delivered pursuant to the Original Credit Agreement) or, if such
Lender becomes a party hereto after the Amendment Effective Date,
concurrently with the delivery of the relevant Assignment and
Acceptance, a properly completed Internal Revenue Service Form
4224 or 1001, as applicable (or successor forms), certifying that
such Lender is entitled to an exemption from or a reduction of
withholding or deduction for or on account of United States
federal income taxes in connection with payments under this
Agreement or any of the Notes, together with a properly completed
Internal Revenue Service Form W-8 or W-9, as applicable (or
successor forms). Each such Lender further agrees to deliver to
each of the Agent and the Borrower an additional copy of each
such relevant form on or before the date that such form expires
(currently, three successive calendar years for Form 1001 and one
calendar year for Form 4224) or becomes obsolete or after the
occurrence of any event
requiring a change in the most recent forms so delivered by it,
in each case certifying that such Lender is entitled to an
exemption from or a reduction of withholding or deduction for or
on account of United States federal income taxes in connection
with payments under this Agreement or any of the Notes, unless an
event (including, without limitation, any change in treaty, law
or regulation) has occurred prior to the date on which any such
delivery would otherwise be required, which event renders all
such forms inapplicable or the exemption to which such forms
relate unavailable and such Lender notifies the Agent and the
Borrower that it is not entitled to receive payments without
deduction or withholding of United States federal income taxes.
Each such Lender will promptly notify the Agent and the Borrower
of any changes in circumstances that would modify or render
invalid any claimed exemption or reduction.
(d) If any Lender is entitled to a reduction in (and not a
complete exemption from) the applicable withholding tax, the
Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation
required under subsection (c) above are not delivered to the
Agent as therein required, then the Agent may withhold from any
interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding
tax. For purposes of this Section 2.15, a distribution hereunder
by the Agent to or for the account of any Lender shall be deemed
a payment by the Borrower.
(e) If the Internal Revenue Service or any other
Governmental Authority, domestic or foreign, asserts a claim that
the Agent did not properly withhold tax from amounts paid to or
for the account of any Lender (whether because the appropriate
form was not delivered or was not properly executed, because such
Lender failed to notify the Agent of a change in circumstances
that rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason), such Lender shall
indemnify the Agent fully for all amounts paid, directly or
indirectly, by the Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction
on the amounts payable to the Agent under this subsection (e),
together with all costs, expenses and reasonable attorneys' fees
incurred or paid in connection therewith, except to the extent
arising out of or resulting from the gross negligence or willful
misconduct of the Agent.
2.16. Compensation. The Borrower will compensate each
Lender, upon its written request (which request shall set forth
the basis for requesting such compensation in reasonable detail
and shall be copied to the Agent), 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 its
LIBOR Loans) that such Lender may sustain (i) if for any reason
(other than a default by such Lender or the Agent) a Borrowing
of, or conversion of or into, LIBOR Loans does 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 of its LIBOR Loans occurs on a date other than
the last day of an Interest Period applicable thereto, (iii) if
any prepayment of any of its LIBOR Loans 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 LIBOR Loans when due hereunder,
including as a consequence of acceleration of the maturity of
such Loans pursuant to Section 8.2. Calculation of all amounts
payable to a Lender under this Section 2.16 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 each of 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 2.16.
2.17. Replacement of Lenders. 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 2.14(a) or 2.14(b)
or that is entitled to payment of additional amounts under
Section 2.15, (ii) the obligation of which to make or maintain
LIBOR Loans has been suspended under Section 2.14(d) or
(iii) that shall refuse to fund or otherwise default in the
funding of its Pro Rata Share of any Borrowing requested and
permitted to be made by the Borrower hereunder and such refusal
has not been withdrawn or such default has not been cured within
three (3) Business Days after the Borrower has given such Lender
written notice thereof, in any case by written notice to such
Lender and the Agent given no more than thirty (30) days after
any such event and identifying one or more Persons each of which
must be an Eligible Assignee reasonably acceptable to the 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 Agent provided for hereinabove shall specify an
effective date for such replacement (the "Replacement Effective
Date"), which shall be at least ten (10) 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 10.8(a)
(but shall not be required to pay the processing fee otherwise
payable to the Agent pursuant to Section 10.8(a)), pursuant to
which such Replacement Lenders collectively shall acquire, in
such proportion among them as they may agree with the Borrower
and the Agent, all (but not less than all) of the Commitment and
outstanding Loans of the Replaced Lender, and, in connection
therewith, shall pay to (y) the Replaced Lender 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 Pro Rata Share of all accrued but unpaid fees and
expenses owing by the Borrower hereunder, and (z) the Agent, for
its own account, any amounts owing to the Agent by the Replaced
Lender under Section 2.2(c), and (iii) all obligations of the
Borrower due and 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) shall be paid in full by the Borrower to the Replaced
Lender on or prior to the Replacement Effective Date.
2.18. Sale and Assignment of Existing Loans. (a) Each of
the Original Lenders party hereto that is selling Existing Loans
pursuant to this Section 2.18 (each, a "Selling Lender," and
collectively, the "Selling Lenders") hereby represents and
warrants to (i) each of the Lenders party hereto that is not an
Original Lender, and (ii) each other Original Lender party hereto
that is purchasing Existing Loans pursuant to this Section 2.18
(the Lenders described under (i) and (ii), each, a "Purchasing
Lender," and collectively, the "Purchasing Lenders"), that it is
the legal and beneficial owner of the interest in the Existing
Loans being assigned by it hereunder and that such interest is
free and clear of any adverse claim. In order to give effect to
the assignment to the Purchasing Lenders of their respective Pro
Rata Shares of the Existing Loans to be concurrently converted to
Loans hereunder as of the Amendment Effective Date, all as
contemplated hereunder, each Selling Lender shall and does hereby
sell and assign to each Purchasing Lender, without recourse,
representation or warranty (except as set forth in the first
sentence of this subsection (a)), and each Purchasing Lender
shall and does hereby purchase and assume from each Selling
Lender, a portion of all of the rights and obligations of each
Selling Lender with respect to such Existing Loans converted to
Loans hereunder as of the Amendment Effective Date and each of
the Loan Documents,
in each case in the amounts set forth in Annex 2 hereto (the
"Assigned Rights"), such that after giving effect to such sale
and assignment, the Lenders shall own the Existing Loans
converted to Loans hereunder in proportion to their respective
Commitments. Upon payment by the Purchasing Lenders to the
Selling Lenders of the amounts calculated by the Agent pursuant
to subsection (b) below, each Lender shall be entitled to its
respective Pro Rata Share of (y) all interest on and any fees in
respect of the Loans and Commitments payable on and after the
Amendment Effective Date and (z) all payments of principal made
on the Loans attributable to such Lender that occur after the
Amendment Effective Date.
(b) Pursuant to the sale and assignment of the Assigned
Rights to the Purchasing Lenders under this Section 2.18, each
Selling Lender is entitled to receive a payment from each
Purchasing Lender in an amount equal to the portion of such
Selling Lender's Existing Loans representing the Assigned Rights
ratably purchased by each Purchasing Lender. In order to
facilitate and give effect to the sale and assignment of the
Assigned Rights, each of the Selling Lenders and Purchasing
Lenders agrees that (i) the Agent shall calculate the amount
owing to the Selling Lenders and to be paid or funded by the
Purchasing Lenders, (ii) each of the Purchasing Lenders shall pay
or fund, as the case may be, to the Agent the amount specified by
the Agent in writing to such Purchasing Lender, and (iii) the
Agent shall, to the extent such payments or fundings are actually
made, apply such amounts ratably to pay the amount owned to the
Selling Lenders.
ARTICLE III
CONDITIONS OF EFFECTIVENESS AND BORROWING
3.1. Conditions of Loans under Original Credit Agreement.
The obligation of each Lender to make Loans in connection with
the initial Borrowing under the Original Credit Agreement was
subject to the satisfaction of the conditions precedent set forth
in Sections 3.2 and 3.4 of the Original Credit Agreement, and the
obligation of each Lender to make the Acquisition Loans under the
Original Credit Agreement was subject to the satisfaction of the
conditions precedent set forth in Sections 3.3 and 3.4 of the
Original Credit Agreement, which conditions in each case have
heretofore been satisfied (other than the term Original Credit
Agreement, which shall have the meaning given to it in this
Agreement, capitalized terms used in this Section 3.1 without
definition shall, solely for purposes of this Section 3.1, have
the meanings given to them in the Original Credit Agreement).
3.2. Conditions to Effectiveness of this Agreement. The
effectiveness of this Agreement and the amendment and restatement
of the Original Credit Agreement effected hereby is subject to
the satisfaction of the condition set forth in the last sentence
of Section 10.14 and the following conditions precedent:
(a) The Agent shall have received the following, each dated
the Amendment Effective Date (unless otherwise specified) and,
except for the Notes, in sufficient copies for each Lender:
(i) a Note for each Lender that is a party hereto as
of the Amendment Effective Date, in the amount of such
Lender's Commitment and duly completed and executed by the
Borrower;
(ii) a certificate, signed by the chief executive
officer or Senior Financial Officer of the Borrower, in form
and substance satisfactory to the Lenders, certifying that
(i) all representations and warranties of the Borrower
contained in this Agreement and the other Loan Documents are
true and correct as of the Amendment Effective Date (except
to the extent any such representation or warranty is
expressly stated to have been made as of a specific date, in
which case such representation or warranty shall be true and
correct as of such date), (ii) no Default or Event of
Default has occurred and is continuing, (iii) there are no
insurance regulatory proceedings pending or, to such
individual's knowledge, threatened against any of the
Insurance Subsidiaries in any jurisdiction that, if
adversely determined, would be reasonably likely to have a
Material Adverse Effect, and (iv) the Borrower has satisfied
each of the conditions precedent set forth in this
Section 3.2 and Section 3.3;
(iii) a copy, certified by the secretary or an assistant
secretary of the Borrower, of the resolutions adopted by the
board of directors of the Borrower (or the executive
committee thereof) authorizing the execution, delivery and
performance of this Agreement and the other Loan Documents
to which it is a party; and
(iv) a favorable opinion of Ireland, Xxxxxxxxx, Xxxxx &
Xxxxxx, P.C., counsel to the Borrower, addressed to the
Agent and the Lenders, in substantially the form of
Exhibit E and addressing such other matters as the Agent or
any Lender may reasonably request.
(b) The Agent shall have received a certificate as of a
recent date of the good standing of the Borrower under the laws
of the State of Colorado, from the Secretary of State of
Colorado.
(c) All approvals, permits and consents of any Governmental
Authorities (including, without limitation, all relevant
Insurance Regulatory Authorities) or other Persons required in
connection with the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby shall
have been obtained (without the imposition of conditions that are
not reasonably acceptable to each Lender), and all related
filings, if any, shall have been made, and all such approvals,
permits, consents and filings shall be in full force and effect
and the Agent shall have received such copies thereof as it shall
have requested; all applicable waiting periods shall have expired
without any adverse action being taken by any Governmental
Authority having jurisdiction; and no action, proceeding,
investigation, regulation or legislation shall have been
instituted, threatened or proposed before, and no order,
injunction or decree shall have been entered by, any court or
other Governmental Authority, in each case to enjoin, restrain or
prohibit, to obtain substantial damages in respect of, or that is
otherwise related to or arises out of, this Agreement or the
consummation of the transactions contemplated hereby, or that, in
the opinion of the Required Lenders, would otherwise be
reasonably likely to have a Material Adverse Effect.
(d) Each of the representations and warranties contained in
Article IV and in the other Loan Documents shall be true and
correct on and as of the Amendment Effective Date with the same
effect as if made on and as of such date (except to the extent
any such representation or warranty is expressly stated to have
been made as of a specific date, in which case such
representation or warranty shall be true and correct as of such
date).
(e) No Default or Event of Default shall have occurred and
be continuing.
(f) Since December 31, 1995, there shall not have occurred
any Material Adverse Change or any event, condition or state of
facts that could reasonably be expected to have a Material
Adverse Effect.
(g) The Borrower shall have paid (i) to First Union, for
its own account, the unpaid balance of the fee described in
paragraph (1) of the Fee Letter, (ii) to the Agent, for the
account of each Lender that is a party to this Agreement as of
the Amendment Effective Date, the fee described in paragraph (2)
of the Fee Letter, and (iii) all other fees and expenses of the
Agent and the Lenders required hereunder to be paid on or prior
to the Amendment Effective Date (including fees and expenses of
counsel to the Agent) in connection with this Agreement and the
transactions contemplated hereby.
(h) The Agent shall have received an Account Designation
Letter, duly completed and executed by the Borrower.
(i) The Agent and each Lender shall have received such
other documents, certificates, opinions and instruments as it
shall have reasonably requested.
3.3. Conditions to All Loans. The obligation of the Lenders
to make any Loans hereunder is subject to the satisfaction of the
following conditions precedent on the relevant Borrowing Date:
(a) The Agent shall have received a Notice of Borrowing in
accordance with Section 2.2(a).
(b) Each of the representations and warranties contained in
Article IV and in the other Loan Documents shall be true and
correct on and as of the relevant Borrowing Date with the same
effect as if made on and as of such date, both immediately before
and after giving effect to the Loans to be made on such date
(except to the extent any such representation or warranty is
expressly stated to have been made as of a specific date, in
which case such representation or warranty shall be true and
correct as of such date).
(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 or a Notice of
Conversion/Continuation, and the consummation of each Borrowing,
shall be deemed to constitute a representation by the Borrower
that the statements contained in subsections (b) and (c) above
are true, both as of the date of such notice or request and as of
the relevant Borrowing Date.
3.4. No Waiver of Conditions Precedent. If any Lender makes
any Loan prior to the satisfaction of any of the conditions
precedent set forth in this Article III, the making of such Loan
shall constitute only an extension of time for the satisfaction
of such condition and not a waiver thereof, and unless the
Required Lenders indicate otherwise in writing, the Borrower
shall thereafter use its best efforts to cause each such
condition to be satisfied promptly.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into
this Agreement and to extend the credit contemplated hereby, the
Borrower represents and warrants to the Agent and each Lender as
follows:
4.1. Corporate Organization and Power. Each of the Borrower
and its Subsidiaries (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation, (ii) has the full corporate power and
authority to execute, deliver and perform the Loan Documents to
which it is or will be a party, to own and hold its property and
to engage in its business as presently conducted and (iii) is
duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where the nature of its
business or the ownership of its properties requires it to be so
qualified, except where the failure to be so qualified would not,
individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect.
4.2. Authorization; Enforceability. The Borrower has taken
all necessary corporate action to execute, deliver and perform
each of the Loan Documents to which it is or will be a party, and
has, or on any later date of execution and delivery will have,
validly executed and delivered each of the Loan Documents to
which it is or will be a party. This Agreement constitutes, and
each of the other Loan Documents upon execution and delivery will
constitute, the legal, valid and binding obligation of the
Borrower, enforceable against it in accordance with its terms,
except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally or by general equitable
principles.
4.3. No Violation. The execution, delivery and performance
by the Borrower of the Loan Documents, and compliance by it
therewith, do not and will not (i) violate any provision of its
articles or certificate of incorporation or bylaws,
(ii) contravene any applicable Requirement of Law, where such
contravention would be reasonably likely to have a Material
Adverse Effect, (iii) conflict with, result in a breach of or
constitute (with notice, lapse of time or both) a default under
any indenture, loan agreement, mortgage or other material
instrument relating to Indebtedness or any other material lease,
agreement or instrument to which it is a party, by which it or
any of its properties is bound or to which it may be subject, or
(iv) result in or require the creation or imposition of any Lien
upon any of its properties, other than Liens created pursuant to
the Loan Documents.
4.4. Governmental Authorization; Permits. (a) No consent,
approval, authorization, exemption or other action by, notice to,
or filing with, any Governmental Authority or other Person is
required as a condition to or otherwise in connection with the
due execution, delivery and performance by the Borrower of the
Loan Documents or the legality, validity or enforceability hereof
or thereof.
(b) Each of the Borrower and its Subsidiaries has, and is
in good standing with respect to, all governmental approvals,
licenses, permits and authorizations necessary to conduct its
business as presently conducted and to own or lease and operate
its properties, except for those the failure to obtain which
would not be reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect. To the knowledge of the
Borrower, none of such approvals, licenses, permits or
authorizations contains any term, condition or limitation more
burdensome than such as are generally
applicable to Persons engaged in the same or similar business.
Without limitation of the foregoing, Schedule 4.4(b) lists with
respect to each Insurance Subsidiary that is a Significant
Subsidiary, as of the Amendment Effective Date, all of the
jurisdictions in which such Insurance Subsidiary holds licenses
(including, without limitation, licenses or certificates of
authority from relevant Insurance Regulatory Authorities),
permits or authorizations to transact insurance and reinsurance
business (collectively, the "Licenses"), and indicates the line
or lines of insurance in which each such Insurance Subsidiary is
permitted to be engaged with respect to each License therein
listed. To the knowledge of the Borrower, except as set forth on
Schedule 4.4(b), (i) no such License is the subject of a
proceeding for suspension, revocation or limitation or any
similar proceedings, (ii) there is no sustainable basis for such
a suspension, revocation or limitation, and (iii) no such
suspension, revocation or limitation is threatened by any
relevant Insurance Regulatory Authority. No such Insurance
Subsidiary transacts any insurance business, directly or
indirectly, in any jurisdiction other than those listed on
Schedule 4.4(b), where such business requires any license, permit
or other authorization of a Insurance Regulatory Authority of
such jurisdiction, except where the same would not be reasonably
likely, individually or in the aggregate, to have a Material
Adverse Effect.
4.5. Litigation. There are no actions, investigations,
suits or proceedings pending or, to the knowledge of the
Borrower, threatened, at law, in equity or in arbitration, before
any court, other Governmental Authority or other Person,
(i) against or affecting the Borrower, any of its Subsidiaries or
any of their respective properties that would, if adversely
determined, be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect, or (ii) with
respect to this Agreement or any of the other Loan Documents.
4.6. Taxes. Each of the Borrower and its Subsidiaries has
timely filed all tax returns and reports required to be filed by
it and has paid all taxes, assessments, fees and other charges
levied upon it or upon its properties that are shown thereon as
due and payable, other than those that are being contested in
good faith and by proper proceedings and for which adequate
reserves have been established in accordance with Generally
Accepted Accounting Principles. Such returns accurately reflect
in all material respects all liability for taxes of the Borrower
and its Subsidiaries for the periods covered thereby. There is
no action, suit, audit, investigation, assessment, claim or
proceeding pending or, to the knowledge of the Borrower,
threatened, regarding any taxes relating to the Borrower or any
of its Subsidiaries, that would, if adversely determined, be
reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect.
4.7. Subsidiaries. Schedule 4.7 sets forth a list, as of
the Amendment Effective Date, of all of the Subsidiaries of the
Borrower and, as to each such Subsidiary, the jurisdiction of its
incorporation, the percentage ownership (direct and indirect) of
the Borrower in each class of its capital stock, and each direct
owner thereof, and indicates those Subsidiaries that are
Significant Subsidiaries. Except for the shares of capital stock
expressly indicated on Schedule 4.7, there are no shares of
capital stock or warrants, rights, options or other equity
securities of any Subsidiary of the Borrower outstanding or
reserved for any purpose. All outstanding shares of capital
stock of each Subsidiary of the Borrower are duly and validly
issued, fully paid and nonassessable. Each Person indicated on
Schedule 4.7 as the direct owner of the outstanding shares of
capital stock of any Subsidiary of the Borrower is the sole
legal, record and beneficial owner of, and has good and valid
title to, all such capital stock, free and clear of all Liens
other than Permitted Liens.
4.8. Full Disclosure. All factual information heretofore or
contemporaneously furnished to the Agent and the Lenders in
writing by or on behalf of the Borrower or any of its Subsidiaries
(including, without limitation, all information contained in the
Loan Documents) for purposes of or in connection with this
Agreement and the other Loan Documents and the transactions
contemplated hereby and thereby is, and all other such factual
information hereafter furnished to the Agent and the Lenders in
writing by or on behalf of the Borrower or any of its
Subsidiaries will be, taken as a whole, true and accurate in all
material respects on the date as of which such information is
dated or certified (or, if such information has been amended or
supplemented, on the date as of which any such amendment or
supplement is dated or certified) and not made incomplete by
omitting to state a material fact necessary to make the
statements contained therein, taken as a whole together with all
other such information in light of the circumstances under which
such information was provided, not misleading.
4.9. Margin Regulations. Neither the Borrower nor any of
its Subsidiaries is engaged in the business of extending credit
for the purpose of purchasing or carrying Margin Stock. No
proceeds of the Loans will be used, directly or indirectly, to
purchase or carry any Margin Stock, to extend credit for such
purpose or for any other purpose that would violate Regulations
G, T, U or X of the Federal Reserve Board, or any purpose that
would violate any provision of the Exchange Act.
4.10. Financial Matters. (a) The Borrower has heretofore
furnished to the Agent copies of (i) the audited consolidated
balance sheets of the Borrower and its Subsidiaries as of
December 31, 1995, 1994, 1993, and 1992, and the related
statements of income and cash flows for the fiscal years then
ended, and (ii) the unaudited consolidated balance sheet of the
Borrower and its Subsidiaries as of September 30, 1996, and the
related statements of income and cash flows for the nine-month
period then ended (collectively, the "Historical Financial
Statements"). The Historical Financial Statements have been
prepared in accordance with Generally Accepted Accounting
Principles (subject, with respect to the unaudited Historical
Financial Statements, to the absence of notes required by
Generally Accepted Accounting Principles and to normal year-end
audit adjustments) and present fairly the financial position of
the Borrower and its Subsidiaries on a consolidated basis as of
the respective dates thereof and the consolidated results of
operations of the Borrower and its Subsidiaries for the
respective periods then ended. Except as fully reflected in the
most recent Historical Financial Statements and the notes
thereto, there are no material liabilities or obligations with
respect to the Borrower or any of its Subsidiaries of any nature
whatsoever (whether absolute, contingent or otherwise and whether
or not due). Since December 31, 1995, there has been no Material
Adverse Change, and, to the knowledge of the Borrower, no
Material Adverse Change is threatened or reasonably likely to
occur.
(b) In connection with the closing of the transactions
contemplated by the Original Credit Agreement, the Borrower
prepared, and furnished to the Agent copies of, annual projected
balance sheets and statements of income and cash flows of the
Borrower and its Subsidiaries for the eight-year period beginning
January 1, 1995, giving effect to the transactions contemplated
by the Original Credit Agreement (the "Projections"). In the
opinion of the Borrower's management, the assumptions used in
preparation of the Projections were reasonable when made. The
Projections were prepared in good faith by the executive and
financial personnel of the Borrower in light of the historical
financial performance of the Borrower and the financial and
operating condition of the Borrower at the time prepared and, at
such time, represented a reasonable estimate of the future
performance and financial condition of the Borrower and its
Subsidiaries, subject to the uncertainties and approximations
inherent in any projections.
(c) The Borrower has heretofore furnished to the Agent
copies of (i) the Annual Statement of each of the Insurance
Subsidiaries as of December 31, 1995, and for the fiscal year
then ended, each as filed with the relevant Insurance Regulatory
Authority, and (ii) the Quarterly Statement of each of the
Insurance Subsidiaries as of September 30, 1996, and for the nine-
month period then ended, each as filed with the relevant
Insurance Regulatory Authority (collectively, the "Historical
Statutory Statements"). The Historical Statutory Statements
(including, without limitation, the provisions made therein for
investments and the valuation thereof, reserves, policy and
contract claims and Statutory Liabilities) have been prepared in
accordance with Statutory Accounting Principles (except as may be
reflected in the notes thereto and subject, with respect to the
Quarterly Statements, to the absence of notes required by
Statutory Accounting Principles and to normal year-end audit
adjustments), were in compliance with applicable Requirements of
Law when filed and present fairly the financial position of the
respective Insurance Subsidiaries covered thereby as of the
respective dates thereof and the results of operations, changes
in capital and surplus and cash flow of the respective Insurance
Subsidiaries covered thereby for the respective periods then
ended. Except for liabilities and obligations disclosed or
provided for in the Historical Statutory Statements (including,
without limitation, reserves, policy and contract claims and
Statutory Liabilities), no Insurance Subsidiary had, as of the
date of its respective Historical Statutory Statements, any
material liabilities or obligations of any nature whatsoever
(whether absolute, contingent or otherwise and whether or not
due) that, in accordance with Statutory Accounting Principles,
would have been required to have been disclosed or provided for
in such Historical Statutory Statements. All books of account of
each Insurance Subsidiary fully and fairly disclose all of its
material transactions, properties, assets, investments,
liabilities and obligations, are in its possession and are true,
correct and complete in all material respects.
(d) The investments of each of the Insurance Subsidiaries
reflected in its most recently filed Annual Statement and
Quarterly Statement comply in all material respects with all
applicable requirements of the relevant Insurance Regulatory
Authority and of any other Governmental Authority having
jurisdiction over the investment of its funds. The amounts shown
in the most recently filed Annual Statement and Quarterly
Statement for each of the Insurance Subsidiaries for reserves,
policy and contract claims, agents' balances and uncollected
premiums and Statutory Liabilities were computed in accordance
with commonly accepted actuarial standards consistently applied,
were fairly stated in accordance with sound actuarial principles,
were based on actuarial assumptions that were in accordance with
or more stringent than those called for in the insurance policies
and contracts and in the related reinsurance, co-insurance or
similar contracts of such Insurance Subsidiaries, were computed
on the basis of assumptions consistent with those of the
preceding fiscal year, and meet the requirements of each relevant
Insurance Regulatory Authority and of any other Governmental
Authority having jurisdiction. Such reserves as established by
each Insurance Subsidiary were, in the judgment of the Borrower,
adequate as of such date for the payment by such Insurance
Subsidiary of all of its insurance benefits, losses, claims and
investigative expenses. Marketable securities and short-term
investments reflected in each Insurance Subsidiary's most
recently filed Annual Statement and Quarterly Statement are
valued at cost, amortized cost or market value, as required by
applicable Requirements of Law.
4.11. Ownership of Properties. Each of the Borrower and its
Subsidiaries has good and marketable title to all real property
owned by it, holds interests as lessee under valid leases in full
force and effect with respect to all leased real and personal
property used in connection with its business, and has good title
to all of its other properties and assets reflected in the most
recent Historical Financial Statements (except as sold or
otherwise disposed of since the date thereof in the
ordinary course of business), in each case free and clear of all
Liens other than Permitted Liens and in each case except to the
extent the failure to own or hold such property would not be
reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect.
4.12. Plans. (a) Schedule 4.12(a) lists all Plans of the
Borrower and its Subsidiaries in effect as of the Amendment
Effective Date and separately identifies which of such Plans are
intended to be Qualified Plans and Multiemployer Plans. Each
Plan is in compliance in all material respects with all
applicable Requirements of Law, including, without limitation,
the applicable provisions of ERISA and the Internal Revenue Code
(including provisions therein relating to the filing of reports
in respect of such Plan, which reports are true and correct in
all material respects as of the date filed).
(b) Each Qualified Plan has an Internal Revenue Service
favorable determination letter indicating that such Plan is
qualified and that the trust created thereunder is exempt from
tax under the provisions of Section 501 of the Internal Revenue
Code, or the remedial amendment period under Section 401(b) of
the Internal Revenue Code within which such a determination may
be applied for has not yet expired (or an application for such
determination is pending before the Internal Revenue Service),
and, to the knowledge of the Borrower, nothing has occurred that
would cause the loss of such qualified or tax-exempt status or
would cause the Internal Revenue Service not to issue any such
determination.
(c) Except as disclosed on Schedule 4.12(c), no Plan
provides medical or other welfare benefits or extends coverage
relating to such benefits beyond the date of a participant's
termination of employment, except to the extent required by
Section 4980B of the Internal Revenue Code and at the sole
expense of the participant or the beneficiary of the participant
to the fullest extent permissible under Section 4980B of the
Internal Revenue Code. The Borrower and each ERISA Affiliate
have complied in all material respects with the notice and
continuation coverage requirements of Section 4980B of the
Internal Revenue Code.
(d) No ERISA Event has occurred (except with respect to
Reportable Events that have occurred by reason of a change in a
controlled group) or, to the knowledge of the Borrower, is
reasonably expected to occur with respect to any Pension Plan.
(e) Except for such as would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse
Effect, there are no pending or, to the knowledge of the
Borrower, threatened claims, actions or proceedings against or
with respect to any Plan by the Internal Revenue Service,
Department of Labor, Equal Employment Opportunity Commission or
any participant, beneficiary or other Person involving any aspect
of any Plan or its assets or any fiduciary with respect to any
Plan (other than routine benefit claims), nor are there any facts
or circumstances that could reasonably be expected to form the
basis for any such claim, action or proceeding.
(f) To the knowledge of the Borrower, neither the Borrower
nor any ERISA Affiliate reasonably expects to incur (i) any
liability (and no event has occurred that, with the giving of
notice under Section 4219 of ERISA, would result in such
liability) under Section 4201 or 4243 of ERISA with respect to a
Multiemployer Plan or (ii) any liability under Title IV of ERISA
that would be reasonably likely to have a Material Adverse Effect
(other than premiums due and not delinquent under Section 4007 of
ERISA) with respect to a Pension Plan.
(g) There is no outstanding penalty, interest or excise
tax under the Internal Revenue Code or ERISA with respect to any
Plan, which penalty, interest or excise tax would be reasonably
likely to have a Material Adverse Effect.
(h) With respect to each Pension Plan, (i) all required
contributions and payments have been made (including any employee
election contributions described in Section 401(k) of the
Internal Revenue Code) by their applicable due date and (ii) all
benefits due thereunder have been paid.
4.13. Solvency. The Borrower and its Subsidiaries, taken as
a whole, have capital sufficient to carry on their businesses as
conducted and as proposed to be conducted, and have assets with a
fair saleable value (i) not less than the amount required to pay
the probable liability on their existing debts as they become
absolute and matured and (ii) greater than the total amount of
their liabilities (including identified contingent liabilities);
and neither the Borrower nor any of its Significant Subsidiaries
intends to, or believes that it will, incur debts or liabilities
beyond its ability to pay such debts and liabilities as they
mature.
4.14. Environmental Matters. (a) (i) No Hazardous
Substances are or have been generated, used, released, treated,
disposed of or stored by the Borrower or its Subsidiaries or are,
to the knowledge of the Borrower, otherwise located, in, on or
under any portion of any real property, leased or owned, of the
Borrower or any of its Subsidiaries, except in material
compliance with all applicable Environmental Laws, and no portion
of any such real property or any other real property at any time
leased, owned or operated by the Borrower or any of its
Subsidiaries, including, without limitation, the soil and
groundwater located thereon and thereunder, has been contaminated
by any Hazardous Substance, and (ii) no portion of any real
property, leased or owned, of the Borrower or any of its
Subsidiaries has been or, to the knowledge of the Borrower, is
presently the subject of an environmental audit, assessment or
remedial action.
(b) To the knowledge of the Borrower, (i) no portion of
any real property, leased or owned, of the Borrower or any of its
Subsidiaries has been used as or for a mine, a landfill, a dump
or other disposal facility, a gasoline service station, or (other
than for petroleum substances stored in the ordinary course of
business) a petroleum products storage facility, (ii) no portion
of such real property or any other real property at any time
leased, owned or operated by the Borrower or any of its
Subsidiaries has, pursuant to any Environmental Law, been placed
on the "National Priorities List" or "CERCLIS List" (or any
similar federal, state or local list) of sites subject to
possible environmental problems, and (iii) there are not and have
never been any underground storage tanks situated on any real
property, leased or owned, of the Borrower or any of its
Subsidiaries.
(c) All activities and operations of the Borrower and its
Subsidiaries are in material compliance with the requirements of
all applicable Environmental Laws, and each of the Borrower and
its Subsidiaries has timely filed all reports required to be
filed, has acquired all necessary certificates, approvals and
permits, and has generated and maintained in all material
respects all required data, documentation and records required
under all Environmental Laws.
(d) Other than pursuant to claims made under policies
written by the Insurance Subsidiaries in the ordinary course of
business, neither the Borrower nor any of its Subsidiaries is
involved in any suit, action or proceeding, or has received any
notice, complaint or other request for information from any
Governmental Authority or other Person with respect to, any
actual or alleged
Environmental Claims; and, to the knowledge of the Borrower,
there are no threatened actions, suits, proceedings or
investigations with respect to Environmental Claims, nor any
basis therefor.
4.15. Compliance With Laws. Each of the Borrower and its
Subsidiaries has timely filed all reports, documents and other
materials required to be filed by it with any Governmental
Authority, has retained all records and documents required to be
retained by it and is otherwise in compliance with all applicable
Requirements of Law in respect of the conduct of its business and
the ownership and operation of its properties, except to the
extent the failure to do so, individually or in the aggregate,
would not be reasonably likely to have a Material Adverse Effect.
4.16. Regulated Industries. Neither the Borrower nor any of
its Subsidiaries is (i) an "investment company," a company
"controlled" by an "investment company," or an "investment
advisor," within the meaning of the Investment Company Act of
1940, as amended, or (ii) a "holding company," 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. Reinsurance Agreements. Schedule 4.17 lists, as of
the Amendment Effective Date, each Reinsurance Agreement to which
any of the Insurance Subsidiaries is a party, indicates the other
parties thereto and the term thereof, and lists separately each
Reinsurance Agreement no longer in force to which any of the
Insurance Subsidiaries was a party and under which, to the
knowledge of the Borrower, any material benefits or liabilities
remain outstanding. Each such Reinsurance Agreement is in full
force and effect; neither the Borrower nor any of its Insurance
Subsidiaries or, to the knowledge of the Borrower, any other
party thereto, is in default under any such contract; and the
Borrower has no reason to believe that the financial condition of
any other party to any such contract is impaired such that a
default thereunder by such party could reasonably be anticipated.
Each such Reinsurance Agreement is qualified under all applicable
Requirements of Law to receive the statutory credit assigned to
such Reinsurance Agreement in the relevant Annual Statement or
Quarterly Statement at the time prepared. Each Person to whom
the Borrower or any of its Subsidiaries has ceded any material
liability pursuant to any Reinsurance Agreement has a rating of
"A-" or better by A.M. Best & Company.
4.18. Carried Insurance. Schedule 4.18 sets forth a true
and complete summary of all material insurance policies or
arrangements carried by the Borrower and its Significant
Subsidiaries, and indicates the insurer's name, policy number,
expiration date, amount of coverage, type of coverage, annual
premiums, exclusions and deductibles, and also indicates any self-
insurance programs that are in effect. The assets, properties
and business of the Borrower and its Significant Subsidiaries are
adequately insured against such hazards and liabilities, under
such coverages and in such amounts, as are customarily maintained
by prudent companies similarly situated and under policies issued
by insurers of recognized responsibility.
4.19. Indebtedness. Schedule 4.19 sets forth, as of the
Amendment Effective Date, a complete and accurate list of all
Indebtedness of the Borrower or any of its Subsidiaries having an
aggregate principal amount in excess of $500,000 (other than the
Indebtedness incurred pursuant to this Agreement and the other
Loan Documents), designates the parties thereto, and indicates
the principal amount outstanding thereunder, the scheduled
maturity thereof and the existence of any Liens in respect
thereof.
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:
5.1. Financial Statements. The Borrower will deliver to
each Lender:
(a) As soon as practicable and in any event within sixty
(60) days after the end of each of the first three fiscal
quarters of each fiscal year, beginning with the fiscal quarter
ending March 31, 1997, an unaudited consolidated balance sheet of
the Borrower and its Subsidiaries and an unaudited balance sheet
of each Significant Subsidiary that is directly owned by the
Borrower and that is not an Insurance Subsidiary, in each case as
of the end of such fiscal quarter, and unaudited consolidated
statements of income, retained earnings and cash flows for the
Borrower and its Subsidiaries and unaudited statements of income,
retained earnings and cash flows for each Significant Subsidiary
that is directly owned by the Borrower and that is not an
Insurance Subsidiary, in each case for the fiscal quarter then
ended and for that portion of the fiscal year then ended, and in
each case for all of the foregoing statements setting forth
comparative figures for the corresponding period in the preceding
fiscal year, all prepared in accordance with Generally Accepted
Accounting Principles (subject to the absence of notes required
by Generally Accepted Accounting Principles and subject to normal
year-end audit adjustments); and
(b) As soon as practicable and in any event within 105 days
after the end of each fiscal year, beginning with the current
fiscal year, an audited consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such fiscal year
and audited consolidated statements of income, retained earnings
and cash flows for the Borrower and its Subsidiaries for the
fiscal year then ended, including the notes to each, in each case
setting forth comparative figures for the preceding fiscal year,
certified by the independent certified public accounting firm
regularly retained by the Borrower or another independent
certified public accounting firm reasonably acceptable to the
Required Lenders, together with (i) a report thereon by such
accountants that is not qualified as to going concern or scope of
audit and to the effect that such financial statements present
fairly the consolidated financial position and results of
operations of the Borrower and its Subsidiaries as of the dates
and for the periods indicated in accordance with Generally
Accepted Accounting Principles and (ii) a report by such
accountants to the effect that, based on and in connection with
their examination of the financial statements of the Borrower and
its Subsidiaries, they obtained no knowledge of the occurrence or
existence of any Event of Default relating to accounting or
financial reporting matters, or a statement specifying the nature
and period of existence of any such Event of Default disclosed by
their audit; provided, however, that such accountants shall not
be liable by reason of the failure to obtain knowledge of any
Event of Default that would not be disclosed or revealed in the
course of their audit examination.
5.2. Statutory Financial Statements. The Borrower will
deliver to each Lender:
(a) As soon as practicable and in any event within sixty
(60) days after the end of each of the first three fiscal
quarters of each fiscal year, beginning with the fiscal quarter
ending March 31, 1997, a Quarterly Statement of each Insurance
Subsidiary as of the end of such fiscal quarter and for
that portion of the fiscal year then ended, in the form filed
with the relevant Insurance Regulatory Authority, prepared in
accordance with Statutory Accounting Principles; and
(b) As soon as practicable and in any event within seventy-
five (75) days after the end of each fiscal year, beginning with
the current fiscal year, an Annual Statement of each Insurance
Subsidiary as of the end of such fiscal year and for the fiscal
year then ended, in the form filed with the relevant Insurance
Regulatory Authority, prepared in accordance with Statutory
Accounting Principles.
5.3. Other Business and Financial Information. The Borrower
will deliver to each Lender:
(a) Concurrently with each delivery of the financial
statements described in Sections 5.1 and 5.2, a Compliance
Certificate with respect to the period covered by the financial
statements then being delivered, executed by the Senior Financial
Officer of the Borrower (together, in the case of the financial
statements described in Section 5.1, with a Rate Calculation
Worksheet and a Covenant Compliance Worksheet reflecting the
computation of the financial covenant set forth in Section 6.5 as
of the last day of the period covered by such financial
statements, and in the case of the financial statements described
in Section 5.2, with a Covenant Compliance Worksheet reflecting
the computation of the financial covenants set forth in Sections
6.1 through 6.4 as of the last day of the period covered by such
financial statements);
(b) Promptly upon filing with the relevant Insurance
Regulatory Authority and in any event within ninety-five (95)
days after the end of each fiscal year, beginning with the
current fiscal year, a copy of each Insurance Subsidiary's
"Statement of Actuarial Opinion" (or equivalent information
should the relevant Insurance Regulatory Authority not require
such a statement) as to the adequacy of such Insurance
Subsidiary's loss reserves for such fiscal year, together with a
copy of its management discussion and analysis in connection
therewith, each in the format prescribed by the applicable
Insurance Code;
(c) As soon as practicable and in any event within thirty
(30) days after the beginning of each fiscal year, beginning with
the fiscal year ending December 31, 1996, new business plans and
a consolidated operating budget for the Borrower for such fiscal
year and projected financial statements for the Borrower for the
remaining stated term of the Facility, consisting of a
consolidated balance sheet, statement of income and cash flow,
together with a certificate of the chief executive officer or
Senior Financial Officer of the Borrower to the effect that such
budgets and financial projections have been prepared in good
faith and are reasonable estimates of the financial position and
results of operations of the Borrower for the period covered
thereby;
(d) Promptly upon (and in any event within twenty (20)
Business Days after) receipt thereof, a copy of each final report
to each Insurance Subsidiary from the NAIC as to such Insurance
Subsidiary's status under the relevant IRIS Tests;
(e) Promptly upon (and in any event within twenty (20)
Business Days after) receipt or completion thereof, copies of any
"management letter," or other significant report or significant
communication, submitted to the Borrower or any of its
Subsidiaries by its certified public accountants, and any
response reports from the Borrower or any such Subsidiary in
respect thereof, in connection with each annual, interim or
special audit;
(f) Promptly upon (and in any event within twenty (20)
Business Days after) the sending, filing or receipt thereof,
copies of (i) all financial statements, reports, notices and
proxy statements that the Borrower or any of its Subsidiaries
shall send or make available generally to its shareholders,
(ii) all regular, periodic and special reports, registration
statements and prospectuses that the Borrower or any of its
Subsidiaries shall render to or file with the Securities and
Exchange Commission, the National Association of Securities
Dealers or any national securities exchange, (iii) all
significant reports on examination or similar significant
reports, financial examination reports or market conduct
examination reports by the NAIC or any Insurance Regulatory
Authority or other Governmental Authority with respect to any
Insurance Subsidiary's insurance business, (iv) all significant
filings made under applicable state insurance holding company
acts by the Borrower or any of its Subsidiaries, including,
without limitation, filings seeking approval of transactions with
Affiliates, and (v) all press releases and other statements that
the Borrower or any of its Subsidiaries shall make available
generally to the public concerning developments in the business
of the Borrower or any of its Subsidiaries, other than press
releases or statements issued in the ordinary course of business;
and
(g) As promptly as reasonably possible, such other
information about the business, condition (financial or
otherwise), operations or properties of the Borrower or any of
its Subsidiaries as any Lender may from time to time reasonably
request.
5.4. Notice of Certain Events. The Borrower will promptly,
but in no event later than five (5) Business Days after obtaining
knowledge thereof, give written notice to each Lender of:
(a) The occurrence of any Default or Event of Default,
together with a written statement of the chief executive officer
or Senior Financial Officer of the Borrower specifying the nature
of such Default or Event of Default, the period of existence
thereof and the action that each of the Borrower and its
Subsidiaries has taken and proposes to take with respect thereto;
(b) The institution or threatened institution of any
action, suit, investigation or proceeding against or affecting
the Borrower or any of its Subsidiaries, including any such
investigation or proceeding by any Insurance Regulatory Authority
or other Governmental Authority (other than routine periodic
inquiries, investigations or reviews), together with copies of
any filings, communications, reports or other information
relating thereto made available to the Borrower or any of its
Subsidiaries, except such as would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse
Effect;
(c) The receipt by the Borrower or any of its Subsidiaries
from any Governmental Authority of a notice of violation or
noncompliance by the Borrower or any of its Subsidiaries that, if
established, would be reasonably likely to have a Material
Adverse Effect, or a notice of any actual or threatened
suspension, termination, limitation or revocation of any license,
permit or authorization (including, without limitation, any
License) of the Borrower or any of its Subsidiaries where such
action would be reasonably likely to have a Material Adverse
Effect, together with a copy of such notice and any other
information relating thereto made available to the Borrower or
any of its Subsidiaries;
(d) The occurrence of any changes in any Insurance Code
governing the investment or dividend practices of any of the
Insurance Subsidiaries that would be reasonably likely to have a
Material Adverse Effect;
(e) Any change in the rating of any Insurance Subsidiary by
A.M. Best & Co., Inc.;
(f) The occurrence of any amendment or modification to any
Reinsurance Agreement (whether entered into before or after the
Amendment Effective Date), including any Reinsurance Agreements
that are in a runoff mode on the Amendment Effective Date, which
amendment or modification would be reasonably likely to have a
Material Adverse Effect; or the receipt by the Borrower or any of
its Subsidiaries of any written notice of denial of coverage,
litigation, claim or arbitration arising out of any Reinsurance
Agreement to which it is a party or any cancellation or change in
any material insurance policy carried by it, which would be
reasonably likely to have a Material Adverse Effect;
(g) The occurrence of any ERISA Event with respect to the
Borrower or any of its ERISA Affiliates, together with (i) a
written statement of the chief executive officer or Senior
Financial Officer of the Borrower specifying the details of such
ERISA Event and the action that the Borrower or such ERISA
Affiliate has taken or proposes to take with respect thereto,
(ii) a copy of any notice with respect to such ERISA Event that
may be required to be filed with the PBGC and (iii) any notice
delivered by the PBGC to the Borrower or such ERISA Affiliate
with respect to such ERISA Event;
(h) The occurrence of any of the following, together with a
reasonably detailed description thereof and copies of any
filings, communications, reports or other information relating
thereto made available to the Borrower or any of its
Subsidiaries: (i) the taking of any remedial action by the
Borrower, any of its Subsidiaries or any other Person in response
to the actual or alleged generation, storage, release, disposal
or discharge of any Hazardous Substances on, to, upon or from any
of the real property, leased or owned, of the Borrower or any of
its Subsidiaries; (ii) any pending or threatened Environmental
Claim against or affecting the Borrower, any of its Subsidiaries
or any of their respective real property, leased or owned (other
than pursuant to claims made under policies written by the
Insurance Subsidiaries in the ordinary course of business); or
(iii) any other condition or occurrence on or arising from or
with respect to any real property, leased or owned, of the
Borrower or any of its Subsidiaries, that (x) results in
noncompliance by the Borrower or any of its Subsidiaries with any
applicable Environmental Law, (y) could reasonably be anticipated
to form the basis of an Environmental Claim against the Borrower,
any of its Subsidiaries or any of their respective real property,
leased or owned, or (z) could reasonably be anticipated to cause
any of such real property, or any interest therein (including
leaseholds), to be subject to any restrictions on ownership,
occupancy, use or transfer under any Environmental Law; but in
each case under clauses (i), (ii) and (iii) above, only to the
extent the same would be reasonably likely to have a Material
Adverse Effect; and
(i) Any other matter or event that has, or would be
reasonably likely to have, a Material Adverse Effect, together
with a written statement of the chief executive officer or Senior
Financial Officer of the Borrower setting forth the nature and
period of existence thereof and the action that each of the
Borrower and its Subsidiaries has taken and proposes to take with
respect thereto.
5.5. Corporate Existence; Franchises; Maintenance of
Properties. The Borrower will, and will cause each of its
Significant Subsidiaries to, (i) except as permitted by
Section 7.1, maintain and preserve in full force and effect its
corporate existence, (ii) obtain, maintain and preserve in full
force and effect all other rights, franchises, licenses, permits,
certifications, approvals and authorizations (including, without
limitation, Licenses) required by Governmental Authorities and
necessary to the
ownership, occupation or use of its properties or the conduct of
its business, except to the extent failure to do so would not be
reasonably likely to have a Material Adverse Effect, and
(iii) keep all properties materially useful to its business in
good working order and condition (normal wear and tear excepted)
and from time to time make all necessary repairs to and renewals
and replacements of such properties, except to the extent that
any of such properties are obsolete or are being replaced.
5.6. Compliance with Laws. The Borrower will, and will
cause each of its Subsidiaries to, comply in all respects with
all Requirements of Law applicable in respect of the conduct of
its business and the ownership and operation of its properties,
including, without limitation, applicable Insurance Codes, except
to the extent the failure so to comply would not be reasonably
likely to have a Material Adverse Effect.
5.7. Payment of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, (i) pay all Indebtedness as
and when due (subject to any applicable subordination provisions)
and otherwise comply with and perform all contracts, agreements
and instruments creating or evidencing Indebtedness to which it
is a party, except to the extent failure to do so would not be
reasonably likely to have a Material Adverse Effect, and (ii) pay
and discharge all taxes, assessments and governmental charges or
levies imposed upon it, upon its income or profits or upon any of
its properties, prior to the date on which penalties would attach
thereto, and all lawful claims that, if unpaid, might become a
Lien upon any of the properties of the Borrower or any of its
Subsidiaries; provided, however, that neither the Borrower nor
any of its Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim that is being contested in good
faith and by proper proceedings and as to which the Borrower or
such Subsidiary is maintaining adequate reserves with respect
thereto in accordance with Generally Accepted Accounting
Principles.
5.8. Insurance. The Borrower will, and will cause each of
its Significant Subsidiaries to, maintain with responsible
insurance companies insurance with respect to its assets,
properties and business, against such hazards and liabilities, of
such types and in such amounts, as is customarily maintained by
prudent companies similarly situated.
5.9. Maintenance of Books and Records; Inspection. The
Borrower will, and will cause each of its Subsidiaries to,
(i) maintain adequate books, accounts and records, in which full,
true and correct entries shall be made of all financial
transactions in relation to its business and properties, and
prepare all financial statements required under this Agreement,
in each case in accordance with Generally Accepted Accounting
Principles or Statutory Accounting Principles, as applicable, and
in compliance with the requirements of any Governmental Authority
having jurisdiction over it, and (ii) permit employees or agents
of the Agent or any Lender to inspect its properties and examine
or audit its books, records, working papers and accounts and make
copies and memoranda of them, and to discuss its affairs,
finances and accounts with its officers and employees and, upon
notice to the Borrower, the independent public accountants of the
Borrower and its Subsidiaries (and by this provision the Borrower
authorizes such accountants to discuss the finances and affairs
of the Borrower and its Subsidiaries), all at such times and from
time to time during business hours as may be reasonably
requested.
5.10. Dividends. The Borrower (i) will take all action
necessary to cause its Subsidiaries to make such dividends,
distributions or other payments to the Borrower as shall be
necessary for the Borrower to make payments of the principal of
and interest on the Loans in accordance with this Agreement,
including scheduled repayments required under Section 2.5(b), and
(ii) in furtherance of
the foregoing, and without limitation thereof, will take all
action necessary to cause any dividends or other distributions
paid to Viking Holdings by its Subsidiaries to be paid over
immediately (and in any event by the next Business Day after
receipt thereof) to the Borrower. In the event the approval of
any Governmental Authority or other Person is required in order
for any such Subsidiary to make any such dividends, distributions
or other payments to the Borrower, or for the Borrower to make
any such principal or interest payments, the Borrower will
forthwith exercise its best efforts and take all actions
permitted by law and necessary to obtain such approval.
5.11. Ownership of Insurance Subsidiaries. The Borrower
will cause each of its Insurance Subsidiaries that is a
Significant Subsidiary to remain at all times a direct or
indirect Wholly Owned Subsidiary of the Borrower.
5.12. Further Assurances. The Borrower will, and will cause
each of its Subsidiaries to, make, execute, endorse, acknowledge
and deliver any amendments, restatements, modifications or
supplements hereto and any other agreements, instruments or
documents, and take any and all such other actions, as may from
time to time be reasonably requested by the Agent or the Required
Lenders to effect, confirm or further assure or protect and
preserve the interests, rights and remedies of the Lenders and
the Agent under this Agreement and the other Loan Documents.
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:
6.1. Consolidated Statutory Surplus. The Borrower will
cause Consolidated Statutory Surplus to be no less than
$200,000,000 at all times from and after the Amendment Effective
Date.
6.2. Operating Leverage Ratio. The Borrower will cause each
Insurance Subsidiary that is a Significant Subsidiary to maintain
a ratio of Net Written Premiums to Statutory Surplus of not
greater than 3.0 to 1.0 (or any lower ratio required under any
applicable Requirement of Law) at all times from and after the
Amendment Effective Date.
6.3. Fixed Charge Coverage Ratio. The Borrower will not
permit the Fixed Charge Coverage Ratio to be less than 1.5 to 1.0
as of the last day of any fiscal quarter, beginning with the
fiscal quarter ending December 31, 1996.
6.4. Risk-Based Capital. The Borrower will not permit
"total adjusted capital" (within the meaning of the Risk-Based
Capital for Insurers Model Act as promulgated by the NAIC as of
the Original Credit Agreement Date (the "Model Act")) of GNIC or
VICW as of the last day of any fiscal year, beginning with the
current fiscal year, to be less than 150% of the applicable
"Company Action Level RBC" (within the meaning of the Model Act)
for GNIC or VICW, as applicable, as of such date.
6.5. Consolidated Net Worth. The Borrower will not permit
Consolidated Net Worth as of the last day of any fiscal quarter,
beginning with the fiscal quarter ending December 31, 1996, to be
less than the sum of (i) $190,000,000, plus (ii) 30% of the
aggregate of Consolidated Net Income for each fiscal quarter
ending after December 31, 1996 (provided that Consolidated Net
Income for any such fiscal quarter shall be taken into account
for purposes of this calculation only if positive), plus
(iii) 100% of the aggregate amount of all increases in the stated
capital and additional paid-in capital accounts of the Borrower
(as determined in accordance with Generally Accepted Accounting
Principles) resulting from the issuance of equity securities or
other capital investments after December 31, 1996 (including
pursuant to the conversion or exchange of Indebtedness, but
excluding options, rights, warrants and other equity securities
issued pursuant to employee benefit plans and any equity
securities issued upon the exercise, conversion or exchange
thereof).
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, Consolidation. The Borrower will not, and will
not permit or cause any of its Significant Subsidiaries to,
liquidate, wind up or dissolve, or enter into any consolidation,
merger or other combination, or agree to do any of the foregoing;
provided, however, that any Significant Subsidiary may merge or
consolidate with another Subsidiary or with the Borrower so long
as (y) the surviving corporation is the Borrower or a Wholly
Owned Subsidiary and (z) immediately after giving effect thereto,
no Default or Event of Default would exist.
7.2. Indebtedness. The Borrower will not, and will not
permit or cause any of its Subsidiaries to, create, incur, assume
or suffer to exist any Indebtedness other than:
(i) Indebtedness incurred under this Agreement;
(ii) Indebtedness existing on the Amendment Effective
Date and described on Schedule 4.19;
(iii) Indebtedness under reimbursement obligations in
respect of letters of credit issued for the benefit of the
Insurance Subsidiaries in the ordinary course of their
business to support the payment of claims arising under
insurance contracts;
(iv) Indebtedness in favor of Talegen created under the
Acquisition Agreement; and consisting of contingent purchase
price obligations;
(v) Indebtedness incurred pursuant to Investment
Borrowings, in an aggregate principal amount at any time
outstanding not exceeding 25% of Consolidated Net Worth at
such time (except to the extent such Indebtedness described
in this clause (v) would then be permitted under
clause (vii) below);
(vi) Indebtedness of the Borrower under any Hedge
Agreements entered into with any Lender in respect of the
Indebtedness incurred pursuant to this Agreement, provided
that the notional amount of all such agreements shall not
exceed the Total Commitment at any time; and
(vii) other Indebtedness (including purchase money
Indebtedness secured by Liens of the type described in
clause (vii) of the definition of Permitted Liens) in an
aggregate principal amount at any time outstanding not to
exceed $10,000,000 for the Borrower and its Subsidiaries.
7.3. Liens. The Borrower will not, and will not permit or
cause any of its Subsidiaries to, directly or indirectly, make,
create, incur, assume or suffer to exist, or enter into or suffer
to exist any agreement or restriction that prohibits or
conditions the creation, incurrence or assumption of, any Lien
upon or with respect to any part of its property or assets,
whether now owned or hereafter acquired, or agree to do any of
the foregoing, other than Permitted Liens.
7.4. Disposition of Assets. The Borrower will not, and will
not permit or cause any of its Subsidiaries to, directly or
indirectly, sell, assign, lease, convey, transfer or otherwise
dispose of (whether in one or a series of transactions) any
Material Assets, or enter into any arrangement with any Person
providing for the lease by the Borrower or any Subsidiary as
lessee of any Material Assets that have been sold or transferred
by the Borrower or such Subsidiary to such Person, or agree to do
any of the foregoing; provided, however, that any Subsidiary may,
to the extent permitted by applicable Requirements of Law and
each relevant Insurance Regulatory Authority, sell, assign or
otherwise dispose of any of its Material Assets to the Borrower
or another Wholly Owned Subsidiary so long as (y) such sale,
assignment or disposition will not adversely affect the ability
of any Insurance Subsidiary party thereto to pay dividends or
otherwise make distributions to its parent corporation and
(z) immediately after giving effect thereto, no Default or Event
of Default would exist.
7.5. Investments. The Borrower will not, and will not
permit or cause any of its Subsidiaries to, (a) directly or
indirectly, purchase, own, invest in or otherwise acquire any
capital stock, evidence of indebtedness or other obligation or
security or any interest whatsoever in any other Person, or make
or permit to exist any loans, advances or extensions of credit
to, or any investment in cash or by delivery of property in, any
other Person, or become a partner or joint venturer in any
partnership or joint venture, or (b) in any single transaction or
series of related transactions (y) acquire any going business or
all or substantially all of the assets of any Person, whether
through purchase of assets, merger or otherwise, or (z) acquire
securities of any Person having at least a majority of combined
voting power of the then outstanding securities of such Person
ordinarily (and apart from rights accruing under special
circumstances) having the right to vote in the election of
directors (any of the transactions described in clause (b) above,
a "Third Party Acquisition," and the transactions described in
clauses (a) and (b) above, collectively, "Investments"), or make
a commitment or otherwise agree to do any of the foregoing, other
than:
(i) Cash Equivalents;
(ii) Investments consisting of loans and advances to
employees for reasonable travel, relocation and business
expenses in the ordinary course of business or prepaid
expenses incurred in the ordinary course of business;
(iii) Investments consisting of Indebtedness permitted
under Section 7.2;
(iv) existing Investments in corporations that are
Subsidiaries as of the date hereof;
(v) Investments comprised of direct ownership or
leasehold interests in real property that are reflected on
the December 31, 1995 Historical Financial Statements or
made in connection with real property occupied by the
Borrower and its Subsidiaries and required to be classified
as real property on the consolidated balance sheet of the
Borrower and its Subsidiaries; and
(vi) Other Investments by the Borrower or its Insurance
Subsidiaries to the extent permitted under applicable
Requirements of Law, provided that (A) any such Investments
in connection with a Third Party Acquisition may be made
only so long as, immediately after giving effect thereto, no
Default or Event of Default would exist, (B) the aggregate
of such Investments in preferred stock or non-equity
securities (in each case, excluding Investment Grade
Securities) shall not at any time exceed 11% of Consolidated
Investment Assets at such time, (C) the aggregate of such
Investments (excluding Investments in Subsidiaries) in
equity securities (including, without limitation, interests
in limited partnerships and real estate investment trusts,
but excluding preferred stock constituting Investment Grade
Securities) shall not at any time exceed the lesser of
(1) 17.5% of Consolidated Investment Assets at such time and
(2) 60% of Consolidated Net Worth at such time and (D) no
Investments comprised of direct ownership or leasehold
interests in real property may be made except as expressly
permitted under clause (v) above.
7.6. Restricted Payments. The Borrower will not, and will
not permit or cause any of its Significant Subsidiaries to,
directly or indirectly, declare or make any dividend payment, or
make any other distribution of cash, property or assets, in
respect of any of its capital stock or any warrants, rights or
options to acquire its capital stock, or purchase, redeem, retire
or otherwise acquire for value any shares of its capital stock or
any warrants, rights or options to acquire its capital stock, or
set aside funds for any of the foregoing, or enter into any
agreement (other than this Agreement) that restricts its ability
to declare or make any dividend payment or make any other
distribution of cash, property or assets in respect of its
capital stock or other ownership interests, except that:
(i) the Borrower may declare and make dividend
payments or other distributions payable solely in its
capital stock;
(ii) the Borrower may, pursuant to its shareholder
rights plan, declare and make dividend payments or other
distributions consisting of rights to purchase shares of its
capital stock;
(iii) each Significant Subsidiary may declare and make
dividend payments or other distributions to the Borrower or
another Subsidiary to the extent permitted under applicable
Requirements of Law and, as to the Insurance Subsidiaries,
by each relevant Insurance Regulatory Authority; and
(iv) the Borrower may declare and pay cash dividends in
respect of its capital stock and purchase, redeem, retire or
otherwise acquire shares of its capital stock, in each
case so long as immediately after giving effect thereto, no
Default or Event of Default would exist.
7.7. Transactions with Affiliates. The Borrower will not,
and will not permit or cause any of its Subsidiaries to, enter
into any transaction with any officer, director, stockholder or
other Affiliate of the Borrower or any Subsidiary, except in the
ordinary course of and pursuant to the reasonable requirements of
its business and upon fair and reasonable terms that are no less
favorable to it than would obtain in a comparable arm's length
transaction with a Person other than an Affiliate of the Borrower
or such Subsidiary; provided, however, that nothing contained in
this Section shall prohibit:
(i) performance by the Borrower and its Subsidiaries
of the agreements described on Schedule 7.7;
(ii) transactions otherwise expressly permitted
hereunder; and
(iii) the payment by the Borrower of reasonable and
customary fees to members of its board of directors.
7.8. Certain Amendments. The Borrower will not, and will
not permit or cause any of its Subsidiaries to, amend, modify or
change its articles or certificate of incorporation or bylaws, or
any tax sharing or tax allocation agreement or management
agreement to which it is or becomes a party, in each case other
than any amendments, modifications or changes that could not,
individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.
7.9. Lines of Business. The Borrower will not, and will not
permit or cause any of its Significant Subsidiaries to, engage in
any business other than the property and casualty insurance
business or a business reasonably incidental or related thereto;
and the Borrower will not permit or cause Viking Holdings to
create, incur or assume any liabilities or obligations of any
nature or engage in or transact any business whatsoever, except
that Viking Holdings may own and hold the capital stock of VICW
and may distribute such capital stock to the Borrower or to a
Wholly Owned Subsidiary of the Borrower pursuant to a liquidating
distribution or a merger with and into the Borrower or a Wholly
Owned Subsidiary of the Borrower.
7.10. Limitation on Certain Restrictions. The Borrower will
not, and will not permit or cause any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to
exist or become effective any restriction or encumbrance on
(i) the ability of the Borrower and its Subsidiaries to perform
and comply with their respective obligations under the Loan
Documents or (ii) the ability of any Subsidiary of the Borrower
to make any dividend payments or other distributions in respect
of its capital stock, or to make loans or advances to the
Borrower, in each case other than such restrictions or
encumbrances existing under or by reason of applicable
Requirements of Law.
7.11. Compliance of Plans. The Borrower will not, and will
not permit or cause any ERISA Affiliate to, directly or
indirectly, (i) take or fail to take any action that could
reasonably be expected to result in a liability of the Borrower
or any ERISA Affiliate to the PBGC or to a Multiemployer Plan,
(ii) terminate any Pension Plan subject to Title IV of ERISA so
as to result in a liability of the Borrower or any ERISA
Affiliate, (iii) permit to exist any ERISA Event, or any other
event or condition, that presents the risk of a liability of the
Borrower or any ERISA Affiliate, or
(iv) operate any Plan in a manner such that the Borrower or any
ERISA Affiliate will incur a tax liability under Section 4980B of
the Internal Revenue Code or a material liability to any
"qualified beneficiary" within the meaning of Section 4980B of
the Internal Revenue Code, in each case under clauses (i) through
(iv) above to the extent the same would be reasonably likely to
have a Material Adverse Effect.
7.12. Fiscal Year. The Borrower will not, and will not
permit or cause any of its Subsidiaries to, change the ending
date of its fiscal year to a date other than December 31 unless
(i) the Borrower shall have given the Lenders written notice of
its intention to change such fiscal year at least sixty (60) days
prior to the effective date thereof and (ii) prior to such
effective date this Agreement shall have been amended to make any
changes in the financial covenants and other terms and conditions
to the extent necessary, in the reasonable determination of the
Required Lenders, to reflect the new fiscal year ending date.
7.13. Accounting Changes. The Borrower will not, and will
not permit or cause any of its Subsidiaries to, make or permit
any material change in its accounting policies or reporting
practices, except as may be required to conform the policies and
practices employed with respect to Viking Holdings and VICW to
the Borrower's policies and practices and except as may be
required by Generally Accepted Accounting Principles or Statutory
Accounting Principles, as applicable.
7.14. Reinsurance Agreements. The Borrower will not, and
will not permit or cause any of its Insurance Subsidiaries
to, (i) be or become a party to any material Reinsurance
Agreement (whether in effect as of the date hereof or at any time
hereafter) with any reinsurer not rated "A-" or better by A.M.
Best & Company, or (ii) enter into any Reinsurance Agreements, or
make any change or modification to any Reinsurance Agreements,
that would, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect.
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 pay any principal of the
Loans when due;
(b) The Borrower shall fail to pay any interest on the
Loans, any fees or any other Obligations when due, and such
failure shall continue unremedied for one (1) Business Day;
(c) The Borrower shall fail to observe, perform or comply
with any term, condition or covenant contained in Sections 2.12,
5.4(a), 5.7(i), 5.10(ii), 5.11, 6.1 through 6.5, inclusive, 7.1
through 7.7, inclusive, or 7.11;
(d) The Borrower shall fail to observe, perform or comply
with any term, condition or covenant contained in this Agreement
other than those enumerated in subsections (a), (b) and (c)
above, and such failure shall continue unremedied for a period of
(i) three (3) Business Days after the Borrower acquires knowledge
thereof, in the case of any of the covenants set forth in Sections 5.1,
5.2 and 5.3, (ii) five (5) Business Days after the Borrower
acquires knowledge thereof, in the case of any of the covenants
set forth in Sections 7.8, 7.9, 7.10, 7.12, 7.13 and 7.14, and
(iii) thirty (30) days after the Borrower acquires knowledge
thereof, in all other instances;
(e) The Borrower or any of its Subsidiaries shall fail to
observe, perform or comply with any term, condition or covenant
contained in any of the Loan Documents other than this Agreement,
and such failure shall continue unremedied for any grace period
specifically applicable thereto or, if no such grace period is
applicable, for a period of thirty (30) days after the Borrower
acquires knowledge thereof;
(f) Any representation or warranty made in writing by or on
behalf of any the Borrower or any of its Subsidiaries in this
Agreement, any of the other Loan Documents or in any certificate,
instrument or document delivered in connection herewith or
therewith, or in connection with the transactions contemplated
hereby or thereby, shall prove to have been false or incorrect in
any material respect at the time as of which such representation
or warranty was made;
(g) The Borrower or any of its Subsidiaries shall fail to
pay when due, whether by scheduled maturity, acceleration or
otherwise (taking into account any applicable grace period), any
principal of, interest on or other amount payable in respect of
any Indebtedness (other than the Indebtedness incurred pursuant
to this Agreement) having an aggregate principal amount of at
least $1,000,000; any other default or event of default shall
occur under the terms of any agreement or instrument pursuant to
which the Borrower or any of its Subsidiaries has incurred any
such Indebtedness, the effect of which default or event of
default is to accelerate, or permit acceleration of (after any
applicable grace period, notice or lapse of time), the maturity
of at least $1,000,000 in principal amount of such Indebtedness;
or any such Indebtedness of the Borrower or any of its
Subsidiaries shall be declared to be due and payable or required
to be prepaid or redeemed (other than pursuant to a regular
schedule therefor), purchased or defeased, or an offer to prepay,
redeem, purchase or defease shall be required to be made, in each
case prior to the stated maturity thereof;
(h) The Borrower or any of its Significant Subsidiaries
shall (i) file a voluntary petition or commence a voluntary case
seeking liquidation, reorganization, dissolution, arrangement,
readjustment of debts or any other relief under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect, (ii) consent to the
appointment of or taking possession by a custodian, trustee,
receiver or similar official for or of all or a substantial part
of its properties, (iii) fail generally to pay its debts as they
become due or admit in writing its inability to pay its debts
generally as they become due, (iv) make a general assignment for
the benefit of creditors or (v) take any corporate action to
authorize or approve any of the actions described above;
(i) Any involuntary petition or case shall be filed or
commenced against the Borrower or any of its Significant
Subsidiaries seeking liquidation, reorganization, dissolution,
arrangement, readjustment of debts, the appointment of a
custodian, trustee, receiver or similar official for it or all or
a substantial part of its properties or any other relief under
the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect, which
petition or case is not dismissed, bonded or discharged within
sixty (60) days of the date of filing; or an order for relief
(including, without limitation, the appointment of a custodian,
trustee, receiver or similar official) shall be entered in any
such proceeding, which order is not immediately stayed or made
subject to other similar relief;
(j) Any Insurance Regulatory Authority or other
Governmental Authority having jurisdiction shall issue any order
of conservation, supervision, rehabilitation or liquidation or
any other order of similar effect in respect of any Insurance
Subsidiary that is a Significant Subsidiary;
(k) The Borrower or any of its Significant Subsidiaries
shall cease in any respect to conduct business as now conducted
or be enjoined, restrained or in any way prevented by order of
court or any other Governmental Authority from conducting all or
any part of its business affairs, and the same would be
reasonably likely to have a Material Adverse Effect;
(l) Any one or more judgments, writs or warrants of
attachment, executions or similar processes involving an
aggregate amount (not reimbursed or reimbursable by an insurer
that has acknowledged its liability in writing) in excess of
$1,000,000 shall be entered or filed against the Borrower or any
of its Subsidiaries or any of their respective properties, and
all such judgments and processes shall not be dismissed, vacated,
stayed, discharged or bonded for a period of thirty (30) days or
in any event later than five (5) days prior to the date of any
proposed sale thereunder, and, if bonded, such bond (or a
replacement bond) shall not continue in effect at all times until
such judgment is dismissed or discharged;
(m) Any Lien, levy or assessment, or notice thereof, shall
be filed of record with respect to all or any portion of the
assets of the Borrower or any of its Subsidiaries by the United
States, or any department, agency or instrumentality thereof, or
by any other Governmental Authority, including, without
limitation, the PBGC; such Lien, levy or assessment, taken
together with all other Liens, levies or assessments then of
record (other than Permitted Liens) with respect to the assets of
the Borrower and its Subsidiaries, taken as a whole, exceeds
$1,000,000; and such Lien, levy or assessment shall be executed
upon or shall not be paid, dismissed, vacated, stayed, released,
bonded or discharged within thirty (30) days after the same
becomes a Lien or, in the case of a Lien involving ad valorem
taxes, prior to the last day when payment may be made without
penalty;
(n) Any of the following shall occur with respect to any
Pension Plan maintained by the Borrower or any of its ERISA
Affiliates with Unfunded Pension Liabilities in excess of
$1,000,000 (as calculated on a termination basis in accordance
with the regulations issued by the PBGC): (i) a Reportable Event
(which is not waived by the PBGC) with respect to any such
Pension Plan that presents the risk of a material liability of
the Borrower or any ERISA Affiliate; (ii) the termination of any
such Pension Plan in a "distress termination" under the
provisions of section 4041 of ERISA; (iii) the appointment of a
trustee by an appropriate United States District Court to
administer any such Pension Plan; (iv) the institution of any
proceedings by the PBGC to terminate any such Pension Plan or to
appoint a trustee to administer any such Pension Plan; or (v) the
failure of the Borrower or such ERISA Affiliate to notify the
Agent promptly upon its receipt of any notice of the institution
of any proceeding or any other actions that may result in the
termination of any such Pension Plan;
(o) Any one or more licenses, permits or authorizations now
or hereafter held by the Borrower or any of its Subsidiaries
shall be terminated, suspended or revoked or shall not be
renewed, which terminations, suspensions, revocations or failures
to renew would, individually or in the aggregate, have a Material
Adverse Effect;
(p) The occurrence of any one or more changes in any
applicable Insurance Codes governing the dividend practices of
any of the Insurance Subsidiaries, which changes would,
individually or in the aggregate, have a Material Adverse Effect;
(q) The occurrence of any one or more changes in the status
of any of the Reinsurance Agreements of any of the Insurance
Subsidiaries, which changes would, individually or in the
aggregate, have a Material Adverse Effect; or
(r) The occurrence of a Change of Control.
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 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 Commitment of each Lender to be terminated,
whereupon the same shall terminate (provided that, upon the
occurrence of an Event of Default pursuant to Sections 8.1(h),
(i) or (j), all of the Commitments shall automatically be
terminated);
(b) Declare all or any part of the outstanding principal
amount of the Loans, all unpaid interest accrued thereon, and all
other amounts payable under this Agreement, the Notes and the
other Loan Documents to be immediately due and payable, whereupon
such outstanding principal amounts, accrued interest and other
such amounts 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 an Event of Default pursuant to
Sections 8.1(h), (i) or (j), all of such outstanding principal
amounts, accrued interest and other such amounts shall
automatically become immediately due and payable);
(c) Take any and all action necessary to obtain, at the
Borrower's expense and as soon as reasonably possible, a current
Actuarial Report with respect to each Insurance Subsidiary (the
Borrower hereby agreeing to cooperate in connection therewith);
and
(d) Exercise all rights and remedies available to it under
this Agreement, the other Loan Documents and applicable law.
8.3. Remedies: Set-Off. In addition to all other rights and
remedies available under the Loan 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 and each of
its Affiliates may, and each is hereby authorized by the
Borrower, 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, to set off and to
apply any and all deposits (general or special, time or demand,
provisional or final) and any other property at any time held,
and any other indebtedness at any time owing, by such Lender or
any of its Affiliates to or for the credit or the account of the
Borrower against any or all of the Obligations to such Lender now
or hereafter existing, whether or not such Obligations may be
contingent or unmatured, the Borrower hereby granting to each
Lender a continuing security interest in and Lien upon all such
deposits and other property as security for such Obligations.
Each Lender agrees promptly to notify the Borrower and the 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. Notwithstanding anything herein or
in any other Loan Document to the contrary, all rights of set-off
and application hereunder are specifically limited to the
deposits and assets of the Borrower, and under no circumstances
whatsoever
shall any Lender or any Affiliate of any Lender be entitled to
set off or apply against the Obligations of the Borrower, or have
any Lien upon, any deposits or other property of any Subsidiary
(including, without limitation, any Insurance Subsidiary) held by
such Lender or Affiliate for the credit or account of such
Subsidiary or any other indebtedness owing by such Lender or
Affiliate to any Subsidiary.
ARTICLE IX
THE AGENT
9.1. Appointment. The Lenders hereby designate and appoint
First Union as Agent to act as specified herein and in the other
Loan Documents. Each Lender hereby irrevocably authorizes, and
each holder of any Note by the acceptance of such Note shall be
deemed irrevocably to authorize, the Agent to enter into and take
such action as agent on its behalf under the provisions of this
Agreement, the other Loan Documents and any other instruments and
agreements referred to herein or therein, and to exercise such
powers and to perform such duties hereunder and thereunder, as
are specifically delegated to or required of the Agent by the
terms hereof or thereof and such other powers as are reasonably
incidental thereto. Each Lender agrees that the rights and
remedies granted under this Agreement and the other Loan
Documents shall be exercised solely by the Agent, at the
direction or with the consent of the Required Lenders, and that
no Lender shall have any right individually to exercise any such
right or remedy except to the extent, if any, expressly provided
herein or therein. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents or
attorneys-in-fact and shall not be responsible for the negligence
or misconduct of any agents or attorneys-in-fact that it selects
with reasonable care.
9.2. Nature of Duties. The Agent shall not have any duties
or responsibilities other than those expressly set forth in this
Agreement and the other Loan Documents. Neither the Agent nor
any of its officers, directors, employees or agents shall be
liable for any action taken or omitted by it or them as such
hereunder or under any other Loan Document or in connection
herewith or therewith, unless caused by its or their gross
negligence or willful misconduct. The duties of the Agent shall
be mechanical and administrative in nature; the Agent shall not
have by reason of this Agreement or any other Loan Document a
fiduciary relationship in respect of any Lender or the holder of
any Note; and nothing in this Agreement or any other Loan
Document, express or implied, is intended to or shall be so
construed as to impose upon the Agent any obligations or
liabilities in respect of this Agreement or any other Loan
Document except as expressly set forth herein or therein.
9.3. Absence of Reliance on the Agent. (a) Each Lender
acknowledges that neither the Agent nor any of its officers,
directors, employees or agents has made any representation or
warranty to it and that no act by the Agent 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 Agent to any Lender.
(b) Each Lender acknowledges that, independently and
without reliance upon the Agent or any other Lender and based on
such documents and information as it has deemed and may deem
appropriate, it has made and will continue to make its own
appraisal of and investigation into the business, prospects,
operations, properties, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries in
connection with its decision to enter into this Agreement and extend
credit to the Borrower hereunder, and will continue to make its
own credit analysis, appraisals and decisions in taking or not
taking action hereunder.
(c) Except as expressly provided in this Agreement, the
Agent shall not have any duty or responsibility, either initially
or on a continuing basis, to provide any Lender or the holder of
any Note 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 come into its possession, whether
before the making of the initial Loans or at any time or times
thereafter.
(d) The Agent shall not be responsible to any Lender or the
holder of any Note for any recitals, statements, information,
representations or warranties herein or in any other Loan
Document or in any document, instrument, certificate or other
writing delivered in connection herewith or therewith or for the
execution, effectiveness, genuineness, validity, enforceability,
perfection, priority or sufficiency of this Agreement or any
other Loan Document or the financial condition of the Borrower,
its Subsidiaries or any other Person, or be required to make any
inquiry concerning either the performance or observance of any of
the terms, provisions or conditions of this Agreement or any
other Loan Document, or the financial condition of the Borrower,
its Subsidiaries or any other Person or the existence or possible
existence of any Default or Event of Default.
9.4. Certain Rights of the Agent. If the Agent shall
request instructions from the Required Lenders with respect to
any act or action (including failure to act) in connection with
this Agreement or any other Loan Document, the Agent shall be
entitled to refrain from such act or taking such action unless
and until it shall have received such instructions, and the Agent
shall incur no liability to any Person by reason of so
refraining. The Agent shall not be obligated to take any action
hereunder or under any other Loan Document (i) if such action
would, in the reasonable opinion of the Agent, be contrary to
applicable law or this Agreement or any of the other Loan
Documents, (ii) if it shall not receive such advice or
concurrence of the Required Lenders as it reasonably deems
appropriate or (iii) if it shall not first be indemnified to its
satisfaction by the Lenders requesting such action against any
and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action. Without
limiting the foregoing, no Lender or holder of any Note shall
have any right of action whatsoever against the Agent as a result
of the Agent's acting or refraining from acting hereunder or
under any other Loan Document in accordance with the instructions
of the Required Lenders.
9.5. Notice of Default. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or
Event of Default (other than any Default or Event of Default
arising out of the failure to pay any principal, interest, fees
or other amounts payable to the Agent for the account of the
Lenders, as to which the Agent shall be deemed to have
knowledge), unless the Agent shall have received written notice
from the Borrower or a Lender referring to this Agreement,
describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent
receives such a notice, the Agent will give notice thereof to the
Lenders as soon as reasonably practicable; provided, however,
that if any such notice has also been furnished to the Lenders,
the Agent shall have no obligation to notify the Lenders with
respect thereto.
9.6. Reliance by Agent. The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, statement, consent, certificate,
telex, teletype or facsimile message, order or other documentary,
teletransmission or telephone message believed by it
to be genuine and correct and to have been signed, sent or made
by the proper Person. The Agent may consult with legal counsel
(including counsel for the Borrower), independent public
accountants and other experts selected by it with respect to all
matters pertaining to this Agreement and the other Loan Documents
and its duties hereunder and thereunder and shall not be liable
for any action taken or omitted to be taken by it in good faith
in accordance with the advice of such counsel, accountants or
experts.
9.7. Indemnification. To the extent the Agent is not
reimbursed by or on behalf of the Borrower, and without limiting
the obligation of the Borrower to do so, the Lenders will
reimburse and indemnify the Agent, 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 attorneys'
fees and expenses) or disbursements of any kind or nature
whatsoever that may at any time (including at any time following
the repayment in full of the Loans and the termination of the
Commitments) be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of this Agreement or
any other Loan Document or the transactions contemplated hereby
or thereby or any action taken or omitted by the Agent under or
in connection with any of the foregoing, and in particular will
reimburse the Agent for its out-of-pocket expenses promptly upon
demand by the Agent therefor; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting from the
Agent's gross negligence or willful misconduct.
9.8. The Agent in its Individual Capacity. With respect to
its Commitment, the Loans made by it and the Notes issued to it,
the Agent shall have the same rights and powers under the Loan
Documents as any other Lender or holder of a Note and may
exercise the same as though it were not performing the agency
duties specified herein; and the terms "Lenders," "Required
Lenders," "holders of Notes" and any similar terms shall, unless
the context clearly otherwise indicates, include the Agent in its
individual capacity. The Agent and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of
banking, trust, financial advisory or other business with the
Borrower or any of its Subsidiaries or any of their respective
Affiliates as if it 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. Holders. The Agent may deem and treat the payee of
any Note as the holder thereof for all purposes hereof unless and
until a written notice of the assignment, transfer or endorsement
thereof, as the case may be, shall have been filed with the
Agent. Any request, authority or consent of any Person that, at
the time of making such request or giving such authority or
consent, is the holder of any Note, shall be conclusive and
binding on any subsequent holder, transferee, assignee or
endorsee, as the case may be, of such Note or of any Note or
Notes issued in exchange therefor.
9.10. Successor Agent. The Agent may resign from its duties
as such at any time upon thirty (30) days' prior written notice
to the Borrower and the Lenders. Such resignation shall take
effect upon the appointment of a successor Agent as provided
hereinbelow. Upon any such notice of resignation by the Agent,
the Required Lenders will, with the prior written consent of the
Borrower, which consent shall not be unreasonably withheld,
appoint from among the Lenders a successor to the Agent (provided
that the Borrower's consent shall not be required in the event a
Default or Event of Default shall then have occurred and be
continuing). If no successor to the Agent shall have been
appointed within such thirty-day period, the resigning Agent may,
after consulting with the Borrower and the Lenders, appoint its
successor from among the Lenders, which successor shall serve
until such time, if any, as the Required Lenders shall have
appointed a successor as provided hereinabove. Upon the written
acceptance of any appointment by a successor to the resigning
Agent, such successor shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the
resigning Agent, and the resigning Agent shall be discharged from
its duties and obligations hereunder and under the other Loan
Documents. After the Agent's resignation as such, the provisions
of this Article shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent.
ARTICLE X
MISCELLANEOUS
10.1. Survival. All representations, warranties, covenants
and agreements made by or on behalf of the Borrower or any of its
Subsidiaries in this Agreement and in each of the other Loan
Documents shall survive the execution and delivery hereof or
thereof and the making and repayment of the Loans. In addition,
notwithstanding anything herein or under applicable law to the
contrary, the provisions of Annex 1, Section 2.11 and the
provisions of this Agreement and the other Loan Documents
relating to indemnification or payment of fees, costs and
expenses, including, without limitation, the provisions of
Sections 2.14(a), 2.14(b), 2.15, 2.16, 9.7, 10.5 and 10.6, shall
survive the termination of the Commitments and any termination or
cancellation of this Agreement or any of the other Loan
Documents.
10.2. Governing Law; Consent to Jurisdiction. THIS
AGREEMENT HAS BEEN EXECUTED, DELIVERED AND ACCEPTED IN, AND SHALL
BE DEEMED TO HAVE BEEN MADE IN, NORTH CAROLINA AND SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NORTH CAROLINA (WITHOUT REGARD TO THE
CONFLICTS OF LAW PROVISIONS THEREOF). AS PART OF THE
CONSIDERATION FOR NEW VALUE THIS DAY RECEIVED, THE BORROWER
HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE COURT WITHIN
MECKLENBURG COUNTY, NORTH CAROLINA OR ANY FEDERAL COURT LOCATED
WITHIN THE WESTERN DISTRICT OF THE STATE OF NORTH CAROLINA FOR
ANY PROCEEDING INSTITUTED HEREUNDER OR UNDER ANY OF THE OTHER
LOAN DOCUMENTS, OR ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY PROCEEDING
TO WHICH THE AGENT OR ANY LENDER OR THE BORROWER IS A PARTY,
INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN
CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT OR
ANY LENDER OR THE BORROWER AND THAT ARISES UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. THE
BORROWER IRREVOCABLY AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE
RIGHT OF APPEAL) BY ANY JUDGMENT RENDERED OR RELIEF GRANTED
THEREBY AND FURTHER WAIVES ANY OBJECTION THAT IT MAY HAVE BASED
ON LACK OF JURISDICTION OR IMPROPER VENUE OR FORUM NON CONVENIENS
TO THE CONDUCT OF ANY SUCH PROCEEDING. THE BORROWER CONSENTS THAT ALL
SERVICE OF PROCESS BE MADE BY REGISTERED OR CERTIFIED MAIL
DIRECTED TO IT AT ITS ADDRESS SET FORTH HEREINBELOW, AND SERVICE
SO MADE SHALL BE DEEMED TO BE COMPLETED UPON THE EARLIER OF
ACTUAL RECEIPT THEREOF OR FIVE (5) DAYS AFTER DEPOSIT IN THE
UNITED STATES MAILS, PROPER POSTAGE PREPAID AND PROPERLY
ADDRESSED. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
AFFECT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING ANY ACTION
OR PROCEEDING AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION.
10.3. Waiver of Jury Trial. THE BORROWER AND, BY ITS
ACCEPTANCE OF THE BENEFITS HEREOF, THE AGENT AND EACH LENDER,
HEREBY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THEIR
RESPECTIVE RIGHTS TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS, OR BASED UPON, ARISING OUT OF, OR IN
CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT OR
ANY LENDER OR THE BORROWER. The scope of this waiver is intended
to be all-encompassing of any and all disputes that may be filed
in any court and that relate to the subject matter of this
transaction, including, without limitation, contract claims, tort
claims, breach of duty claims and all other common law and
statutory claims. Each of the Borrower and, by its acceptance of
the benefits hereof, the Agent and each Lender, (i) acknowledges
that this waiver is a material inducement to enter into a
business relationship, that it has relied on this waiver in
entering into this Agreement or accepting the benefits hereof, as
the case may be, and that it will continue to rely on this waiver
in its related future dealings with the other parties hereto, and
(ii) further warrants and represents that it has reviewed this
waiver with its legal counsel and that, based upon such review,
it knowingly and voluntarily waives its jury trial rights to the
extent permitted by applicable law. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY BE MODIFIED ONLY BY THE EXPRESS WRITTEN
AGREEMENT OF ALL OF THE PARTIES TO THIS AGREEMENT, AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, MODIFICATIONS OR
SUPPLEMENTS TO OR RESTATEMENTS OF THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. IN
THE EVENT THAT THE WAIVER OF JURY TRIAL HEREIN SHALL BE
DETERMINED TO BE INVALID OR UNENFORCEABLE AS A MATTER OF LAW WITH
RESPECT TO ANY PARTY, THE PROVISIONS OF ANNEX 1 SHALL GOVERN AS
TO THE MATTERS SET FORTH THEREIN WITH RESPECT TO SUCH PARTY.
10.4. Notices. All notices and other communications
provided for hereunder shall be in writing (including
telegraphic, telex, facsimile transmission or cable
communication) and mailed, telegraphed, telexed, telecopied,
cabled or delivered to the party to be notified at the following
addresses:
If to the Borrower: Guaranty National Corporation
0000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With copies to: Orion Capital Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Ireland, Xxxxxxxxx, Xxxxx & Xxxxxx, P.C.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Agent: First Union National Bank of
North Carolina
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to any Lender: At the address
set forth on its signature page
hereto (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 to such other address as any party may designate for itself by
like notice to all other parties hereto. All such notices and
communications shall be deemed to have been given (i) if mailed
as provided above by any method other than overnight delivery
service, on the third Business Day after deposit in the mails,
(ii) if mailed by overnight delivery service, telegraphed,
telexed, telecopied or cabled, when delivered for overnight
delivery, delivered to the telegraph company, confirmed by telex
answerback, transmitted by telecopier or delivered to the cable
company, respectively, or (iii) if delivered by hand, upon
delivery; provided that notices and communications to the Agent
shall not be effective until received by it.
10.5. Fees and Expenses. The Borrower hereby agrees
(i) whether or not the transactions contemplated by this
Agreement shall be consummated, to pay upon demand all reasonable
out-of-pocket costs and expenses of the Agent (including, without
limitation, the reasonable fees and
expenses of counsel to the Agent, including any local counsel and
the allocated costs of in-house counsel) in connection with the
preparation, negotiation, execution, delivery and syndication of
this Agreement and the other Loan Documents, any amendment,
modification or waiver hereof or thereof or consent with respect
hereto or thereto, and the administration of the Loans, (ii) to
pay upon demand all reasonable out-of-pocket costs and expenses
of the Agent and each Lender (including, without limitation,
reasonable attorneys' fees and expenses, including the allocated
costs of in-house counsel) in connection with (y) any refinancing
or restructuring of the credit arrangement provided under this
Agreement, whether in the nature of a "work-out," in any
insolvency or bankruptcy proceeding or otherwise, and (z) the
enforcement, attempted enforcement or preservation of any rights
or remedies under this Agreement or any of the other Loan
Documents, whether in any action, suit or proceeding (including
any bankruptcy or insolvency proceeding) or otherwise, and
(iii) to pay and hold the Agent 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 Agent or any
Lender), that may be payable in connection with the transactions
contemplated by this Agreement and the other Loan Documents.
10.6. Indemnification. The Borrower hereby agrees, whether
or not the transactions contemplated by this Agreement shall be
consummated and in addition to the costs and expenses payable
under Section 10.5, from and at all times after the date of this
Agreement to indemnify and hold the Agent and each Lender and
each of their respective directors, officers, employees, agents
and Affiliates (each, an "Indemnified Person") harmless 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 or enforcement of this
Agreement or any of the other Loan 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 with
respect to any action, suit or proceeding (including any inquiry
or investigation) by any Person, whether threatened or initiated,
related to any of the foregoing, and including, without
limitation, in connection with the actual or alleged generation,
presence or release of any Hazardous Substances on or from, or
the transportation of Hazardous Substances to or from, any real
property owned or leased by the Borrower or any of its
Subsidiaries, and all other Environmental Claims, 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 inquiry or
investigation; provided, however, that no Indemnified Person
shall have the right to be indemnified hereunder for any
Indemnified Costs to the extent resulting 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, and shall be additional Obligations hereunder.
10.7. Amendments, Waivers, etc. No amendment, modification,
waiver or (other than in accordance with its express terms)
discharge or termination of, or consent to any departure by the
Borrower from, any provision of this Agreement or any other Loan
Document, shall be effective unless in a writing signed by the
Required Lenders (or by the Agent at the request 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 all of the Lenders, (i) reduce the
principal amount of, or rate of interest on, any Loan, or reduce
any fees or other Obligations (other than fees payable to the
Agent for its own account) or any obligations of any other Person
at any time primarily or contingently liable with respect to the
Obligations, (ii) extend any date fixed for any payment of
principal (including any scheduled date for mandatory reduction
or termination of the Commitments (including the Facility Expiry
Date)), interest (other than additional interest payable under
Section 2.6(b) during the continuance of an Event of Default),
fees (other than fees payable to the Agent for its own account)
or any other Obligations, (iii) increase the Commitment of any
Lender (it being understood that a waiver of any Event of Default
shall not constitute such an increase), (iv) change the
percentage of the 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 Agent to take, any action
hereunder (including as set forth in the definition of "Required
Lenders"), (v) amend or modify any provision of this Section 10.7
or (vi) consent to the sale, assignment or transfer by the
Borrower of any of its rights and obligations under this
Agreement or any of the other Loan Documents; and
(b) unless agreed to by the Agent in addition to the
Lenders required as provided hereinabove to take such action,
affect the rights or obligations of the Agent hereunder or under
any of the other Loan Documents;
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.
10.8. Assignments, Participations. (a) With the prior
written consent of the Agent and the Borrower (to be evidenced by
their counterexecution of the relevant Assignment and
Acceptance), which consent shall not be unreasonably withheld
(provided that such consent shall not be required in the case of
any assignment by a Lender to any of its Affiliates), each Lender
may assign to one or more other Persons (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) except in the case
of an assignment to an Affiliate of such Lender, the amount of
the Commitment of such assigning Lender being assigned pursuant
to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to each such assignment)
shall in no event be less than the lesser of (y) the entire
Commitment of such Lender immediately prior to such assignment or
(z) $5,000,000, (ii) each such assignment shall be to an Eligible
Assignee, and (iii) the parties to each such assignment will
execute and deliver to the Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment, and will pay a
nonrefundable processing fee of $3,000 to the Agent for its own
account (provided that such fee shall not be payable in the case
of an assignment by a Lender to any of its Affiliates). Upon
such execution, delivery, acceptance and recording of the
Assignment and Acceptance, from and after the effective date
specified therein (a) the Assignee thereunder shall be deemed a
party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment
and Acceptance, shall have the rights and obligations of the
assigning Lender hereunder with respect thereto and (b) the
assigning Lender shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights (other than
rights under the provisions of Annex 1 and the provisions of this
Agreement and the other Loan Documents relating to
indemnification or payment of fees, costs and expenses, to the
extent such rights relate to the time prior to the effective date
of such Assignment and Acceptance) and be released from its
obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion
of such assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto). The
terms and provisions of each Assignment and Acceptance shall,
upon the effectiveness thereof, be incorporated into and made a
part of this Agreement, and the covenants, agreements and
obligations of each Lender set forth therein shall be deemed made
to and for the benefit of the Agent and each other Lender party
to this Agreement as if set forth at length herein.
(b) The Agent will maintain 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
Commitment of, and principal amount of the Loans owing to, each
Lender from time to time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon
reasonable prior notice.
(c) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an Assignee and
counterexecuted by the Agent and the Borrower, together with any
Note or Notes subject to such assignment and (if required) the
processing and recording fee referred to in Section 10.8(a), the
Agent will, if such Assignment and Acceptance has been duly
completed and is in substantially the form of Exhibit D,
(i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give
notice thereof to the Borrower. Within five (5) Business Days
after its receipt of such notice, the Borrower, at its own
expense, will execute and deliver to the Agent in exchange for
the surrendered Note or Notes a new Note or Notes to the order of
such Assignee in an aggregate amount equal to the Commitment
assumed by it pursuant to such Assignment and Acceptance and, to
the extent the assigning Lender has retained its Commitment
hereunder, a new Note or Notes to the order of the assigning
Lender in an aggregate amount equal to the Commitment retained by
it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A.
(d) Each Lender may sell to one or more other Persons
(each, a "Participant") participations in any portion comprising
less than all of its rights and obligations under this Agreement
(including, without limitation, a portion of its Commitment, the
outstanding Loans made by it and the Note or Notes held by it);
provided, however, that (i) such Lender's obligations under this
Agreement shall remain unchanged and such Lender shall remain
solely responsible for the performance of such obligations,
(ii) the Borrower, the Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement,
(iii) no Lender shall sell any participation that, when taken
together with all other participations, if any, sold by such
Lender, covers all of such Lender's rights and obligations under
this Agreement (including, without limitation, all of its
Commitment, the outstanding Loans made by it and the Note or
Notes held by it), (iv) no Lender shall permit any Participant to
have any voting rights or any right to control the vote of such
Lender with respect to any amendment,
modification, waiver, consent or other action hereunder or under
any other Loan Document except as to actions of the type
described in clauses (i) and (ii) of Section 10.7(a) and (v) no
Participant shall have any rights under this Agreement or any of
the other Loan Documents, each Participant's rights against the
granting Lender in respect of any participation to be those set
forth in the 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 2.14(a), 2.14(b), 2.15, 2.16 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, in the case
of Section 2.15, such Participant shall have complied with the
requirements of such Section as if it were a Lender subject
thereto, and provided further 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) The Agent and each Lender may, in connection with any
assignment or participation or proposed assignment or
participation pursuant to this Section, disclose to the Assignee
or Participant or proposed Assignee or Participant any
information relating to the Borrower and its Subsidiaries
furnished to it by or on behalf of any other party hereto,
provided that such Assignee or Participant or proposed Assignee
or Participant agrees in writing to the Agent or such Lender, as
the case may be, to keep such information confidential to the
same extent required of the Lenders under Section 10.15.
(f) 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.
10.9. No Waiver. The rights and remedies of the Agent and
the Lenders expressly set forth in this Agreement and the other
Loan 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
Agent or any Lender in exercising any right, power or privilege
shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or privilege preclude
other or further exercise thereof or the exercise of any other
right, power or privilege or be construed to be a waiver of any
Default or Event of Default. No course of dealing between any of
the Borrower and the Agent or the Lenders or their agents or
employees shall be effective to amend, modify or discharge any
provision of this Agreement or any other Loan 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
Agent or any Lender to exercise any right or remedy or take any
other or further action in any circumstances without notice or
demand.
10.10. 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 and (ii) any Assignees
and Participants shall have such rights and obligations with
respect to this Agreement and the other Loan Documents as are
provided for under and pursuant to the provisions of
Section 10.8.
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 sections
and subsections of this Agreement have been inserted for
convenience only and shall not in any way affect the meaning or
construction of any of the provisions hereof. The provisions of
Annex 1, the exhibits and schedules hereto and the other Loan
Documents are incorporated in this Agreement by this reference.
Except as otherwise provided herein and in the other Loan
Documents, in the event of any inconsistency or conflict between
any provision of this Agreement and any provision of any of the
other Loan Documents, the provision of this Agreement shall
control.
10.13. Entire Agreement. THIS AGREEMENT AND THE OTHER
DOCUMENTS AND INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION
HEREWITH (A) EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING
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 FIRST UNION TO THE
BORROWER DATED OCTOBER 15, 1996, 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.
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 and delivery of a
counterpart hereof by each of the parties hereto.
10.15. Confidentiality. Each Lender agrees to take normal
and reasonable precautions and exercise due care to maintain the
confidentiality of all nonpublic information provided to it by or
on behalf of the Borrower or any Subsidiary in connection with
this Agreement or any other Loan Document, and agrees not to use
any such information for any purpose or in any manner other than
pursuant to the terms contemplated by this Agreement; provided,
however, that any Lender may disclose such information (i) to its
directors, employees and agents and to its auditors, counsel and
other professional advisors (provided that such Persons have been
made aware of the nonpublic and confidential nature of such
information and of the restrictions herein against disclosure
thereof), (ii) at the demand or request of any bank regulatory
authority, court or other Governmental Authority having or
asserting jurisdiction over such Lender, as may be required
pursuant to subpoena or other legal process, or otherwise in
order to comply with any applicable Requirement of Law (provided
that notice of any such subpoena or other legal process shall be
furnished to the Borrower unless such notice is legally
prohibited or such Governmental Authority requests that such
notice not be furnished to the Borrower), (iii) in connection
with any proceeding to enforce its rights hereunder or other
litigation or proceeding related hereto, (iv) to the Agent or any
other Lender, (v) to the extent the
same has become publicly available other than as a result of a
breach of this Agreement and (vi) pursuant to and in accordance
with the provisions of Section 10.8(e).
10.16. Effect of Amendment and Restatement. This Agreement
amends and restates the Original Credit Agreement in its
entirety; provided, however, that the provisions of the Original
Credit Agreement and the other Loan Documents relating to
indemnification or payment of fees, costs and expenses for the
benefit of the Agent and the Lenders (in each case, as defined in
the Original Credit Agreement), including, without limitation,
the provisions of Sections 2.14(a), 2.14(b), 2.15, 2.16, 9.7,
10.5 and 10.6 of the Original Credit Agreement, shall survive the
effectiveness of this Agreement and the amendment and restatement
of the Original Credit Agreement effected hereby. Upon the
effectiveness of this Agreement, (i) all Existing Loans shall be
deemed to be Loans hereunder, shall be evidenced by the Notes and
shall be entitled to all of the benefits of this Agreement and
the other Loan Documents, and (ii) all other Loan Documents,
instruments, certificates, financial statements and other
documents executed or delivered by or on behalf of the Borrower
or any of its Subsidiaries pursuant to the Original Credit
Agreement at any time prior to the effectiveness of this
Agreement shall be deemed to have been executed or delivered
pursuant to this Agreement.
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.
GUARANTY NATIONAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
Commitment: FIRST UNION NATIONAL BANK OF
$26,000,000 NORTH CAROLINA, as Agent and
as Lender
By: /s/ Xxxx X. Xxxxxxxxx
Title: Senior Vice President
Instructions for wire transfers to the
Agent:
First Union National Bank of
North Carolina
ABA Routing Xx. 000000000
Xxxxxxxxx, Xxxxx Xxxxxxxx
General Ledger No. 465906, RC No. 5007
Attention: Syndication Agency Services
Re: Guaranty National Corporation
Address for notices (as a Lender):
First Union NationalBank of
North Carolina
Financial Institutions Group
Xxx Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx, Xx.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Commitment: BANK OF TOKYO-MITSUBISHI TRUST COMPANY
$10,000,000
By: /s/ Xxxx X. Judge
Title: Vice President
Address:
1251 Avenue of the Americas
00xx Xxxxx, Xxxxxxxx Xxxxxxx Xxxxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Commitment: THE FIRST NATIONAL BANK OF CHICAGO
$20,000,000
By: /s/ Xxxxxxx Xxxxxx
Title: Vice President
Address:
One First Xxxxxxxx Xxxxx
Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Commitment: FLEET NATIONAL BANK
$24,000,000
By: /s/ Xxxx X. Xxxxxxxxxx
Title: Assistant Vice President
Address:
000 Xxxx Xxxxxx, XXX 000
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Commitment: MELLON BANK, N.A.
$20,000,000
By: /s/ Xxxxx X. Xxxxxxxxx
Title: Assistant Vice President
Address:
One Mellon Bank Center, Room 370
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Commitment: NORWEST BANK COLORADO, NATIONAL
$10,000,000 ASSOCIATION
By: /s/ Xxxxxxxxxx Xxxxxxxx
Title: Vice President
Address:
Norwest Bank Colorado, N.A.
0000 Xxxxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Annex 1 to Amended and Restated
Credit Agreement
First Union National Bank
of North Carolina, as Agent
Guaranty National Corporation
December 16, 1996 / $110,000,000
______________________________
Provisions for Alternative Dispute Resolution
1. Arbitration. Except as otherwise specifically set
forth in the Loan Documents or agreed to in writing by the
Borrower, the Agent and the Lenders, and except as expressly
provided otherwise in Section 3 below, in the event the
Borrower's waiver of trial by jury contained in Section 10.3 of
the Credit Agreement is determined to be invalid or unenforceable
as a matter of law, then any action, dispute, claim or
controversy between the parties, whether sounding in contract,
tort, or otherwise, arising under the Credit Agreement or any of
the other Loan Documents, arising out of or in connection with
any of the Loan Documents, or any proceeding to which the Agent
or any Lender is a party, including any actions based upon,
arising out of, or in connection with any course of conduct,
course of dealing, statement (whether oral or written), or
actions of the Agent, any Lender or the Borrower ("Dispute" or
"Disputes"), shall be resolved by arbitration as set forth in
this Annex. Such Disputes shall be resolved by binding
arbitration in accordance with Title 9 of the United States Code,
as amended, and the Commercial Arbitration Rules of the American
Arbitration Association ("AAA"), as in effect from time to time
(the "Rules"). In the event of any inconsistency between the
Rules and the provisions of this Annex, the provisions of this
Annex shall supersede the Rules. All statutes of limitations
that would otherwise be applicable shall apply to any arbitration
proceeding hereunder. In any arbitration proceeding subject to
the provisions of this Annex, the arbitrator is specifically
empowered to decide (by documents only, or with a hearing, at the
arbitrator's sole discretion) pre-hearing motions that are
substantially similar to pre-hearing motions to dismiss and
motions for summary adjudication. Judgment upon the award
rendered may be entered in any court having jurisdiction.
Whenever an arbitration is required, the parties shall select an
arbitrator in the manner provided in Section 4 below.
2. Judicial Reference. If a Dispute is not submitted to
arbitration as provided in Section 1 above for any reason, but
becomes the subject of a judicial action, at any point in the
proceeding, any party may elect to have any specific questions of
fact or law, or all questions of fact or law, determined by a
reference in accordance with Rule 53 of the North Carolina Rules
of Civil Procedure (or the equivalent rule of another State, as
applicable). A party shall not waive the right to request such
judicial reference for any remaining questions of fact or law to
be decided by virtue of the party's initiating or participating
in judicial or other proceedings or by failure to request such a
reference up to any point in a judicial proceeding. Whenever
such an election is made, the parties shall designate to the
court a single referee selected in the manner provided in Section
4 below. Judgment upon the award rendered shall be entered in the
court in which such proceeding was commenced.
3. Remedies. No provision of, nor the exercise of any
rights under, Sections 1 or 2 above shall limit or otherwise
affect the right of the Agent or any Lender (1) to exercise any
self help remedies available under the Loan Documents and
applicable law, including, without limitation, setoff, or to
exercise any other judicial or nonjudicial rights and remedies
available to it under any of the Loan Documents and applicable
law, or (2) to obtain provisional or ancillary remedies,
including, without limitation, injunctive relief and the
appointment of a receiver, from a court having jurisdiction
before, during or after the pendency of any arbitration or
referral. The Agent or any Lender's pursuit of provisional or
ancillary remedies, or its exercise of self help and other judicial or
nonjudicial remedies, shall not constitute a waiver of its right
to submit the Dispute to arbitration or judicial reference.
4. Selection of Arbitrator or Referee. Whenever an
arbitration is required under Section 1 above or a referral is
required under Section 2 above, the arbitrator or referee shall
be selected in accordance with this Section 4. Except as
otherwise provided, the arbitrator or referee shall be an
attorney or retired judge selected in accordance with the Rules
of the AAA. The parties agree to request that the arbitrator
deliver a written opinion setting forth in reasonable detail the
basis for his conclusions relating to the Dispute. Qualified
retired judges shall be selected through panels maintained by
AAA, or any North Carolina Superior Court (or a court, of an
equivalent or higher level, of another State) or private
organization providing such services. A single arbitrator who is
an attorney but is not a retired judge shall have the power to
render a maximum aggregate award against any party of $100,000.
Where any party makes timely written request prior to appointment
of the arbitrator, or where the claim of any party exceeds
$100,000, the arbitrator shall be a retired judge formerly
sitting on the bench in a North Carolina Superior Court or any
higher State court (or a court, of an equivalent level, of
another State), or a retired Federal court judge formerly sitting
on the bench in a United States Court of Appeals or any Federal
District Court. A single arbitrator who is a retired judge shall
have the power to render a maximum aggregate award against any
party of $1,000,000. Where any party seeks an award in excess of
$1,000,000, the Dispute shall be decided by a majority vote of
three arbitrators, at least one of whom shall meet the
requirements for retired judges set forth herein. For purposes
of this Section 4, the computation of the maximum award an
arbitrator may make shall include any amounts awarded for
arbitration fees, attorneys fees and all other related costs
provided by Section 5 below.
5. Miscellaneous. The Credit Agreement shall be
interpreted, and the resolution of all Disputes and the rights
and liabilities of the parties shall be determined, in accordance
with the internal laws (as opposed to conflicts of law
provisions) of the State of North Carolina; provided that any
arbitration questions arising under this Annex on dispute
resolution shall be governed in accordance with Title 9 of the
United States Code, as amended. This Annex is incorporated into
and made a part of the Credit Agreement by this reference,
constitutes the entire agreement of the parties with respect to
its subject matter and supersedes all prior discussions,
arrangements, negotiations and other communications on dispute
resolution. To the extent any provision of this Annex is
prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Annex. Capitalized terms
used herein without definition shall have the meanings assigned
to them in the Credit Agreement. The provisions of this Annex
shall survive any termination or expiration of the Credit
Agreement until payment in full of the Obligations and
termination of the Commitments, unless the parties otherwise
expressly agree in writing. The arbitrator shall have the power
to award to the prevailing party recovery of all costs, expenses
and fees incurred by it (including reasonable attorneys' fees,
administrative fees, arbitrators' fees, and court costs), and in
particular, but without limitation of the foregoing, shall have
the power to award to either party hereto, whether or not such
party shall be the prevailing party in an arbitration, recovery
of all costs, expenses and fees incurred by it (including
reasonable attorneys' fees, administrative fees, arbitrators'
fees, and court costs), but only to the extent payable or
reimbursable by the other party under the applicable provisions
of the Credit Agreement and the other Loan Documents, including,
without limitation, Section 10.5 of the Credit Agreement.
Annex 2 to Amended and Restated
Credit Agreement
First Union National Bank
of North Carolina, as Agent
Guaranty National Corporation
December 16, 1996 / $110,000,000
______________________________
Existing Existing Amount Pro
Loans (Prior Loans (After Purchased Rata
Lender to Agreement) (Assignment) (Sold) Share Committment
------ ------------- ------------ --------- ----- -----------
First Union
National Bank
of
North
Carolina $21,818,182 $23,636,364 $1,818,182 23.6363% $26,000,000
Bank of Tokyo-
Mitsubishi
Trust
Company $9,090,909 $9,090,909 0 9.0909% $10,000,000
The First
National
Bank of
Chicago $9,090,909 $18,181,818 $9,090,909 18.1818% $20,000,000
Fleet
National
Bank $20,000,000 $21,818,182 $1,818,182 21.8181% $24,000,000
Mellon
Bank, N.A. $18,181,818 $18,181,818 0 18.1818% $20,000,000
Norwest
Bank
Colorado,
N.A. $21,818,182 $9,090,909 ($12,727,273) 9.0909% $10,000,000
----------- ---------- ------------- ------- -----------
$100,000,000 $100,000,000 0 100.000% $110,000,000
=========== =========== ============= ======== ============
Exhibit A to Amended and Restated
Credit Agreement
First Union National Bank
of North Carolina, as Agent
Guaranty National Corporation
December 16, 1996 / $110,000,000
______________________________
FORM OF REVOLVING CREDIT NOTE
$______________ ______________, ____
Charlotte, North Carolina
FOR VALUE RECEIVED, GUARANTY NATIONAL CORPORATION, a
Colorado corporation (the "Borrower"), hereby promises to pay to
the order of
___________________________________________ (the "Lender"),
at the offices of First Union National Bank of North Carolina
(the "Agent") located at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000-0000 (or at such other place or places as
the Agent may designate) the principal sum of up to
__________________________ DOLLARS AND ___/100
($___________), or such lesser amount as may constitute the
unpaid principal amount of the Loans payable to the Lender, under
the terms and conditions of this promissory note (this "Revolving
Credit Note") and the Amended and Restated Credit Agreement,
dated as of December 16, 1996, among the Borrower, the Lenders
from time to time parties thereto, and the Agent (as amended,
modified or supplemented from time to time, the "Credit
Agreement"). The defined terms in the Credit Agreement are used
herein with the same meaning. The Borrower also unconditionally
promises to pay interest on the aggregate unpaid principal amount
of this Revolving Credit Note at the rates provided in the Credit
Agreement.
This Revolving Credit Note is one of a series of Notes
issued to evidence the revolving credit Facility established
under the Credit Agreement. All of the terms, conditions and
covenants of the Credit Agreement are expressly made a part of
this Revolving Credit Note by reference in the same manner and
with the same effect as if set forth herein at length, and any
holder of this Revolving Credit Note is entitled to the benefits
of and remedies provided in the Credit Agreement and the other
Loan Documents. Reference is made to the Credit Agreement for
provisions relating to the interest rate, maturity, payment,
prepayment and acceleration of this Revolving Credit Note.
In the event of an acceleration of the maturity of this
Revolving Credit Note, this Revolving Credit Note, and all other
indebtedness of the Borrower to the Lender, shall become
immediately due and payable, without presentation, demand,
protest or notice of any kind, all of which are hereby waived by
the Borrower.
In the event this Revolving Credit Note is not paid when due
at any stated or accelerated maturity, the Borrower agrees to
pay, in addition to the principal and interest, all costs of
collection, including reasonable attorneys' fees.
This Revolving Credit Note shall be governed by and
construed in accordance with the internal laws and judicial
decisions of the State of North Carolina. The Borrower hereby
submits to
the jurisdiction and venue of the federal and state courts
located in Mecklenburg County, North Carolina, although the
Lender shall not be limited to bringing an action in such courts.
IN WITNESS WHEREOF, the Borrower has caused this Revolving
Credit Note to be executed under seal by its duly authorized
corporate officer as of the day and year first above written.
GUARANTY
NATIONAL CORPORATION
By: _______________________________
Title: _____________________________
Borrower's Taxpayer Identification No. 00-0000000
Exhibit B-1 to Amended and Restated
Credit Agreement
First Union National Bank
of North Carolina, as Agent
Guaranty National Corporation
December 16, 1996 / $110,000,000
______________________________
FORM OF
NOTICE OF BORROWING
[Date]
First Union National Bank of
North Carolina, as Agent
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, Guaranty National Corporation (the
"Company"), refers to the Amended and Restated Credit Agreement,
dated as of December 16, 1996, among the Company, certain banks
and other financial institutions from time to time parties
thereto (the "Lenders"), and you, as Agent for the Lenders (as
amended, modified or supplemented from time to time, the "Credit
Agreement," the terms defined therein being used herein as
therein defined), and, pursuant to Section 2.2(a) of the Credit
Agreement, hereby gives you irrevocable notice that the
undersigned hereby requests a Borrowing under the Credit
Agreement, and to that end sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required
by Section 2.2(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is
_______________ (the "Borrowing Date"). (1)
(ii) The aggregate principal amount of the
Proposed Borrowing is $_______________.
(iii) The Loans comprising the Proposed Borrowing
shall be initially maintained as [Base Rate Loans]
[LIBOR Loans].
[(iv) The initial Interest Period for each Loan
made as part of the Proposed Borrowing shall be
[one/two/three/six months].](2)
__________________________
(1) Shall be a Business Day at least one Business Day after
the date hereof (in the case of Base Rate Loans) or at
least three Business Days after the date hereof (in the
case of LIBOR loans).
(2) To be included for a Proposed Borrowing comprised of
LIBOR Loans.
The undersigned hereby certifies that the following
statements are true on the date hereof and will be true on the
Borrowing Date:
(A) Each of the representations and warranties
contained in Article IV of the Credit Agreement and in
the other Loan Documents is and will be true and
correct before and after giving effect to the Proposed
Borrowing and to the application of the proceeds
therefrom, as though made on each such date (except to
the extent any such representation or warranty is
expressly stated to have been made as of a specific
date, in which case such representation or warranty
shall be true and correct as of such date); and
(B) No Default or Event of Default has occurred
and is continuing or would result from the Proposed
Borrowing or from the application of the proceeds
therefrom.
Very truly yours,
GUARANTY NATIONAL CORPORATION
By: ______________________________
Title:____________________________
Exhibit B-2 to Amended and Restated
Credit Agreement
First Union National Bank
of North Carolina, as Agent
Guaranty National Corporation
December 16, 1996 / $110,000,000
______________________________
FORM OF
NOTICE OF CONVERSION/CONTINUATION
[Date]
First Union National Bank of
North Carolina, as Agent
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, Guaranty National Corporation (the
"Company"), refers to the Amended and Restated Credit Agreement,
dated as of December 16, 1996, among the Company, certain banks
and other financial institutions from time to time parties
thereto (the "Lenders"), and you, as Agent for the Lenders (as
amended, modified or supplemented from time to time, the "Credit
Agreement," the terms defined therein being used herein as
therein defined), and, pursuant to Section 2.9(b) of the Credit
Agreement, hereby gives you irrevocable notice that the
undersigned hereby requests a [conversion] [continuation] of
Loans under the Credit Agreement, and to that end sets forth
below the information relating to such [conversion]
[continuation] (the "Proposed [Conversion] [Continuation]") as
required by Section 2.9(b) of the Loan Agreement:
(i) The Business Day of the Proposed [Conversion]
[Continuation] is _______________.(1)
(ii) The Proposed [Conversion] [Continuation]
involves $____________ in aggregate principal amount of
Loans made pursuant to a Borrowing on _______________.
_____________________________
(1) Shall be a Business Day at least one Business Day after
the date hereof (in the case of any conversion of LIBOR
Loans into Base Rate Loans) or at least three Business
Days after the date hereof (in the case of any
conversion of Base Rate Loans into, or continuation of,
LIBOR Loans), and additionally, in the case of any
conversion of LIBOR Loans into Base Rate Loans, or
continuation of LIBOR Loans, shall be the last day of
the Interest Period applicable thereto.
(iii) The Loans referred to in clause (ii) above
are presently maintained as [Base Rate] [LIBOR] Loans
and are proposed hereby to be [converted into Base
Rate/LIBOR Loans] [continued as LIBOR Loans].
[(iv) The initial Interest Period for each Loan
being [converted into] [continued as] a LIBOR Loan as
part of the Proposed [Conversion] [Continuation] shall
be [one/two/three/six months].](2)
The undersigned hereby certifies that the following
statements are true on the date hereof and will be true on the
effective date of the Proposed [Conversion] [Continuation]:
(A) Each of the representations and warranties
contained in Article IV of the Credit Agreement and in
the other Loan Documents is and will be true and
correct before and after giving effect to the Proposed
[Conversion] [Continuation], as though made on each
such date (except to the extent any such representation
or warranty is expressly stated to have been made as of
a specific date, in which case such representation or
warranty shall be true and correct as of such date);
and
(B) No Default or Event of Default has occurred
and is continuing or would result from the Proposed
[Conversion] [Continuation].
Very truly yours,
GUARANTY NATIONAL CORPORATION
By: ______________________________
Title: ____________________________
___________________
(2) To be included in the case of any conversion of Base Rate
Loans into, or continuation of, LIBOR Loans.
Exhibit C to Amended and Restated
Credit Agreement
First Union National Bank
of North Carolina, as Agent
Guaranty National Corporation
December 16, 1996 / $110,000,000
__________________________
FORM OF
COMPLIANCE CERTIFICATE
(GAAP Financial Statements)
THIS CERTIFICATE is given pursuant to Section 5.3(a) of the
Amended and Restated Credit Agreement, dated as of December 16,
1996 (as amended, modified or supplemented from time to time, the
"Credit Agreement," the terms defined therein being used herein
as therein defined), among Guaranty National Corporation (the
"Borrower"), certain banks and other financial institutions from
time to time parties thereto (the "Lenders"), and First Union
National Bank of North Carolina, as Agent for the Lenders.
The undersigned hereby certifies that:
1. He is the duly elected [Chief Executive Officer/[insert
title of Senior Financial Officer]] of the Borrower.
2. Enclosed with this Certificate are copies of the
financial statements of the Borrower and its Subsidiaries as of
_____________, and for the [________-month period] [year] then
ended, required to be delivered under Section [5.1(a)] [5.1(b)]
of the Credit Agreement. Such financial statements have been
prepared in accordance with Generally Accepted Accounting
Principles [(subject to the absence of notes required by
Generally Accepted Accounting Principles and subject to normal
year-end audit adjustments)](1) and fairly present the financial
condition of the Borrower and its Subsidiaries on a consolidated
basis as of the date indicated and the results of operations of
the Borrower and its Subsidiaries on a consolidated basis for the
period covered thereby.
3. The undersigned has reviewed the terms of the Credit
Agreement and has made, or caused to be made under the
supervision of the undersigned, a review in reasonable detail of
the transactions and condition of the Borrower and its
Subsidiaries during the accounting period covered by such
financial statements.
4. The examination described in paragraph 3 above did not
disclose, and the undersigned has no knowledge of the existence
of, any Default or Event of Default during or at the end of the
accounting period covered by such financial statements or as of
the date of this Certificate. [, except as set forth below.
Describe here or in a separate attachment any exceptions to
paragraph 4 above by listing, in reasonable detail, the nature of
the Default or Event of Default, the period during which it
existed and the action that the Borrower has taken or proposes to
take with respect thereto.]
___________________________
(1) Insert the case of quarterly financial statements.
5. Attached to this Certificate as Attachment A is a
Covenant Compliance Worksheet reflecting the computation of the
financial covenants set forth in Section 6.5 of the Credit
Agreement as of the last day of the period covered by the
financial statements enclosed herewith.
6. Attached to this Certificate as Attachment B is a Rate
Calculation Worksheet reflecting the computation of the
Capitalization Ratio as of the last day of the period covered by
the financial statements enclosed herewith.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Certificate as of the _______ day of
_____________, ____.
[signature]
Name: _______________________________
Title: ________________________________
ATTACHMENT A
COVENANT COMPLIANCE WORKSHEET
Consolidated Net Worth
(Section 6.5 of the Credit Agreement) Not less than the following:
(1) Base Amount for calculating required
Consolidated Net Worth $190,000,000
(2) Aggregate amount of Consolidated Net
Income for each fiscal quarter ending
after December 31, 1996 (2) $_________
Multiplied by: 30%
Equals: Consolidated Net Income adjustment $
===========
(3) Aggregate amount of all increases
in the stated capital and additional
paid-in capital accounts of the Borrower
resulting from the issuance of equity
securities or other capital investments
after December 31, 1996 $
============
(4) Required Consolidated Net Worth:
Add Lines 1, 2 and 3 $
============
(5) Actual Consolidated Net Worth as of measurement date $
============
----------------------------------------------------------------------------
(2) Consolidated Net Income for any fiscal quarter shall be
included only if positive.
ATTACHMENT B
RATE CALCULATION WORKSHEET
Capitalization Ratio
(1) Consolidated Indebtedness as of the
measurement date (excluding Investment
Borrowings to the extent permitted under
Section 7.2 of the Credit Agreement) $
============
(2) Total Capitalization:
(a) Consolidated Indebtedness as of
the measurement date (excluding
Investment Borrowings to the extent
permitted under Section 7.2 of the
Credit Agreement)
$__________
(b) Consolidated Net Worth as of
the measurement date (from the
Covenant Compliance Worksheet)
$__________
(c) Total Capitalization:
Add Lines 2(a) and 2(b) $
============
(3) Ratio of Consolidated Indebtedness to Total
Capitalization:
Divide Line 1 by Line 2(c) $
============
Applicable LIBOR Margin (pursuant to the Credit Agreement):
__________%
Applicable Commitment Fee Rate (pursuant to the Credit
Agreement):
__________%
FORM OF
COMPLIANCE CERTIFICATE
(Statutory Financial Statements)
THIS CERTIFICATE is given pursuant to Section 5.3(a) of the
Amended and Restated Credit Agreement, dated as of December 16,
1996 (as amended, modified or supplemented from time to time, the
"Credit Agreement," the terms defined therein being used herein
as therein defined), among Guaranty National Corporation (the
"Borrower"), certain banks and other financial institutions from
time to time parties thereto (the "Lenders"), and First Union
National Bank of North Carolina, as Agent for the Lenders.
The undersigned hereby certifies that:
1. He is the duly elected [Chief Executive Officer/[insert
title of Senior Financial Officer]] of the Borrower.
2. Enclosed with this Certificate are copies of the
statutory financial statements of each Insurance Subsidiary as of
_____________, and for the [________-month period] [year] then
ended, required to be delivered under Section [5.2(a)] [5.2(b)]
of the Credit Agreement. Such statutory financial statements
have been prepared in accordance with Statutory Accounting
Principles [(subject to the absence of notes required by
Statutory Accounting Principles and to normal year-end audit
adjustments)](3) and fairly present the financial condition of
each Insurance Subsidiary as of the date indicated and the
results of operations, changes in capital and surplus and cash
flow of each Insurance Subsidiary for the period covered thereby.
3. The undersigned has reviewed the terms of the Credit
Agreement and has made, or caused to be made under the
supervision of the undersigned, a review in reasonable detail of
the transactions and condition of the Borrower and its
Subsidiaries during the accounting period covered by such
financial statements.
4. The examination described in paragraph 3 above did not
disclose, and the undersigned has no knowledge of the existence
of, any Default or Event of Default during or at the end of the
accounting period covered by such financial statements or as of
the date of this Certificate. [, except as set forth below.
Describe here or in a separate attachment any exceptions to
paragraph 4 above by listing, in reasonable detail, the nature of
the Default or Event of Default, the period during which it
existed and the action that the Borrower has taken or proposes to
take with respect thereto.]
5. Attached to this Certificate as Attachment A is a
Covenant Compliance Worksheet reflecting the computation of the
financial covenants set forth in Sections 6.1, 6.2, 6.3 and 6.4
of the Credit Agreement as of the last day of the period covered
by the financial statements enclosed herewith.
_____________________
(3) Insert in the case of quarterly statutory statements.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Certificate as of the _______ day of
_____________, ____.
[signature]
Name: _______________________________
Title: ________________________________
ATTACHMENT A
COVENANT COMPLIANCE WORKSHEET
Consolidated Statutory Surplus
(Section 6.1 of the Credit Agreement): Not less than $200,000,000
(1) Statutory Surplus of GNIC as of the
measurement date $
=================
(2) Statutory Surplus of VICW as of the
measurement date $
=================
(3) Consolidated Statutory Surplus:
Add Lines 1 and 2
$
=================
(Include other Significant Subsidiaries as required.)
Operating Leverage Ratio
(Section 6.2 of the Credit Agreement): Not greater than 3.0 to 1.0
(1) GNIC
(a) Net Written Premiums as of
the measurement date: $
==================
(b) Statutory Surplus as of
the measurement date: $
==================
(c) Operating Leverage Ratio:
Divide Line 1(a) by Line 1(b)
==================
(2) VICW
(a) Net Written Premiums as of
the measurement date: $
==================
(b) Statutory Surplus as of
the measurement date: $
==================
(c) Operating Leverage Ratio:
Divide Line 1(a) by Line 1(b)
==================
(Include other Significant Subsidiaries as required.)
Fixed Charge Coverage Ratio
(Section 6.3 of the Credit Agreement): Not less than 1.5 to 1.0
(1) Sources of Funds:
(a) Aggregate Available Dividend Amount
for the Measurement Period $________________
(b) Aggregate management fees and lease payments
received by the Borrower during the
Measurement Period $________________
(c) Aggregate tax receipts of the Borrower
during the Measurement Period $________________
(d) Aggregate tax payments (including tax
sharing payments) by the Borrower during
the Measurement Period ($_______________)
(e) Sources of Funds: Add Lines 1(a), 1(b)
and 1(c) and subtract Line 1(d) $
================
(2) Fixed Charges:
(a) Projected principal and interest payments on
all Indebtedness for the four-quarter period
following the Measurement Period $_________________
(b) Projected lease payments for the four-quarter
period following the Measurement Period $_________________
(c) Fixed charges: Add Lines 2(a) and 2(b) $
=================
(3) Fixed Charge Coverage Ratio:
Divide Line 1(e) by Line 2(c) =================
Risk - Based Capital Ratio
(Section 6.4 of the Credit Agreement): Not less than 150% of
Company Action Level RBC
(1) GNIC
(a) Total adjusted capital as of
the measurement date $
==================
(b) Company Action Level RBC as of the
measurement date $
==================
(c) Required total adjusted capital as of the
measurement date:
Multiply Line 1(b) by 150% $
==================
(2) VICW
(a) Total adjusted capital as of
the measurement date $
==================
(b) Company Action Level RBC as of the
measurement date $
=================
(c) Required total adjusted capital as of the
measurement date:
Multiply Line 1(b) by 150% $
=================
