Exh 10(e)
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$35,000,000
CREDIT AGREEMENT
AMONG
FUND AMERICAN ENTERPRISES HOLDINGS, INC.,
as Borrower,
FUND AMERICAN ENTERPRISES, INC.,
as Subsidiary Borrower,
THE LENDERS NAMED HEREIN
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
DATED AS OF
November 26, 1996
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS..............................................................................................1
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ARTICLE II
THE CREDITS.............................................................................................14
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2.1. Advances.....................................................................................14
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2.2. Ratable Loans................................................................................15
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2.3. Types of Advances............................................................................15
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2.4. Facility Fee; Reductions in Aggregate Commitment.............................................15
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2.5. Minimum Amount of Each Advance...............................................................15
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2.6. Optional Principal Payments..................................................................16
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2.7. Method of Selecting Types and Interest Periods for New Advances..............................16
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2.8. Conversion and Continuation of Outstanding Advances..........................................16
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2.9. Changes in Interest Rate, etc................................................................17
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2.10. Rates Applicable After Default...............................................................17
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2.11. Method of Payment............................................................................18
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2.12. Notes........................................................................................18
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2.13. Interest Payment Dates; Interest and Fee Basis...............................................18
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2.14. Notification of Advances, Interest Rates, Prepayments and Commitment
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Reductions...................................................................................18
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2.15. Lending Installations........................................................................19
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2.16. Non-Receipt of Funds by the Agent............................................................19
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2.17. Taxes........................................................................................19
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2.18. Agent's Fees.................................................................................20
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ARTICLE III
CHANGE IN CIRCUMSTANCES.................................................................................20
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3.1. Yield Protection.............................................................................20
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3.2. Changes in Capital Adequacy Regulations......................................................21
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3.3. Availability of Types of Advances............................................................21
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3.4. Funding Indemnification......................................................................22
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3.5. Lender Statements; Survival of Indemnity.....................................................22
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ARTICLE IV
CONDITIONS PRECEDENT....................................................................................22
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4.1. Initial Loans................................................................................22
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4.2. Each Future Advance..........................................................................24
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ARTICLE V
REPRESENTATIONS AND WARRANTIES..........................................................................24
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5.1. Corporate Existence and Standing.............................................................24
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5.2. Authorization and Validity...................................................................25
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5.3. Compliance with Laws and Contracts...........................................................25
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5.4. Governmental Consents........................................................................25
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5.5. Financial Statements.........................................................................26
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5.6. Material Adverse Change......................................................................26
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5.7. Taxes........................................................................................26
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5.8. Litigation and Contingent Obligations........................................................26
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5.9. Capitalization...............................................................................26
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5.10. ERISA........................................................................................27
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5.11. Defaults.....................................................................................27
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5.12. Federal Reserve Regulations..................................................................27
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5.13. Investment Company...........................................................................27
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5.14. Certain Fees.................................................................................27
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5.15. Solvency.....................................................................................28
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5.16. Material Agreements..........................................................................28
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5.17. Environmental Laws...........................................................................28
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5.18. Insurance....................................................................................28
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5.19. Disclosure...................................................................................29
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ARTICLE VI
COVENANTS...............................................................................................29
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6.1. Financial Reporting..........................................................................29
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6.2. Use of Proceeds..............................................................................30
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6.3. Notice of Default............................................................................31
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6.4. Conduct of Business..........................................................................31
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6.5. Taxes........................................................................................31
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6.6. Insurance....................................................................................31
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6.7. Compliance with Laws.........................................................................31
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6.8. Maintenance of Properties....................................................................31
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6.9. Inspection...................................................................................31
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6.10. Dividends....................................................................................32
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6.11. Indebtedness.................................................................................32
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6.12. Merger.......................................................................................32
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6.13. Contingent Obligations.......................................................................33
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6.14. Liens........................................................................................34
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6.15. Affiliates...................................................................................35
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6.16. Environmental Matters........................................................................35
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6.17. Change in Corporate Structure; Fiscal Year...................................................35
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6.18. Inconsistent Agreements......................................................................35
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6.19. Financial Covenants..........................................................................35
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6.19.1. Minimum Net Worth...................................................................35
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6.19.2. Leverage Ratio......................................................................35
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6.19.3. Borrower Finance Assets Ratio...............................................36
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6.19.4 Subsidiary Borrower Finance Assets Ratio....................................36
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6.20. Tax Consolidation............................................................................36
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6.21. ERISA Compliance.............................................................................36
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ARTICLE VII
DEFAULTS................................................................................................37
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ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES..........................................................38
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8.1. Acceleration.................................................................................38
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8.2. Amendments...................................................................................38
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8.3. Preservation of Rights.......................................................................39
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ARTICLE IX
GENERAL PROVISIONS......................................................................................40
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9.1. Survival of Representations..................................................................40
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9.2. Governmental Regulation......................................................................40
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9.3. Taxes........................................................................................40
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9.4. Headings.....................................................................................40
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9.5. Entire Agreement.............................................................................40
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9.6. Several Obligations; Benefits of this Agreement..............................................40
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9.7. Expenses; Indemnification....................................................................40
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9.8. Numbers of Documents.........................................................................41
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9.9. Accounting...................................................................................41
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9.10. Severability of Provisions...................................................................41
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9.11. Nonliability of Lenders......................................................................41
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9.12. CHOICE OF LAW................................................................................41
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9.13. CONSENT TO JURISDICTION......................................................................41
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9.14. WAIVER OF JURY TRIAL.........................................................................42
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9.15. Disclosure...................................................................................42
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9.16. Counterparts.................................................................................42
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9.17. Certain Notices..............................................................................42
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9.18. Treatment of Certain Information: Confidentiality............................................43
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ARTICLE X
THE AGENT...............................................................................................43
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10.1. Appointment..................................................................................43
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10.2. Powers.......................................................................................43
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10.3. General Immunity.............................................................................44
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10.4. No Responsibility for Loans, Recitals, etc...................................................44
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10.5. Action on Instructions of Lenders............................................................44
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10.6. Employment of Agents and Counsel.............................................................44
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10.7. Reliance on Documents; Counsel...............................................................44
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10.8. Agent's Reimbursement and Indemnification....................................................45
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10.9. Notice of Default............................................................................45
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10.10. Rights as a Lender...........................................................................45
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10.11. Lender Credit Decision.......................................................................45
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10.12. Successor Agent..............................................................................45
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ARTICLE XI
SETOFF; RATABLE PAYMENTS................................................................................46
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11.1. Setoff.......................................................................................46
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11.2. Ratable Payments.............................................................................46
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ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
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.......................................................................................................47
12.1. Successors and Assigns.......................................................................47
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12.2. Participations...............................................................................47
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12.2.1. Permitted Participants; Effect......................................................47
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12.2.2. Voting Rights.......................................................................47
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12.2.3. Benefit of Setoff...................................................................48
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12.3. Assignments..................................................................................48
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12.3.1. Permitted Assignments...............................................................48
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12.3.2. Effect; Effective Date..............................................................48
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12.4. Dissemination of Information.................................................................48
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12.5. Tax Treatment................................................................................49
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ARTICLE XIII
NOTICES.................................................................................................49
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13.1. Giving Notice................................................................................49
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13.2. Change of Address............................................................................49
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ARTICLE XIV
BORROWER GUARANTY.......................................................................................49
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ARTICLE XV
SUBSIDIARY GUARANTY.....................................................................................52
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ARTICLE XVI
SALE OF SUBSIDIARY BORROWER.............................................................................56
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EXHIBITS
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Exhibit A (Article 1) Note
Exhibit B (Section 6.1(c)) Compliance Certificate
Exhibit C (Section 12.3.1) Assignment Agreement
SCHEDULES
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Schedule 5.3 - Approvals and Consents
Schedule 5.8 - Material Contingent Obligations
Schedule 5.9 - Capitalization and Subsidiaries
Schedule 5.10 - ERISA
Schedule 5.16 - Material Restrictions
Schedule 6.14 - Liens
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CREDIT AGREEMENT
This Credit Agreement, dated as of November 26, 1996, is among FUND
AMERICAN ENTERPRISES HOLDINGS, INC., a Delaware corporation, FUND AMERICAN
ENTERPRISES, INC., a Delaware corporation, the Lenders and THE FIRST NATIONAL
BANK OF CHICAGO, individually and as Agent.
R E C I T A L S:
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A. The Borrowers have requested the Lenders to make financial
accommodations to them in the aggregate principal amount of $35,000,000, the
proceeds of which the Borrowers will use for the working capital and general
corporate needs of the Borrowers and their Subsidiaries; and
B. The Lenders are willing to extend such financial accommodations
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Borrowers, the
Lenders and the Agent hereby agree as follows:
ARTICLE I
DEFINITIONS
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As used in this Agreement:
"ABR Advance" means an Advance which bears interest at the Alternate
Base Rate.
"Advance" means a borrowing pursuant to Section 2.1 consisting of the
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aggregate amount of the several Loans made on the same Borrowing Date by the
Lenders to the Relevant Borrower of the same Type and, in the case of Eurodollar
Advances, for the same Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 20% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agent" means First Chicago in its capacity as agent for the Lenders
pursuant to Article X, and not in its individual capacity as a Lender, and any
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successor Agent appointed pursuant to Article X.
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"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders hereunder. The initial Aggregate Commitment is $35,000,000.
"Agreement" means this Credit Agreement, as it may be amended, modified
or restated and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time; provided, however, that if any
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changes in accounting principles from those in effect on the date of this
Agreement are adopted which result in a material change in the method of
calculation of any of the financial covenants, standards or terms in this
Agreement, the parties agree to enter into negotiations to determine whether
such provisions require amendment and, if so, the terms of such amendment so as
to equitably reflect such changes. Until a resolution thereof is reached, all
calculations made for the purposes of determining compliance with the terms of
this Agreement shall be made by application of generally accepted accounting
principles in effect on the date of this Agreement applied, to the extent
applicable, on a basis consistent with that used in the preparation of the
financial statements furnished to the Lenders pursuant to Section 5.5 hereof.
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"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (a) the Corporate Base Rate for such day, and (b) the sum
of the Federal Funds Effective Rate for such day plus 1/2% per annum, in each
case changing when and as the Corporate Base Rate and the Federal Funds
Effective Rate, as the case may be, changes.
"Applicable Credit Rating" shall mean the highest rating level assigned
by S&P or Xxxxx'x, as the case may be, to any long-term senior debt of the
Borrower which ranks on parity, as to payment and security, with the Loans and
the obligations of the Borrower under Article XIV.
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"Applicable Eurodollar Margin" means the applicable percentage set
forth below based upon the Level then in effect:
Level Margin
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Level I .175%
Level II .190%
Level III .230%
Level IV .270%
Level V .300%
Level VI .375%
Level VII .550%
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"Applicable Facility Fee Margin" means the applicable percentage set
forth below based upon the Level then in effect:
Level Margin
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Level I .050%
Level II .060%
Level III .070%
Level IV .080%
Level V .100%
Level VI .125%
Level VII .200%
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means, with respect to the Borrower or the
Subsidiary Borrower, any of the chief executive officer, president, chief
financial officer, treasurer or controller thereof, acting singly.
"Bankruptcy Code" means Xxxxx 00, Xxxxxx Xxxxxx Code, sections 1 et
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seq., as the same may be amended from time to time, and any successor thereto or
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replacement therefor which may be hereafter enacted.
"Benefit Plan" means any deferred benefit plan for the benefit of
present, future or former employees, whether or not such benefit plan is a Plan.
"Borrower" means Fund American Enterprises Holdings, Inc., a Delaware
corporation, and its successors and assigns.
"Borrowers" means, collectively, the Borrower and the Subsidiary
Borrower.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.7.
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"Business Day" means (a) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago for the conduct of substantially all
of their commercial lending activities and on which dealings in United States
dollars are carried on in the London interbank market, and (b) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago for the conduct of substantially all of their commercial lending
activities.
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"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Change" is defined in Section 3.2.
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"Change in Control" means (a) the acquisition by any "person" or
"group" (as such terms are used in Section 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended) (other than Xxxx X. Xxxxx or any Plan or any
Benefit Plan of the Borrower or any of its Subsidiaries), including without
limitation any acquisition effected by means of any transaction contemplated by
Section 6.12, of beneficial ownership (within the meaning of Rule 13d-3 of the
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Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended) of 20% or more of the outstanding shares of voting stock of the
Borrower or of the Subsidiary Borrower, or (b) during any period of 12
consecutive calendar months, commencing on the date of the Agreement, the
ceasing of those individuals (the "Continuing Directors") who (i) were directors
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of the Borrower or of the Subsidiary Borrower, as the case may be, on the first
day of each such period or (ii) subsequently became directors of the Borrower or
of the Subsidiary Borrower, as the case may be, and whose initial election or
initial nomination for election subsequent to that date was approved by a
majority of the Continuing Directors then on the board of directors of the
Borrower or of the Subsidiary Borrower, as the case may be, to constitute a
majority of the board of directors of the Borrower or of the Subsidiary
Borrower, as the case may be, or (c) during any period of 12 consecutive
calendar months, commencing on the date of this Agreement, the ceasing of
individuals who hold an office possessing the title Senior Vice President or
such title that ranks senior to a Senior Vice President (collectively, "Senior
Management") of the Borrower or of the Subsidiary Borrower, as the case may be,
on the first day of each such period to constitute a majority of the Senior
Management of the Borrower or of the Subsidiary Borrower, as the case may be;
provided, however, that (x) the provisions of this definition shall not apply to
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the Subsidiary Borrower in connection with a transaction permitted by Section
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6.12(d)(ii) and (y) clauses (b) and (c) of this definition shall not apply to
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the Subsidiary Borrower during the time the Subsidiary Borrower is a
Wholly-Owned Subsidiary of the Borrower
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to
make Loans not exceeding the amount set forth opposite its signature below and
as set forth in any Notice of Assignment relating to any assignment which has
become effective pursuant to Section 12.3.2, as such amount may be modified from
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time to time pursuant to the terms hereof.
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"Consolidated" or "consolidated", when used in connection with any
calculation, means a calculation to be determined on a consolidated basis for a
Person and its Subsidiaries in accordance with Agreement Accounting Principles.
"Consolidated Person" means, for the taxable year of reference, each
Person which is a member of the affiliated group of the Borrower if Consolidated
returns are or shall be filed for such affiliated group for federal income tax
purposes or any combined or unitary group of which the Borrower is a member for
state income tax purposes.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement or take-or-pay contract or application for a Letter of Credit,
excluding however (a) insurance policies and insurance contracts issued in the
ordinary course of business and (b) any financial guarantees issued by Financial
Security Assurance Holdings Ltd.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"Conversion/Continuation Notice" is defined in Section 2.8.
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"Corporate Base Rate" means a rate per annum equal to the corporate
base rate of interest publicly announced by First Chicago from time to time,
changing when and as said corporate base rate changes. The Corporate Base Rate
is a reference rate and does not necessarily represent the lowest or best rate
of interest actually charged to any customer. First Chicago may make commercial
loans or other loans at rates of interest at, above or below the Corporate Base
Rate.
"Default" means an event described in Article VII.
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"Environmental Laws" is defined in Section 5.18.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurodollar Advance" means an Advance which bears interest at the
Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the rate determined by the Agent to be the rate at
which deposits in U.S. dollars are offered by First Chicago to first-class banks
in the London interbank market at approximately 11 a.m. (London time) two
Business Days prior to the first day of such Interest Period, in the approximate
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amount of First Chicago's relevant Eurodollar Advance and having a maturity
approximately equal to such Interest Period.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (a) the quotient of (i) the Eurodollar Base
Rate applicable to such Interest Period, divided by (ii) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(b) the Applicable Eurodollar Margin. The Eurodollar Rate shall be rounded to
the next higher multiple of 1/100 of 1% if the rate is not such a multiple.
"Facility Fee" is defined in Section 2.4(a).
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Finance Assets" means each of the following: (a) investments in
securities issued or fully guaranteed by the United States of America or any
agency or instrumentality thereof (provided that the full faith and credit of
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the United States of America is pledged in support thereof), (b) investments in
equity securities traded on the New York Stock Exchange, the American Stock
Exchange or NASDAQ and securities convertible in to such equity securities, (c)
investments in Investment Grade Obligations, (d) investments in money market
funds substantially all the assets of which are comprised of securities of the
types described in clauses (a) through (c) above and (e) so long as put rights
with respect thereto are available to the Borrowers, investments in US West
Preferred Stock; provided, that Finance Assets shall not include any securities
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pledged to secure any obligation (contingent or otherwise).
"Finance Assets Ratio" means with respect to any Person, at any time,
the ratio of (a) Finance Assets of such Person at such time to (b) the sum of
(i) Funded Indebtedness of such Person at such time minus (ii) cash and Money
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Market Investments of such Person at such time. For purposes of this definition,
Finance Assets shall be valued, without duplication, at fair market value to the
extent there exists a readily ascertainable fair market value for such Finance
Asset or, in the event there exists no such readily ascertainable fair market
value for such Finance Asset, at book value, as calculated in accordance with
Agreement Accounting Principles.
"Financial Statements" is defined in Section 5.5.
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"First Chicago" means The First National Bank of Chicago in its
individual capacity, and its successors.
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"Fiscal Quarter" means one of the four three-month accounting periods
comprising a Fiscal Year.
"Fiscal Year" means the twelve-month accounting period ending December
31 of each year.
"FSA Transfer" means the transfer by White Mountains Holdings, Inc. to
the Borrower and/or the Subsidiary Borrower of White Mountains Holdings, Inc.'s
equity interest in Financial Security Assurance Holdings Ltd., provided that the
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aggregate dollar amount of the fair market value of the equity interests so
transferred shall not exceed $25,000,000.
"Funded Indebtedness" means Indebtedness of the type described in
clauses (a), (d), (e) and (h) of the definition "Indebtedness".
"Governmental Authority" means any government (foreign or domestic) or
any state or other political subdivision thereof or any governmental body,
agency, authority, department or commission (including without limitation any
taxing authority or political subdivision) or any instrumentality or officer
thereof (including without limitation any court or tribunal) exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and any corporation, partnership or other entity
directly or indirectly owned or controlled by or subject to the control of any
of the foregoing.
"Hazardous Materials" is defined in Section 5.18.
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"Indebtedness" of a Person means such Person's (a) obligations for
borrowed money, (b) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (c)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (d) obligations which are evidenced by notes, acceptances, or similar
instruments, (e) Capitalized Lease Obligations, (f) Rate Hedging Obligations,
(g) Contingent Obligations, (h) obligations for which such Person is obligated
pursuant to or in respect of a Letter of Credit and (i) repurchase obligations
or liabilities of such Person with respect to accounts or notes receivable sold
by such Person; provided that financial guarantees entered into in the ordinary
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course of business by Financial Security Assurance Holdings Ltd. or its
subsidiaries shall not be included within "Indebtedness" for purposes of Section
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6.19.2 (if Financial Security Assurance Holdings Ltd. shall become a
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Subsidiary).
"Insurance Subsidiaries" means Subsidiaries which are engaged in the
insurance business as an issuer or underwriter of insurance policies and/or
insurance contracts.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on (but
exclude) the day which corresponds numerically to such date one, two, three or
six months thereafter; provided, however, that if there is no such numerically
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corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest
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Period would otherwise end on a day which is not a Business Day, such Interest
Period shall end on the next succeeding Business Day; provided, however, that if
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said next succeeding Business Day falls in a new calendar month, such Interest
Period shall end on the immediately preceding Business Day.
"Investment Grade Obligations" means, as of any date, investments
having a National Association of Insurance Commissioners investment rating of 1
or 2, or a S&P rating within the range of ratings from AAA to BBB-, or a Xxxxx'x
rating within the range of ratings from Aaa to Baa3.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent,
any office, branch, subsidiary or affiliate of such Lender or the Agent.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Level" means, and includes, Xxxxx X, Xxxxx XX, Xxxxx XXX, Level IV,
Level V, Level VI or Level VII, whichever is in effect at the relevant time.
"Level I" shall exist at any time the Applicable Credit Rating of S&P
is equal to or greater than A+ or the Applicable Credit Rating of Xxxxx'x is
equal to or greater than A1.
"Level II" shall exist at any time (a) the Applicable Credit Rating of
S&P is equal to or greater than A or the Applicable Credit Rating of Xxxxx'x is
equal to or greater than A2 and (b) Level I does not exist.
"Level III" shall exist at any time (a) the Applicable Credit Rating of
S&P is equal to or greater than A- or the Applicable Credit Rating of Xxxxx'x is
equal to or greater than A3 and (b) Levels I and II do not exist.
"Level IV" shall exist at any time (a) the Applicable Credit Rating of
S&P is equal to or greater than BBB+ or the Applicable Credit Rating of Xxxxx'x
is equal to or greater than Baa1 and (b) Levels I, II and III do not exist.
"Level V" shall exist at any time (a) the Applicable Credit Rating of
S&P is equal to or greater than BBB or the Applicable Credit Rating of Xxxxx'x
is equal to or greater than Baa2 and (b) Levels I, II, III and IV do not exist.
"Level VI" shall exist at any time the Applicable Credit Rating of S&P
is BBB- and the Applicable Credit Rating of Xxxxx'x is Baa3.
-8-
"Level VII" shall exist at any time the Applicable Credit Rating of S&P
is less than BBB- or the Applicable Credit Rating of Xxxxx'x is less than Baa3
or at any time neither S&P nor Moody's assigns an Applicable Credit Rating.
"Leverage Ratio" means, at any time, the ratio of (a) the combined
Funded Indebtedness of the Borrower and the Subsidiary Borrower at such time to
(b) the sum of the combined Funded Indebtedness of the Borrower and the
Subsidiary Borrower at such time plus the Borrower's Net Worth at such time, in
all cases determined in accordance with Agreement Accounting Principles.
"Lien" means any security interest, lien (statutory or other),
mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, the interest of a
vendor or lessor under any conditional sale, Capitalized Lease or other title
retention agreement), save in respect of liabilities and obligations arising out
of the underwriting of insurance policies and contracts of insurance.
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance and "Loans" means, with respect to the Lenders, the aggregate of all
Advances.
"Loan Documents" means this Agreement, the Notes and the other
documents and agreements contemplated hereby and executed by either of the
Borrowers in favor of the Agent or any Lender.
"Margin Stock" has the meaning assigned to that term under
Regulation U.
"Material Adverse Effect" means a material adverse effect on (a) the
business, Property, condition (financial or other), performance, results of
operations, or prospects of the Borrower and its Subsidiaries taken as a whole
or of the Subsidiary Borrower and its Subsidiaries taken as a whole, (b) the
ability of either of the Borrowers or any Subsidiary to perform its obligations
under the Loan Documents, or (c) the validity or enforceability of any of the
Loan Documents or the rights or remedies of the Agent or the Lenders thereunder.
"Maturity Date" means May 25, 1998.
"Money Market Investments" means (a) direct obligations of the United
States of America, or of any agency thereof, or obligations guaranteed as to
principal and interest by the United States of America, or of any agency
thereof, in either case maturing not more than one year from the date of
acquisition thereof; (b) certificates of deposit issued by any bank or trust
company organized under the laws of the United States of America or any state
thereof and having capital, surplus and undivided profits of at least
$500,000,000, maturing not more than 90 days from the date of acquisition
thereof; (c) commercial paper rated A-1 or better or P-1 or better by S&P or
Moody's, respectively, maturing not more than 90 days from the date of
acquisition thereof; and (d) shares in an open-end management investment company
with U.S. dollar denominated investments in fixed income obligations, including
repurchase agreements, fixed time deposits and other obligations, with a dollar
weighted average maturity of not more than one year, and for the calculation of
this
-9-
dollar weighted average maturity, certain instruments which have a variable rate
of interest readjusted no less frequently than annually are deemed to have a
maturity equal to the period remaining until the next readjustment of the
interest rate.
"Moody's" means Xxxxx'x Investors Services, Inc., and any successor
thereto.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Net Worth" means, with respect to any Person, at any date the
consolidated shareholders' equity of such Person and its Consolidated
Subsidiaries determined in accordance with Agreement Accounting Principles (but
excluding the effect of Statement of Financial Accounting Standards No. 115).
"Non-Excluded Taxes" is defined in Section 2.17(a).
---------------
"Note" means a promissory note in substantially the form of Exhibit A
hereto, with appropriate insertions, duly executed and delivered to the Agent by
each of the Borrowers and payable to the order of a Lender in the amount of its
Commitment, including any amendment, modification, renewal or replacement of
such promissory note.
"Notice of Assignment" is defined in Section 12.3.2.
--------------
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Notes, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrowers to the
Lenders or to any Lender, the Agent or any indemnified party hereunder arising
under any of the Loan Documents.
"Participants" is defined in Section 12.2.1.
--------------
"Payment Date" means the last day of each March, June, September and
December.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, trust or other entity or organization, or
any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee pension benefit plan, as defined in Section
3(2) of ERISA, as to which the Borrower or any member of the Controlled Group
may have any liability.
"Proceeding" is defined in Section 5.18.
------------
-10-
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Pro-rata" means, when used with respect to a Lender, and any described
aggregate or total amount, an amount equal to such Lender's pro-rata share or
portion based on its percentage of the Aggregate Commitment or if the Aggregate
Commitment has been terminated, its percentage of the aggregate principal amount
of outstanding Advances.
"Purchasers" is defined in Section 12.3.1.
--------------
"Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (b) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to depositary institutions.
"Regulation G" means Regulation G of the Board of Governors of the
Federal Reserve System as from time to time in effect and shall include any
successor or other regulation or official interpretation of said Board of
Governors relating to the extension of credit by Persons other than banks,
brokers and dealers for the purpose of purchasing or carrying margin stocks
applicable to such Persons.
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and shall include any
successor or other regulation or official interpretation of such Board of
Governors relating to the extension of credit by securities brokers and dealers
for the purpose of purchasing or carrying margin stocks applicable to such
Persons.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to such Persons.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and shall include any
successor or other regulation or official
-11-
interpretation of said Board of Governors relating to the extension of credit by
the specified lenders for the purpose of purchasing or carrying margin stocks
applicable to such Persons.
"Release" is defined in the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. 39601 et seq.
-- ---
"Relevant Borrower" means, with respect to any outstanding or requested
Loan or Advance, whichever of the Borrowers is the existing or proposed primary
obligor in respect of such Loan or Advance.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event; provided, that a failure to meet the minimum
--------
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.
"Required Lenders" means Lenders in the aggregate having at least
66-2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 66-2/3% of the aggregate
unpaid principal amount of the outstanding Loans.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Revolver Termination Date" means November 25, 1997.
"Risk-Based Capital Guidelines" is defined in Section 3.2.
-----------
"S&P" means Standard & Poor's Ratings Group, and any successor thereto.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Significant Subsidiary" shall mean and include, at any time, the
Subsidiary Borrower and each other Subsidiary of the Borrower to the extent that
the Net Worth of such Subsidiary is equal to or greater than $5,000,000.
"Single Employer Plan" means a Plan subject to Title IV of ERISA
maintained by the Borrower or any member of the Controlled Group for employees
of the Borrower or any member of the Controlled Group, other than a
Multiemployer Plan.
-12-
"Solvent" means, when used with respect to a Person, that (a) the fair
saleable value of the assets of such Person is in excess of the total amount of
the present value of its liabilities (including for purposes of this definition
all liabilities (including loss reserves as determined by such Person), whether
or not reflected on a balance sheet prepared in accordance with Agreement
Accounting Principles and whether direct or indirect, fixed or contingent,
secured or unsecured, disputed or undisputed), (b) such Person is able to pay
its debts or obligations in the ordinary course as they mature and (c) such
Person does not have unreasonably small capital to carry out its business as
conducted and as proposed to be conducted. "Solvency" shall have a correlative
meaning.
"Stock Transfers" means, collectively, (a) any repurchase by the
Borrower of its capital stock and (b) any extraordinary dividend or distribution
declared and paid or made by the Borrower to the holders of its capital stock,
including, without limitation, any distribution by the Borrower of the shares of
capital stock of any of its Subsidiaries.
"Subsidiary" of a Person means (a) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(b) any partnership, association, joint venture, limited liability company or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Subsidiary Borrower" means Fund American Enterprises, Inc., a Delaware
corporation.
"Subsidiary Guarantor" means the Subsidiary Borrower in its capacity as
a guarantor pursuant to Article XV.
----------
"Termination Event" means, with respect to a Plan which is subject to
Title IV of ERISA, (a) a Reportable Event, (b) the withdrawal of the Borrower or
any other member of the Controlled Group from such Plan during a plan year in
which the Borrower or any other member of the Controlled Group was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA or was deemed
such under Section 4068(f) of ERISA, (c) the termination of such Plan, the
filing of a notice of intent to terminate such Plan or the treatment of an
amendment of such Plan as a termination under Section 4041 of ERISA, (d) the
institution by the PBGC of proceedings to terminate such Plan or (e) any event
or condition which might constitute grounds under Section 4042 of ERISA for the
termination of, or appointment of a trustee to administer, such Plan.
"Transferee" is defined in Section 12.4.
------------
"Type" means, with respect to any Advance, its nature as an ABR Advance
or Eurodollar Advance.
"Unfunded Liability" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under a Single Employer Plan
exceeds the fair market value of assets
-13-
allocable to such benefits, all determined as of the then most recent valuation
date for such Plans using PBGC actuarial assumptions for single employer plan
terminations.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"US West Preferred Stock" means the US West Series B cumulative
redeemable preferred stock $1.00 par value per share purchased by the Borrower
pursuant to and subject to the terms of the Securities Purchase Agreement dated
April 10, 1994 among the Borrower, US West, Inc., US West Capital Corporation
and Financial Security Assurance Holdings Ltd. (as such agreement may be amended
from time to time).
"Valley Credit Agreement" means the Credit Agreement, dated as of
November 26, 1996, among Valley Group, Inc., the financial institutions from
time to time party thereto and First Chicago, as agent, as the same may be
amended, supplemented or otherwise modified from time to time.
"White Mountains Credit Agreement" means the Credit Agreement, dated as
of November 26, 1996, among White Mountains Holdings, Inc., the financial
institutions from time to time party thereto and First Chicago, as agent, as the
same may be amended, supplemented or other wise modified from time to time.
"Wholly-Owned Subsidiary" of a Person means (a) any Subsidiary all of
the outstanding voting securities of which (other than directors' qualifying or
similar shares) shall at the time be owned or controlled, directly or
indirectly, by such Person or one or more Wholly-Owned Subsidiaries of such
Person, or by such Person and one or more Wholly-Owned Subsidiaries of such
Person, or (b) any partnership, association, joint venture, limited liability
company or similar business organization 100% of the ownership interests having
ordinary voting power of which (other than directors' qualifying shares) shall
at the time be so owned or controlled.
The foregoing definitions (other than the definitions of "Borrower" and
"Borrowers") shall be equally applicable to both the singular and plural forms
of the defined terms.
ARTICLE II
THE CREDITS
-----------
2.1. Advances. (a) From and including the date hereof to but
--------
excluding the Revolver Termination Date, each Lender severally (and not jointly)
agrees, on the terms and conditions set forth in this Agreement, to make
Advances to the Borrowers from time to time in amounts not to exceed in the
aggregate at any one time outstanding the amount of its pro-rata share of the
Aggregate Commitment existing at such time. Subject to the terms of this
Agreement, the Borrowers may borrow, repay and reborrow Advances at any time
prior to the Revolver Termination Date. The
-14-
Commitments to lend hereunder shall expire on the Revolver Termination Date.
Principal payments made after the Revolver Termination Date may not be
reborrowed.
(b) The Borrowers hereby agree that if at any time, prior to
the Revolver Termination Date, as a result of reductions in the Aggregate
Commitment pursuant to Section 2.4 or otherwise, the aggregate balance of the
-----------
Loans exceeds the Aggregate Commitment, they shall repay, or cause to be repaid,
immediately outstanding Loans in such amount as may be necessary to eliminate
such excess.
(c) The Borrowers' obligation to pay the principal of, and
interest on, the Loans shall be evidenced by the Notes. Although the Notes shall
be dated the date of this Agreement, interest in respect thereof shall be
payable only for the periods during which the Loans evidenced thereby are
outstanding and, although the stated amount of each Note shall be equal to the
applicable Lender's Commitment, each Note shall be enforceable, with respect to
the Relevant Borrower's obligation to pay the principal amount thereof, only to
the extent of the unpaid principal amount of the Loans at the time evidenced
thereby.
(d) All Advances and all Loans shall mature, and the principal
amount thereof and the unpaid accrued interest thereon shall be due and payable
in full, on the Maturity Date.
2.2. Ratable Loans. Each Advance hereunder shall consist of Loans
-------------
made from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment.
2.3. Types of Advances. The Advances may be ABR Advances or
-----------------
Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.7 and 2.8.
------------ ---
2.4. Facility Fee; Reductions in Aggregate Commitment. (a) The
------------------------------------------------
Borrower agrees to pay to the Agent for the account of each Lender a facility
fee ("Facility Fee") in an amount equal to the Applicable Facility Fee Margin
per annum times the daily average Commitment (or, on and after the Revolver
Termination Date, times the aggregate outstanding principal amount of the Loans)
of such Lender from the date hereof to and including the Maturity Date, payable
on each Payment Date hereafter and on the Maturity Date. All accrued Facility
Fees shall be payable on the effective date of any termination of the
obligations of the Lenders to make Loans hereunder.
(b) The Borrower may permanently reduce the Aggregate
Commitment in whole, or in part ratably among the Lenders in a minimum aggregate
amount of $2,000,000, upon at least three (3) Business Days' written notice to
the Agent, which notice shall specify the amount of any such reduction;
provided, however, that the amount of the Aggregate Commitment may not be
-------- -------
reduced below the aggregate principal amount of the outstanding Advances.
2.5. Minimum Amount of Each Advance. Each Advance shall be in the
------------------------------
minimum amount of $2,000,000 (and in integral multiples of $500,000 if in excess
thereof), provided, however, that (a) any ABR Advance may be in the amount of
-------- -------
the unused Aggregate Commitment
-15-
and (b) in no event shall more than six (6) Eurodollar Advances be permitted to
be outstanding at any time.
2.6. Optional Principal Payments. The Borrowers may from time to time
---------------------------
pay, without penalty or premium, all outstanding ABR Advances, or, in a minimum
aggregate amount of $2,000,000, any portion of the outstanding ABR Advances,
upon two Business Days' prior notice to the Agent. Subject to Section 3.4 and
-----------
upon like notice, a Eurodollar Advance may be paid prior to the last day of the
applicable Interest Period in a minimum amount of $2,000,000 or an integral
multiple of $500,000 in excess thereof.
2.7. Method of Selecting Types and Interest Periods for New Advances.
---------------------------------------------------------------
The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable to each Advance from time to
time; provided, however, that in the event Loans are incurred on the date of
-------- -------
this Agreement, all Loans incurred on such date shall be ABR Advances. The
Borrower shall give the Agent irrevocable notice (a "Borrowing Notice") not
----------------
later than 10:00 a.m. (Chicago time) on the Borrowing Date of each ABR Advance
and at least three (3) Business Days before the Borrowing Date for each
Eurodollar Advance, specifying:
(a) the Borrowing Date of such Advance, which shall be a
Business Day;
(b) the Relevant Borrower which is to receive such Advance;
(c) the aggregate amount of such Advance;
(d) the Type of Advance selected;
(e) in the case of each Eurodollar Advance, the Interest Period
applicable thereto, which shall end on or prior to the Maturity
Date; and
(f) any changes to money transfer instructions previously
delivered to the Agent.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Loan or Loans, in funds immediately available in Chicago, to
the Agent at its address specified pursuant to Article XIII. The Agent will make
------------
the funds so received from the Lenders available to the Borrower at the Agent's
aforesaid address or at such account at such other institution in the United
States of America as the Borrower may indicate in the Borrowing Notice.
2.8. Conversion and Continuation of Outstanding Advances. ABR Advances
---------------------------------------------------
shall continue as ABR Advances unless and until such ABR Advances are converted
into Eurodollar Advances. Each Eurodollar Advance shall continue as a Eurodollar
Advance until the end of the then applicable Interest Period therefor, at which
time such Eurodollar Advance shall be automatically converted into an ABR
Advance unless the Borrower shall have given the Agent a Conversion/Continuation
Notice requesting that, at the end of such Interest Period, such Eurodollar
Advance continue as a Eurodollar Advance for the same or another Interest
Period. Subject to the terms of Section 2.5, the Borrower may elect from time to
-----------
time to convert all or any part of an
-16-
Advance of any Type into any other Type or Types of Advances; provided, however,
-------- -------
that any conversion of any Eurodollar Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto. The Borrower shall give the
Agent irrevocable notice (a "Conversion/ Continuation Notice") of each
-------------------------------
conversion of an ABR Advance or continuation of a Eurodollar Advance not later
than 10:00 a.m. (Chicago time) on the conversion date, in the case of a
conversion into an ABR Advance, or at least three (3) Business Days, in the case
of a conversion into or continuation of a Eurodollar Advance, prior to the date
of the requested conversion or continuation, specifying:
(a) the requested date of such conversion or
continuation, which shall be a Business Day;
(b) the Relevant Borrower with respect to such Advance;
(c) the aggregate amount and Type of the Advance which is
to be converted or continued; and
(d) the amount and Type(s) of Advance(s) into which such
Advance is to be converted or continued and, in the case of
a conversion into or continuation of a Eurodollar Advance,
the duration of the Interest Period applicable thereto,
which shall end on or prior to the Maturity Date.
2.9. Changes in Interest Rate, etc. Each ABR Advance shall bear
-----------------------------
interest at the Alternate Base Rate from and including the date of such Advance
or the date on which such Advance was converted into an ABR Advance to (but not
including) the date on which such ABR Advance is paid or converted to a
Eurodollar Advance. Changes in the rate of interest on that portion of any
Advance maintained as an ABR Advance will take effect simultaneously with each
change in the Alternate Base Rate. Each Eurodollar Advance shall bear interest
from and including the first day of the Interest Period applicable thereto to,
but not including, the last day of such Interest Period at the Eurodollar Rate
determined as applicable to such Eurodollar Advance plus the Applicable
Eurodollar Margin. Changes in the Applicable Eurodollar Margin will take effect
simultaneously with each change in a Level. No Interest Period may end after the
Revolver Termination Date.
2.10. Rates Applicable After Default. Notwithstanding anything to the
------------------------------
contrary contained in Section 2.7 or 2.8, no Advance may be made as, converted
----------- ---
into or continued as a Eurodollar Advance (except with the consent of the Agent
and the Required Lenders) when any Default or Unmatured Default has occurred and
is continuing. During the continuance of a Default the Required Lenders may, at
their option, by notice to the Borrower (which notice may be revoked at the
option of the Required Lenders notwithstanding any provision of Section 8.2
-----------
requiring unanimous consent of the Lenders to changes in interest rates),
declare that each Eurodollar Advance and ABR Advance shall bear interest (for
the remainder of the applicable Interest Period in the case of Eurodollar
Advances) at a rate per annum equal to the rate otherwise applicable plus two
percent (2%) per annum; provided, however, that such increased rate shall
automatically and without action
-17-
of any kind by the Lenders become and remain applicable until revoked by the
Required Lenders in the event of a Default described in Section 7.6 or 7.7.
2.11. Method of Payment. All payments of the Obligations hereunder
-----------------
shall be made, without setoff, deduction or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
------------
writing by the Agent to the Borrower (at least two Business Days in advance), by
noon (Chicago time) on the date when due and shall be applied ratably by the
Agent among the Lenders. Each payment delivered to the Agent for the account of
any Lender shall be delivered promptly by the Agent to such Lender in the same
type of funds that the Agent received at its address specified pursuant to
Article XIII or at any Lending Installation specified in a notice received by
------------
the Agent from such Lender. The Agent is hereby authorized to charge the account
of the Borrower maintained with the Agent for each payment of principal,
interest and fees as it becomes due hereunder.
2.12. Notes. Each Lender is hereby authorized to record the principal
-----
amount of each of its Loans and each repayment on the schedule attached to its
Note; provided, however, that neither the failure to so record nor any error in
such recordation shall affect the Relevant Borrower's obligations under such
Note.
2.13. Interest Payment Dates; Interest and Fee Basis. Interest accrued
----------------------------------------------
on each ABR Advance shall be payable on each Payment Date, commencing with the
first such date to occur after the date hereof, on any date on which an ABR
Advance is prepaid, whether due to acceleration or otherwise, and at maturity.
Interest accrued on that portion of the outstanding principal amount of any ABR
Advance converted into a Eurodollar Advance on a day other than a Payment Date
shall be payable on the date of conversion. Interest accrued on each Eurodollar
Advance shall be payable on the last day of its applicable Interest Period, on
any date on which the Eurodollar Advance is prepaid, whether by acceleration or
otherwise, and at maturity. Interest accrued on each Eurodollar Advance having
an Interest Period longer than three months shall also be payable on the last
day of each three-month interval during such Interest Period. Interest and
commitment fees shall be calculated for actual days elapsed on the basis of a
360-day year. Interest shall be payable for the day an Advance is made but not
for the day of any payment on the amount paid if payment is received prior to
noon (Chicago time) at the place of payment. If any payment of principal of or
interest on an Advance shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day and, in the case
of a principal payment, such extension of time shall be included in computing
interest in connection with such payment.
2.14. Notification of Advances, Interest Rates, Prepayments and
---------------------------------------------------------
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
---------------------
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. The Agent will notify each Lender of the interest rate
applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.
-18-
2.15. Lending Installations. Each Lender may book its Loans at any
---------------------
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or telex
notice to the Agent and the Borrower, designate a Lending Installation through
which Loans will be made by it and for whose account Loan payments are to be
made.
2.16. Non-Receipt of Funds by the Agent. Unless the Borrowers or a
---------------------------------
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (a) in the case of a Lender, the
proceeds of a Loan, or (b) in the case of the Borrowers, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
the Borrowers have not in fact made such payment to the Agent, the Lenders
shall, on demand by the Agent, repay to the Agent the amount so made available
together with interest thereon in respect of each day during the period
commencing on the date such amount was so made available by the Agent until the
date the Agent recovers such amount at a rate per annum equal to the Federal
Funds Effective Rate for such day. If any Lender has not in fact made such
payment to the Agent, such Lender or the Borrowers shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (a) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day, or (b) in the case of payment by the
Borrowers, the interest rate applicable to the relevant Loan.
2.17. Taxes. (a) Any payments made by the Borrowers under this
-----
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes or any other tax based
upon any income imposed on the Agent or any Lender by the jurisdiction in which
the Agent or such Lender is incorporated or has its principal place of business
or maintains its Lending Installation. If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings ("Non-Excluded
Taxes") are required to be withheld from any amounts payable to the Agent or any
Lender hereunder, the amounts so payable to the Agent or such Lender shall be
increased to the extent necessary to yield to the Agent or such Lender (after
payment of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in or pursuant to this
Agreement; provided, however, that the Borrowers shall not be required to
increase any such amounts payable to any Lender that is not organized under the
laws of the U.S. or a state thereof if such Lender fails to comply with the
requirements of paragraph (b) of this Section 2.17. Whenever any Non-Excluded
Taxes are payable by the Borrowers, as promptly as practicable thereafter the
Borrowers shall send to the Agent for its own account or for the account of such
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrowers fails to pay
any Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Agent the required receipts or other required
-19-
documentary evidence, the Borrowers shall indemnify the Agent and the Lenders
for any incremental taxes, interest or penalties that may become payable by any
Agent or any Lender as a result of any such failure. The agreements in this
Section 2.17 shall survive the termination of this Agreement and the payment of
------------
all other amounts payable hereunder.
(b) At least five Business Days prior to the first date on
which interest or fees are payable hereunder for the account of any Lender, each
Lender that is not incorporated under the laws of the United States of America,
or a state thereof, agrees that it will deliver to each of the Borrowers and the
Agent two duly completed and properly executed copies of United States Internal
Revenue Service Form 1001 or 4224 (or a successor form), certifying in either
case that such Lender is entitled to receive payments under this Agreement and
the Notes without deduction or withholding of any United States federal income
taxes. Each Lender which so delivers a Form 1001 or 4224 (or a successor form)
further undertakes to deliver to each of the Borrower and the Agent two
additional duly completed and properly executed copies of such form (or a
successor form) on or before the date that such form expires (currently, three
successive calendar years for Form 1001 and each tax 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, and such amendments thereto or extensions
or renewals thereof as may be reasonably requested by the Borrowers or the
Agent, in each case certifying that such Lender is entitled to receive payments
under this Agreement and the Notes without deduction or withholding of any
United States federal income taxes, 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 renders all
such forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form with respect to it and such Lender advises the
Borrowers and the Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax.
2.18. Agent's Fees. The Borrowers shall pay to the Agent those
------------
fees, in addition to the Facility Fees referenced in Section 2.4(a), in the
--------------
amounts and at the times separately agreed to between the Agent and the
Borrowers.
ARTICLE III
CHANGE IN CIRCUMSTANCES
-----------------------
3.1. Yield Protection. If, after the date hereof, the adoption
----------------
of or any change in any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law), or any new interpretation thereof, or the compliance of any Lender with
such adoption, change or interpretation.
(a) subjects any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding on or
from payments due from either of the Borrowers (excluding
taxation of the overall net income of any Lender or
applicable Lending Installation imposed by the jurisdiction
in which such Lender or Lending
-20-
Installation is incorporated or has its principal place of
business), or changes the basis of taxation of principal,
interest or any other payments to any Lender or Lending
Installation in respect of its Loans or other amounts due it
hereunder, or
(b) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest
rate applicable to Eurodollar Advances), or
(c) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending
Installation of making, funding or maintaining Loans or
reduces any amount receivable by any Lender or any
applicable Lending Installation in connection with any
Loans, or requires any Lender or any applicable Lending
Installation to make any payment calculated by reference to
the amount of Loans held, or interest received by it, by an
amount deemed material by such Lender,
then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or resulting in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Loans and its Commitment.
3.2. Changes in Capital Adequacy Regulations. If a Lender determines
---------------------------------------
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 15 days of demand by such
Lender, the Borrower shall pay such Lender the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Lender determines is attributable to this Agreement, its Loans or its
obligation to make Loans hereunder (after taking into account such Lender's
policies as to capital adequacy). "Change" means (a) any change after the date
------
of this Agreement in the Risk-Based Capital Guidelines, or (b) any adoption of
or change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the force
of law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or any Lending Installation
or any corporation controlling any Lender. "Risk-Based Capital Guidelines" means
-----------------------------
(a) the risk-based capital guidelines in effect in the United States on the date
of this Agreement and (b) the corresponding capital regulations promulgated by
regulatory authorities outside the United States implementing the July 1988
report of the Basle Committee on Banking Regulation and Supervisory Practices
entitled "International Convergence of Capital Measurements and Capital
Standards" and any amendments to such regulations adopted prior to the date of
this Agreement.
3.3. Availability of Types of Advances. If any Lender determines that
---------------------------------
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (a) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
-21-
available, or (b) the interest rate applicable to a Eurodollar Advance does not
accurately or fairly reflect the cost of making or maintaining such Advance,
then the Agent shall suspend the availability of Eurodollar Advances until such
circumstance no longer exists and require any Eurodollar Advances to be repaid.
3.4. Funding Indemnification. If any payment of a Eurodollar Advance
-----------------------
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made on the date specified by the Relevant Borrower for any
reason other than default by the Lenders, the Borrower will indemnify the Agent
and each Lender for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain the Eurodollar Advance.
3.5. Lender Statements; Survival of Indemnity. To the extent reasonably
----------------------------------------
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Advances to reduce any liability of the Borrower to
such Lender under Sections 2.17, 3.1 and 3.2 or to avoid the unavailability of a
------------- --- ---
Type of Advance under Section 3.3, so long as such designation is not
-----------
disadvantageous to such Lender. Each Lender shall deliver a written statement of
such Lender to the Borrower (with a copy to the Agent) as to the amount due, if
any, under Section 3.1, 3.2 or 3.4. Such written statement shall set forth in
------------ --- ----
reasonable detail the calculations upon which such Lender determined such amount
and shall be final, conclusive and binding on the Borrower in the absence of
manifest error. Determination of amounts payable under such Sections in
connection with a Eurodollar Advance shall be calculated as though each Lender
funded its Eurodollar Advances through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the
Eurodollar Rate applicable to such Loan, whether in fact that is the case or
not. Unless otherwise provided herein, the amount specified in the written
statement of any Lender shall be payable on demand after receipt by the Borrower
of the written statement. The obligations of the Borrower under Sections 3.1,
------------
3.2 and 3.4 shall survive payment of the Obligations and termination of this
--- ---
Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
4.1. Initial Loans. The Lenders shall not be required to make
-------------
the initial Advance hereunder unless the Borrower has furnished the following to
the Agent with sufficient copies for the Lenders and the other conditions set
forth below have been satisfied:
(a) Charter Documents; Good Standing Certificates. Copies of
the certificate of incorporation of the Borrower and the Subsidiary
Borrower, together with all amendments thereto, both certified by the
appropriate governmental officer in their respective jurisdictions of
incorporation, together with a good standing certificate issued by the
-22-
Secretary of State of their respective jurisdictions of incorporation
and such other jurisdictions as shall be reasonably requested by the
Agent.
(b) By-Laws and Resolutions. Copies, certified by the
-----------------------
Secretary or Assistant Secretary of the Borrower and the Subsidiary
Borrower, of their respective by-laws and of their respective Board of
Directors' resolutions authorizing the execution, delivery and
performance of the Loan Documents to which the Borrower and the
Subsidiary Borrower are a party.
(c) Secretary's Certificate. An incumbency certificate,
-----------------------
executed by the Secretary or Assistant Secretary of each of the
Borrower and the Subsidiary Borrower, which shall identify by name and
title and bear the signature of the officers of the Borrower and the
Subsidiary Borrower authorized to sign the Loan Documents and to make
borrowings hereunder, upon which certificate the Agent and the Lenders
shall be entitled to rely until informed of any change in writing by
the Borrower and the Subsidiary Borrower.
(d) Officer's Certificate. A certificate signed by an
---------------------
Authorized Officer of the Borrower and the Subsidiary Borrower, in form
and substance satisfactory to the Agent, to the effect that on the
initial Borrowing Date (both before and after giving effect to the
consummation of the other transactions contemplated hereby and the
making of the Loans hereunder): (i) no Default or Unmatured Default has
occurred and is continuing; (ii) no injunction or temporary restraining
order which would prohibit the making of the Loans or other litigation
which could reasonably be expected to have a Material Adverse Effect is
pending or, to the best of such Person's knowledge, threatened; (iii)
all orders, consents, approvals, licenses, authorizations, or
validations of, or filings, recordings or registrations with, or
exemptions by, any Governmental Authority required in connection with
the execution, delivery and performance of this Agreement have been or,
prior to the time required, will have been, obtained, given, filed or
taken and are or will be in full force and effect (or the Borrowers
have obtained effective judicial relief with respect to the application
thereof) and all applicable waiting periods have expired; (iv) each of
the representations and warranties set forth in Article V of this
Agreement is true and correct on and as of the initial Borrowing Date;
and (v) since December 31, 1995, no event or change has occurred that
has caused or evidences a Material Adverse Effect.
(e) Legal Opinion. (i) A written opinion of Xxxxxxx,
-------------
Phleger & Xxxxxxxx LLP, counsel to the Borrowers, addressed to the
Agent and the Lenders in form and substance acceptable to the Agent and
its counsel.
(f) Notes. Notes payable to the order of each of the
-----
Lenders duly executed by each of the Borrowers.
(g) Loan Documents. Executed originals of this Agreement
--------------
and each of the Loan Documents, which shall be in full force and
effect, together with all schedules, exhibits, certificates,
instruments, opinions, documents and financial statements required to
be delivered pursuant hereto and thereto.
-23-
(h) Letters of Direction. Written money transfer
--------------------
instructions with respect to the initial Advances and to future
Advances in form and substance acceptable to the Agent and its counsel
addressed to the Agent and signed by an Authorized Officer, together
with such other related money transfer authorizations as the Agent may
have reasonably requested.
(i) Solvency Certificate. A written solvency certificate
--------------------
from the chief financial officer of the Borrower and the Subsidiary
Borrower in form and content satisfactory to the Agent with respect to
the value, Solvency and other factual information of, or relating to,
as the case may be, the Borrower, on a consolidated basis, and of the
Subsidiary Borrower, on a consolidated basis.
(j) Other. Such other documents as the Agent, any Lender
-----
or their counsel may have reasonably requested.
4.2. Each Future Advance. The Lenders shall not be required to
-------------------
make any Advance unless on the applicable Borrowing Date:
(a) There exists no Default or Unmatured Default and none
would result from such Advance;
(b) The representations and warranties contained in
Article V are true and correct as of such Borrowing Date;
---------
(c) A Borrowing Notice shall have been properly
submitted; and
(d) All legal matters incident to the making of such
Advance shall be satisfactory to the Lenders and their counsel.
Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by the Borrowers that the conditions
contained in Section 4.2 (a), (b) and (c) have been satisfied. Any Lender may
-----------
require a duly completed compliance certificate in substantially the form of
Exhibit B hereto as a condition to making an Advance.
---------
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrowers represent and warrant to the Lenders that:
5.1. Corporate Existence and Standing. Each of the Borrower and
--------------------------------
each Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation and is
duly qualified and in good standing as a foreign corporation and is duly
authorized to conduct its business in each jurisdiction in which its business
-24-
is conducted or proposed to be conducted, except where the failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect. As
of the date of this Agreement, the Subsidiary Borrower is a Wholly-Owned
Subsidiary of the Borrower.
5.2. Authorization and Validity. Each of the Borrowers has all
--------------------------
requisite power and authority (corporate and otherwise) and legal right to
execute and deliver each of the Loan Documents to which it is a party and to
perform its obligations thereunder. The execution and delivery by each of the
Borrower of the Loan Documents to which it is a party and the performance of
their respective obligations thereunder have been duly authorized by proper
corporate proceedings and the Loan Documents constitute legal, valid and binding
obligations of the Borrowers, as applicable, enforceable against the Borrowers,
as applicable, in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
5.3. Compliance with Laws and Contracts. The Borrower and its
----------------------------------
Subsidiaries have complied in all material respects with all applicable
statutes, rules, regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof, having jurisdiction over
the conduct of their respective businesses or the ownership of their respective
properties, except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect. Neither the execution and delivery
by the Borrowers of the Loan Documents to which it is a party, the application
of the proceeds of the Loans or the consummation of the transactions
contemplated in the Loan Documents, nor compliance with the provisions of the
Loan Documents will, or at the relevant time did, (a) violate any law, rule,
regulation (including Regulations G, T, U and X), order, writ, judgment,
injunction, decree or award binding on the Borrower or any Subsidiary or the
Borrower's or any Subsidiary's charter, articles or certificate of incorporation
or by-laws, (b) violate the provisions of or require the approval or consent of
any party to any indenture, instrument or agreement to which the Borrower or any
Subsidiary is a party or is subject, or by which it, or its property, is bound,
or conflict with or constitute a default thereunder, or result in the creation
or imposition of any Lien (other than Liens permitted by, the Loan Documents)
in, of or on the property of the Borrower or any Subsidiary pursuant to the
terms of any such indenture, instrument or agreement, or (c) require any consent
of the stockholders of any Person, except for approvals or consents which will
be obtained on or before the initial Advance and are disclosed on Schedule 5.3,
------------
except for any violation of, or failure to obtain an approval or consent
required under, any such indenture, instrument or agreement that could not
reasonably be expected to have a Material Adverse Effect.
5.4. Governmental Consents. No order, consent, approval, qualification,
---------------------
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, or other action in respect of, any court, governmental or
public body or authority, or any subdivision thereof, any securities exchange or
other Person is or at the relevant time was required to authorize, or is or at
the relevant time was required in connection with the execution, delivery,
consummation or performance of, or the legality, validity, binding effect or
enforceability of, any of the Loan Documents. Neither the Borrower nor any
Subsidiary is in default under or in violation of any foreign, federal, state or
local law, rule, regulation, order, writ, judgment, injunction, decree or
-25-
award binding upon or applicable to the Borrower or such Subsidiary, in each
case the consequences of which default or violation could reasonably be expected
to have a Material Adverse Effect.
5.5. Financial Statements. The Borrower has heretofore furnished to
--------------------
each of the Lenders (a) the December 31, 1995 audited consolidated financial
statements of the Borrower and its Subsidiaries, and (b) the unaudited
consolidated financial statements of the Borrower and its Subsidiaries through
June 30, 1996 (collectively, the "Financial Statements"). Each of the Financial
--------------------
Statements was prepared in accordance with Agreement Accounting Principles and
fairly presents the consolidated financial condition and operations of the
Borrower and its Subsidiaries at such dates and the consolidated results of
their operations for the respective periods then ended (except, in the case of
such unaudited statements, for normal year-end audit adjustments).
5.6. Material Adverse Change. No material adverse change in the
-----------------------
business, Property, condition (financial or otherwise), performance, prospects
or results of operations of the Borrower and its Subsidiaries or of the
Subsidiary Borrower and its Subsidiaries has occurred since December 31, 1995.
5.7. Taxes. The Borrower and its Subsidiaries have filed or caused to
-----
be filed on a timely basis and in correct form all United States federal and
applicable foreign, state and local tax returns and all other tax returns which
are required to be filed and have paid all taxes due pursuant to said returns or
pursuant to any assessment received by the Borrower or any Subsidiary, except
such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided in accordance with Agreement Accounting
Principles and as to which no Lien exists. As of the date hereof, the United
States income tax returns of the Borrower on a consolidated basis have been
audited by the Internal Revenue Service through its fiscal period ending October
23, 1985, and all tax periods beginning on or after October 24, 1985 are
currently being audited. No tax liens have been filed and no claims are being
asserted with respect to any such taxes which could reasonably be expected to
have a Material Adverse Effect. The charges, accruals and reserves on the books
of the Borrower and its Subsidiaries in respect of any taxes or other
governmental charges are in accordance with Agreement Accounting Principles.
5.8. Litigation and Contingent Obligations. There is no litigation,
-------------------------------------
arbitration, proceeding, inquiry or governmental investigation pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any Subsidiary or any of their respective properties which could
reasonably be expected to have a Material Adverse Effect or to prevent, enjoin
or unduly delay the making of the Loans under this Agreement. Neither the
Borrower nor any Subsidiary has any material contingent obligations incurred
outside of the ordinary course of its business except as set forth on Schedule
5.8 or disclosed in the financial statements required to be delivered under
Sections 6.1(a) and (b) and as permitted under this Agreement.
5.9. Capitalization. Schedule 5.9 hereto contains (a) an accurate
--------------
description of the Borrower's capitalization as of September 30, 1996 and (b) an
accurate list of all of the existing Subsidiaries as of the date of this
Agreement, setting forth their respective jurisdictions of incorporation and the
percentage of their capital stock owned by the Borrower or other Subsidiaries.
All of the issued and outstanding shares of capital stock of the Borrower and of
each Subsidiary have
-26-
been duly authorized and validly issued, are fully paid and non-assessable, and
are free and clear of all Liens.
5.10. ERISA. Except as disclosed on Schedule 5.10, neither the Borrower
----- -------------
nor any other member of the Controlled Group maintains any Single Employer
Plans, and no Single Employer Plan has any Unfunded Liability. Neither the
Borrower nor any other member of the Controlled Group maintains, or is obligated
to contribute to, any Multiemployer Plan or has incurred, or is reasonably
expected to incur, any withdrawal liability to any Multiemployer Plan. Each Plan
complies in all material respects with all applicable requirements of law and
regulations other than any such failure to comply which could not reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor any member
of the Controlled Group has, with respect to any Plan, failed to make any
contribution or pay any amount required under Section 412 of the Code or Section
302 of ERISA or the terms of such Plan. There are no pending or, to the
knowledge of the Borrower, threatened claims, actions, investigations or
lawsuits against any Plan, any fiduciary thereof, or the Borrower or any member
of the Controlled Group with respect to a Plan. Neither the Borrower nor any
member of the Controlled Group has engaged in any prohibited transaction (as
defined in Section 4975 of the Code or Section 406 of ERISA) in connection with
any Plan which would subject such Person to any material liability. Within the
last five years neither the Borrower nor any member of the Controlled Group has
engaged in a transaction which resulted in a Single Employer Plan with an
Unfunded Liability being transferred out of the Controlled Group which could
reasonably be expected to have a Material Adverse Effect. No Termination Event
has occurred or is reasonably expected to occur with respect to any Plan which
is subject to Title IV of ERISA which could reasonably be expected to have a
Material Adverse Effect.
5.11. Defaults. No Default or Unmatured Default has occurred and is
--------
continuing.
5.12. Federal Reserve Regulations. Neither the Borrower nor any
---------------------------
Subsidiary is engaged, directly or indirectly, principally, or as one of its
important activities, in the business of extending, or arranging for the
extension of, credit for the purpose of purchasing or carrying Margin Stock. No
part of the proceeds of any Loan will be used in a manner which would violate,
or result in a violation of, Regulation G, Regulation T, Regulation U or
Regulation X. Neither the making of any Advance hereunder nor the use of the
proceeds thereof will violate or be inconsistent with the provisions of
Regulation G, Regulation T, Regulation U or Regulation X.
5.13. Investment Company. Neither the Borrower nor any Subsidiary is,
------------------
or after giving effect to any Advance will be, an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
5.14. Certain Fees. No broker's or finder's fee or commission was, is
------------
or will be payable by the Borrower or any Subsidiary with respect to any of the
transactions contemplated by this Agreement, except as described in Section 9.5.
-----------
The Borrowers hereby jointly and severally agree to indemnify the Agent and the
Lenders against, and agree that they will hold each of them harmless from, any
claim, demand or liability for broker's or finder's fees or commissions alleged
to have been incurred by the Borrowers in connection with any of the
transactions contemplated by this Agreement and any expenses (including, without
limitation, attorneys' fees and time charges of
-27-
attorneys for the Agent or any Lender, which attorneys may be employees of the
Agent or any Lender) arising in connection with any such claim, demand or
liability. No other similar fee or commissions will be payable by the Borrower
or any Subsidiary for any other services rendered to the Borrower or any
Subsidiary ancillary to any of the transactions contemplated by this Agreement.
5.15. Solvency. As of the date hereof, after giving effect to the
--------
consummation of the transactions contemplated by the Loan Documents and the
payment of all fees, costs and expenses payable by the Borrower or its
Subsidiaries with respect to the transactions contemplated by the Loan Documents
and the Loans incurred by the Borrowers under this Agreement, each of the
Borrower and the Subsidiary Borrower, each on a consolidated basis, is Solvent.
5.16. Material Agreements. Except as set forth in Schedule 5.16 and
------------------- -------------
except for agreements or arrangements with regulatory agencies with regard to
Insurance Subsidiaries, neither the Borrower nor any Subsidiary is a party to
any agreement or instrument or subject to any charter or other corporate
restriction which could reasonably be expected to have a Material Adverse Effect
or which restricts or imposes conditions upon the ability of any Subsidiary to
(a) pay dividends or make other distributions on its capital stock (b) make
loans or advances to the Borrower, (c) repay loans or advances from Borrower or
(d) grant Liens to the Agent to secure the Obligations. Neither the Borrower nor
any Subsidiary is in default in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any agreement to
which it is a party, which default could reasonably be expected to have a
Material Adverse Effect.
5.17. Environmental Laws. There are no claims, investigations,
------------------
litigation, administrative proceedings, notices, requests for information (each
a "Proceeding"), whether pending or threatened, or judgments or orders asserting
----------
violations of applicable federal, state and local environmental, health and
safety statutes, regulations, ordinances, codes, rules, orders, decrees,
directives and standards ("Environmental Laws") or relating to any toxic or
------------------
hazardous waste, substance or chemical or any pollutant, contaminant, chemical
or other substance defined or regulated pursuant to any Environmental Law,
including, without limitation, asbestos, petroleum, crude oil or any fraction
thereof ("Hazardous Materials") asserted against the Borrower or any of its
-------------------
Subsidiaries other than in connection with an insurance policy issued in the
ordinary course of business to any Person (other than the Borrower or any
Subsidiary of the Borrower) which, in any case, could reasonably be expected to
have a Material Adverse Effect. As of the date hereof, the Borrower and its
Subsidiaries do not have liabilities exceeding $500,000 in the aggregate for all
of them with respect to compliance by them with applicable Environmental Laws or
related to the generation, treatment, storage, disposal, release, investigation
or cleanup by them of Hazardous Materials, and no facts or circumstances exist
which could give rise to such liabilities with respect to compliance with
applicable Environmental Laws and the generation, treatment, storage, disposal,
release, investigation or cleanup of Hazardous Materials.
5.18. Insurance. The Borrower and its Subsidiaries maintain with
---------
financially sound and reputable insurance companies insurance on their Property
in such amounts and covering such risks as is consistent with sound business
practice.
-28-
5.19. Disclosure. No information, exhibit or report furnished by either
----------
Borrower or any of its Subsidiaries to the Agent or to any Lender in connection
with the negotiation of, or compliance with, the Loan Documents contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein not materially misleading.
There is no fact known to the Borrowers (other than matters of a general
economic or political nature) that has had or could reasonably be expected to
have a Material Adverse Effect and that has not been disclosed herein or in such
other documents, certificates and statements furnished to the Lenders for use in
connection with the transactions contemplated by this Agreement.
ARTICLE VI
COVENANTS
---------
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for itself and
-------------------
each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, consistently applied,
and furnish to the Lenders:
(a) As soon as practicable and in any event within 100 days
after the close of each of its Fiscal Years, an unqualified audit
report certified by independent certified public accountants,
acceptable to the Lenders, prepared in accordance with Agreement
Accounting Principles on a consolidated and consolidating basis
(consolidating statements need not be certified by such accountants)
for itself and its Subsidiaries, including balance sheets as of the end
of such period and related statements of income, retained earnings and
cash flows.
(b) As soon as practicable and in any event within 60 days
after the close of each of the first three Fiscal Quarters of each of
its Fiscal Years, for itself and its Subsidiaries, consolidated and
consolidating unaudited balance sheets as at the close of each such
period and consolidated and consolidating statements of income,
retained earnings and cash flows for the period from the beginning of
such Fiscal Year to the end of such quarter, all certified by its chief
financial officer.
(c) Together with the financial statements required by
clauses (a) and (b) above, a compliance certificate in substantially
----------- ---
the form of Exhibit B hereto signed by its chief financial officer
---------
showing the calculations necessary to determine compliance with this
Agreement and stating that no Default or Unmatured Default exists, or
if any Default or Unmatured Default exists, stating the nature and
status thereof.
(d) Promptly after available after the close of each Fiscal
Year, a statement of the Unfunded Liabilities of each Single Employer
Plan, certified as correct by an actuary enrolled under ERISA.
-29-
(e) As soon as possible and in any event within 10 days
after the Borrower knows that any Termination Event has occurred with
respect to any Plan, a statement, signed by the chief financial officer
of the Borrower, describing said Termination Event and the action which
the Borrower proposes to take with respect thereto.
(f) As soon as possible and in any event within 10 days
after receipt by either Borrower, a copy of (i) any notice, claim,
complaint or order to the effect that the Borrower or any of its
Subsidiaries is or may be liable to any Person as a result of the
release by the Borrower or any of its Subsidiaries of any Hazardous
Materials into the environment or requiring that action be taken to
respond to or clean up a Release of Hazardous Materials into the
environment, and (ii) any notice, complaint or citation alleging any
violation of any Environmental Law or Environmental Permit by the
Borrower or any of its Subsidiaries. Within ten days of the Borrower or
any Subsidiary having knowledge of the enactment or promulgation of any
Environmental Law which could reasonably be expected to have a Material
Adverse Effect, the Borrower shall provide the Agent with written
notice thereof.
(g) Promptly upon the furnishing thereof to the shareholders
of the Borrower, copies of all financial statements, reports and proxy
statements so furnished.
(h) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular
reports which the Borrower or any of its Subsidiaries files with the
Securities and Exchange Commission.
(i) Promptly and in any event within ten (10) days after
learning thereof, notification of (i) any tax assessment, demand,
notice of proposed deficiency or notice of deficiency received by the
Borrower or any other Consolidated Person or (ii) the filing of any tax
Lien or commencement of any judicial proceeding by or against any such
Consolidated Person, if any such assessment, demand, notice, Lien or
judicial proceeding relates to tax liabilities in excess of ten percent
(10%) of the net worth (determined according to generally accepted
accounting standards and without reduction for any reserve for such
liabilities) of the Borrower and its Subsidiaries taken as a whole.
(j) Promptly after the same becomes available, any
management letter prepared by the accountants conducting the audit of
the financial statements delivered pursuant to Section 6.1 (a).
---------------
(k) As soon as possible and in any event within [3] days
after either Borrower obtains knowledge thereof, notice of any change
in the Applicable Credit Rating of S&P or Xxxxx'x.
(l) Such other information (including non-financial
information) as the Agent or any Lender may from time to time
reasonably request.
6.2. Use of Proceeds. The Borrower will, and will cause each Subsidiary
---------------
to, use the proceeds of the Advances to meet the working capital and general
corporate needs of the Borrower
-30-
and its Subsidiaries, including but not limited to the purchase of Finance
Assets. The Borrower will not, nor will it permit any Subsidiary to, use any of
the proceeds of the Advances in a manner which would violate, or result in a
violation of, Regulation G, Regulation T, Regulation U or Regulation X, or to
finance the Purchase of any Person which has not been approved and recommended
by the board of directors (or functional equivalent thereof) of such Person.
6.3. Notice of Default. The Borrower will give prompt notice in writing
-----------------
to the Lenders of the occurrence of (a) any Default or Unmatured Default and (b)
of any other event or development, financial or other, relating specifically to
the Borrower or any of its Subsidiaries (and not of a general economic or
political nature) which could reasonably be expected to have a Material Adverse
Effect.
6.4. Conduct of Business. The Borrower will, and will cause each
-------------------
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of as it is presently conducted, to
not conduct any significant business except for financial services, and to do
all things necessary to remain duly incorporated, validly existing and in good
standing as a domestic corporation in its jurisdiction of incorporation and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted. The Borrower shall cause the Subsidiary
Borrower to remain a Wholly-Owned Subsidiary unless and until the Subsidiary
Borrower shall have irrevocably waived its right to be a borrower hereunder and
shall have repaid all outstanding Advances and other Obligations of such
Subsidiary Borrower.
6.5. Taxes. The Borrower will, and will cause each Subsidiary to,
-----
timely file complete and correct United States federal and applicable foreign,
state and local tax returns required by applicable law and pay when due all
taxes, assessments and governmental charges and levies upon it or its income,
profits or Property, except those which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves have been
set aside.
6.6. Insurance. The Borrower will, and will cause each Subsidiary to,
---------
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts and covering such risks as is consistent with
sound business practice, and the Borrower will furnish to the Agent and any
Lender upon request full information as to the insurance carried.
6.7. Compliance with Laws. The Borrower will, and will cause each
--------------------
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject, the
failure to comply with which could reasonably be expected to have a Material
Adverse Effect.
6.8. Maintenance of Properties. The Borrower will, and will cause each
-------------------------
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times.
6.9. Inspection. The Borrower will, and will cause each Subsidiary to,
----------
at reasonable times during normal business hours and upon reasonable notice,
permit the Agent and the Lenders,
-31-
by their respective representatives and agents, to inspect any of the Property,
corporate books and financial records of the Borrower and each Subsidiary, to
examine and make copies of the books of accounts and other financial records of
the Borrower and each Subsidiary, and to discuss the affairs, finances and
accounts of the Borrower and each Subsidiary with, and to be advised as to the
same by, their respective officers at such reasonable times and intervals as the
Lenders may designate. The Borrower will keep or cause to be kept, and cause
each Subsidiary to keep or cause to be kept, appropriate records and books of
account in which complete entries are to be made reflecting its and their
business and financial transactions, such entries to be made in accordance with
Agreement Accounting Principles.
6.10. Dividends. The Borrower will not declare or pay any dividends or
---------
make any distributions on its capital stock (other than dividends payable in its
own capital stock) or redeem, repurchase or otherwise acquire or retire any of
its capital stock or any options or other rights in respect thereof at any time
outstanding, except that so long as no Default or Unmatured Default exists
before or after giving effect to the declaration or payment of such dividends or
distributions or repurchase or redemption of such stock or other transaction,
the Borrower may declare and pay dividends, and make distributions, on its
common stock and repurchase and redeem and otherwise acquire or retire its
common stock and any options or other rights in respect thereof.
6.11. Indebtedness. The Borrower will not, nor will it permit any
------------
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(a) the Loans;
(b) Indebtedness existing on the date hereof and any
renewals, extensions, refundings or refinancings of such Indebtedness;
(c) Indebtedness owing by (x) the Borrower to the Subsidiary
Borrower or any Wholly-Owned Subsidiary, (y) the Subsidiary Borrower to
the Borrower or any Wholly- Owned Subsidiary and (z) any Wholly-Owned
Subsidiary to a Wholly-Owned Subsidiary, the Borrower or the Subsidiary
Borrower;
(d) Indebtedness permitted under the White Mountains Credit
Agreement and the Valley Credit Agreement; and
(e) other Indebtedness, so long as after giving effect to
the incurrence of any such Indebtedness the covenants contained in
Section 6.19 shall be complied with on a pro forma basis as of the date
---------
such Indebtedness was incurred.
6.12. Merger. The Borrower will not, nor will it permit any Significant
------
Subsidiary to, merge or consolidate with or into any other Person, except that:
(a) a Wholly-Owned Subsidiary may merge into the Borrower or any
Wholly-Owned Subsidiary of the Borrower;
-32-
(b) a Significant Subsidiary (other than the Subsidiary
Borrower) may merge or consolidate with any Person so long as either
(x)(i) no Default or Unmatured Default shall have occurred or be
continuing before and after giving effect to such merger or consolidation
and (ii) such Significant Subsidiary is the continuing or surviving
corporation or (y) neither the Borrower, the Subsidiary Borrower nor any
of their Subsidiaries hold any capital stock of such Significant
Subsidiary after giving effect to such merger or consolidation;
(c) the Borrower may merge or consolidate with any other
Person, so long as immediately thereafter (and after giving effect
thereto), (i) no Default or Unmatured Default exists, (ii) the Borrower
is the continuing or surviving corporation and (iii) the covenants
contained in Section 6.19 shall be complied with on a pro forma basis on
------------ --- -----
the date of, and after giving effect to, such merger or consolidation;
and
(d) the Subsidiary Borrower may merge or consolidate with any
other Person, so long as immediately thereafter (and after giving effect
thereto), (i) whether or not the Loans attributable to the Subsidiary
Borrower are outstanding on the date of the consummation of such merger
or consolidation, (x) no Default of Unmatured Default exists, (y) the
Subsidiary Borrower is the continuing or surviving corporation and
(z) the covenants contained in Section 6.19 shall be complied with on a
pro forma basis on the date of, and after giving effect to, such merger
--- -----
or consolidation or (ii) in the event no Loans attributable to the
Subsidiary Borrower are outstanding on the date of the consummation of
such merger or consolidation, (x) no Default or Unmatured Default exists,
(y) the Subsidiary Borrower shall have delivered written notice to the
Lenders at least 15 days prior to the date of the consummation of such
merger or consolidation and (z) the Subsidiary Borrower shall have
delivered a certificate (in form and substance acceptable to the Agent
and executed by an Authorized Officer) to the Agent on, and dated, the
date of the consummation of such merger or consolidation (A) stating that
it relinquishes its rights to request Loans under this Agreement and
(B) confirming that the Subsidiary Borrower has paid in full all amounts
then due and owing to any Lender under Sections 3.5 or 9.7 and under
-------------------
Section 15 to the extent the Borrower incurred Obligations of the type
----------
described in Sections 3.5 or 9.7 on or prior to the date of the
-------------------
consummation of such merger or consolidation, it being understood and
agreed that upon the delivery of such certificate the Subsidiary Borrower
shall cease to be one of the Borrowers hereunder and shall have no
rights, duties or obligations under this Agreement and references to the
Subsidiary Borrower as such in this Agreement shall be deemed to be
deleted.
6.13. Contingent Obligations. The Borrower will not, nor will it permit
----------------------
any Subsidiary to, make or suffer to exist any Contingent Obligation (including,
without limitation, any Contingent Obligation with respect to the obligations of
a Subsidiary), except (a) the issuance of financial guarantees in the ordinary
course of business and consistent with past practices, (b) by endorsement of
instruments for deposit or collection in the ordinary course of business, (c)
for insurance policies issued in the ordinary course of business and (d) the
issuance of intercompany guarantees so long as the primary obligation is
permitted pursuant to this Agreement.
-33-
6.14. Liens. The Borrower will not, nor will it permit any Subsidiary
-----
to, create, incur, or suffer to exist any Lien in, of or on the Property (other
than Margin Stock) of the Borrower or any of its Subsidiaries, except:
(a) Liens for taxes, assessments or governmental charges or
levies on its Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in good
faith and by appropriate proceedings and for which adequate reserves in
accordance with generally accepted principles of accounting shall have
been set aside on its books;
(b) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary course
of business which secure the payment of obligations not more than 60 days
past due or which are being contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside on
its books;
(c) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation;
(d) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar character and
which do not in any material way affect the marketability of the same or
interfere with the use thereof in the business of the Borrower or the
Subsidiaries;
(e) Liens existing on the date hereof and described in
Schedule 6.14 hereto;
-------------
(f) Liens in, of or on Property acquired after the date of this
Agreement (by purchase, construction or otherwise) by the Borrower or any
of its Subsidiaries, each of which Liens either (1) existed on such
Property before the time of its acquisition and was not created in
anticipation thereof, or (2) was created solely for the purpose of
securing Indebtedness representing, or incurred to finance, refinance or
refund, the cost (including the cost of construction) of such Property;
provided that no such Lien shall extend to or cover any Property of the
--------
Borrower or such Subsidiary other than the Property so acquired and
improvements thereon; and provided, further, that the principal amount of
-------- -------
Indebtedness secured by any such Lien shall at the time the Lien is
incurred not exceed 75% of the fair market value (as determined in good
faith by a financial officer of the Borrower and, in the case of such
Property having a fair market value in excess of $500,000, certified by
such officer to the Agent, with a copy for each Lender) of the Property
at the time it was so acquired; and
(g) Liens not otherwise permitted by the foregoing clauses
(a) through (f) securing any Indebtedness of the Borrowers, provided that
--------
the aggregate principal amount of Indebtedness secured by Liens permitted
by this clause (g) shall not exceed $5,000,000 at any time.
-34-
6.15. Affiliates. The Borrower will not, and will not permit any
----------
Subsidiary to, enter into any material transaction (including, without
limitation, the purchase or sale of any Property or service) with, or make any
payment or transfer to, any Affiliate (other than a Wholly-Owned Subsidiary),
except in the ordinary course of business and pursuant to the reasonable
requirements of the Borrower's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary than the
Borrower or such Subsidiary would obtain in a comparable arms-length transaction
and except for the FSA Transfer.
6.16. Environmental Matters. The Borrower shall and shall cause each of
---------------------
its Subsidiaries to (a) at all times comply in all material respects with all
applicable Environmental Laws and (b) promptly take any and all necessary
remedial actions in response to the presence, storage, use, disposal,
transportation or Release of any Hazardous Materials on, under or about any real
property owned, leased or operated by the Borrower or any of its Subsidiaries.
6.17. Change in Corporate Structure; Fiscal Year. The Borrower shall
------------------------------------------
not, nor shall it permit any Subsidiary to, (a) permit any amendment or
modification to be made to its certificate or articles of incorporation or by-
laws which is materially adverse to the interests of the Lenders or (b) change
its Fiscal Year to end on any date other than December 31 of each year.
6.18. Inconsistent Agreements. The Borrower shall not, nor shall it
-----------------------
permit any Subsidiary to, enter into any indenture, agreement, instrument or
other arrangement which by its terms, (a) other than pursuant to the White
Mountains Credit Agreement or the Valley Credit Agreement (in each case as in
effect on the date of this Agreement) or pursuant to agreements or arrangements
with regulatory agencies with regard to Insurance Subsidiaries, directly or
indirectly contractually prohibits or restrains, or has the effect of
contractually prohibiting or restraining, or contractually imposes materially
adverse conditions upon, the incurrence of the Obligations, the granting of
Liens to secure the Obligations, the amending of the Loan Documents or the
ability of any Subsidiary to (i) pay dividends or make other distributions on
its capital stock, (ii) make loans or advances to the Borrower or (iii) repay
loans or advances from the Borrower or (b) contains any provision which would be
violated or breached by the making of Advances or by the performance by the
Borrower or any Subsidiary of any of its obligations under any Loan Document.
6.19. Financial Covenants.
-------------------
6.19.1. Minimum Net Worth. The Borrower shall at all times after the
-----------------
date hereof, maintain a minimum Net Worth at least equal to the sum of
(a) $587,595,887 minus (b) an amount equal to the aggregate reduction in Net
-----
Worth attributable to all Stock Transfers made after September 30, 1996, plus
----
(c) an amount equal to 90% of the cash and non-cash proceeds of any equity
securities issued by the Borrower after September 30, 1996.
6.19.2. Leverage Ratio. The Borrower shall at all times after the date
--------------
hereof maintain a Leverage Ratio of not greater than 25%.
6.19.3. Borrower Finance Assets Ratio. The Borrower shall, at any time
-----------------------------
Loans are outstanding to the Borrower and the sum of cash and Money Market
Investments of the Borrower
-35-
is less than the aggregate outstanding principal amount of Funded Indebtedness
of the Borrower at such time, maintain a Finance Assets Ratio of not less than
1.5:1.0.
6.19.4. Subsidiary Borrower Finance Assets Ratio. The Subsidiary Borrower
----------------------------------------
shall, at any time Loans are outstanding to the Subsidiary Borrower and the sum
of cash and Money Market Investments of the Subsidiary Borrower is less than the
aggregate outstanding principal amount of Funded Indebtedness of the Subsidiary
Borrower at such time, maintain a Finance Assets Ratio of not less than 1.5:1.0.
6.20. Tax Consolidation. The Borrower will not and will not permit any
-----------------
of its Subsidiaries to (a) file or consent to the filing of any consolidated,
combined or unitary income tax return with any Person other than the Borrower
and its Subsidiaries or (b) amend, terminate or fail to enforce any existing tax
sharing agreement or similar arrangement if such action would cause a Material
Adverse Effect.
6.21. ERISA Compliance.
----------------
With respect to any Plan, neither the Borrower nor any Subsidiary
shall:
(a) engage in any "prohibited transaction" (as such term is
defined in Section 406 of ERISA or Section 4975 of the Code) for which a
civil penalty pursuant to Section 502(i) of ERISA or a tax pursuant to
Section 4975 of the Code in excess of $500,000 could be imposed;
(b) incur any "accumulated funding deficiency" (as such term is
defined in Section 302 of ERISA) in excess of $500,000, whether or not
waived, or permit any Unfunded Liability to exceed $500,000;
(c) permit the occurrence of any Termination Event which could
result in a liability to the Borrower or any other member of the
Controlled Group in excess of $500,000;
(d) be an "employer" (as such term is defined in Section 3(5)
of ERISA) required to contribute to any Multiemployer Plan or a
"substantial employer" (as such term in defined in Section 4001(a)(2) of
ERISA) required to contribute to any Multiple Employer Plan; or
(e) permit the establishment or amendment of any Plan or fail
to comply with the applicable provisions of ERISA and the Code with
respect to any Plan which could result in liability to the Borrower or
any other member of the Controlled Group which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect.
-36-
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on behalf
of the Borrower or any of its Subsidiaries to the Lenders or the Agent under or
in connection with this Agreement, any other Loan Document, any Loan, or any
certificate or information delivered in connection with this Agreement or any
other Loan Document shall be false in any material respect on the date as of
which made.
7.2. Nonpayment of (a) any principal of any Note when due, or (b) any
interest upon any Note or any commitment fee or other fee or obligations under
any of the Loan Documents within five days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or provisions of
Section 6.2, Section 6.3(a) or Sections 6.10 through 6.15 or Section 6.17
----------- -------------- ------------- ---- ------------
through 6.21.
----
7.4. The breach by either of the Borrowers (other than a breach which
constitutes a Default under Section 7.1, 7.2 or 7.3) of any of the terms or
----------- --- ---
provisions of this Agreement which is not remedied within twenty (20) days after
written notice from the Agent or any Lender.
7.5. The default by the Borrower or any of its Subsidiaries in the
performance of any term, provision or condition contained in any agreement or
agreements under which any Funded Indebtedness aggregating in excess of
$10,000,000 was created or is governed, or the occurrence of any other event or
existence of any other condition, the effect of any of which is to cause, or to
permit the holder or holders of such Funded Indebtedness to cause, such Funded
Indebtedness to become due prior to its stated maturity; or any such Funded
Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be
due and payable or required to be prepaid (other than by a regularly scheduled
payment) prior to the stated maturity thereof.
7.6. The Borrower or any of its Significant Subsidiaries shall (a) have
an order for relief entered with respect to it under the Federal bankruptcy laws
as now or hereafter in effect, (b) make an assignment for the benefit of
creditors, (c) apply for, seek, consent to, or acquiesce in, the appointment of
a receiver, custodian, trustee, examiner, liquidator or similar official for it
or any substantial portion of its Property, (d) institute any proceeding seeking
an order for relief under the Federal bankruptcy laws as now or hereafter in
effect or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement, adjustment or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed against
it, (e) take any corporate action to authorize or effect any of the foregoing
actions set forth in this Section 7.6, (f) fail to contest in good faith any
-----------
appointment or
-37-
proceeding described in Section 7.7 or (g) become unable to pay, not pay, or
-----------
admit in writing its inability to pay, its debts generally as they become due.
7.7. Without the application, approval or consent of the Borrower or
any of its Significant Subsidiaries, a receiver, trustee, examiner, liquidator
or similar official shall be appointed for the Borrower or any of its
Significant Subsidiaries or any substantial portion of its Property, or a
proceeding described in Section 7.6(d) shall be instituted against the Borrower
--------------
or any of its Significant Subsidiaries and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of sixty consecutive days.
7.8. The Borrower or any of its Subsidiaries shall fail within thirty
days to pay, bond or otherwise discharge any judgment or order for the payment
of money in excess of $2,000,000 (or multiple judgments or orders for the
payment of an aggregate amount in excess of $10,000,000), which is not stayed on
appeal or otherwise being appropriately contested in good faith and as to which
no enforcement actions have been commenced.
7.9. Any Change in Control shall occur.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
----------------------------------------------
8.1. Acceleration. If any Default described in Section 7.6 or 7.7
------------ ----------- ---
occurs with respect to either of the Borrowers, the obligations of the Lenders
to make Loans hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part of
the Agent or any Lender. If any other Default occurs, the Required Lenders (or
the Agent with the consent of the Required Lenders) may terminate or suspend the
obligations of the Lenders to make Loans hereunder, or declare the Obligations
to be due and payable, or both, whereupon the Obligations shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which the Borrowers hereby expressly waive.
If, within ten Business Days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 7.6 or 7.7 with respect to either of the Borrowers) and before any
----------- ---
judgment or decree for the payment of the Obligations due shall have been
obtained or entered, the Required Lenders (in their sole discretion) shall so
direct, the Agent shall, by notice to the Borrower, rescind and annul such
acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Article VIII, the
---------- ------------
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrowers may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrowers hereunder or
-38-
waiving any Default hereunder; provided, however, that no such supplemental
-------- -------
agreement shall, without the consent of each Lender:
(a) Extend the final maturity of any Loan or Note or reduce
the principal amount thereof, or reduce the rate or, subject to Section
2.10, extend the time of payment of interest or fees thereon;
(b) Reduce the percentage specified in the definition of
Required Lenders;
(c) Increase the amount of the Commitment of any Lender
hereunder;
(d) Extend the Revolver Termination Date or the Maturity
Date;
(e) Amend this Section 8.2;
-----------
(f) Permit any assignment by either of the Borrowers of
its Obligations or its rights hereunder;
(g) Release the Borrower from its obligations under
Article XIV; or
-----------
(h) Except as permitted by Section 6.12(d)(ii), release
-------------------
the Subsidiary Borrower from its obligations under Article XV.
----------
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may waive payment
of the fee required under Section 12.3.2 without obtaining the consent of any
--------------
other party to this Agreement.
8.3. Preservation of Rights. No delay or omission of the Lenders or the
----------------------
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
the Borrowers to satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to Section 8.2, and then only
-----------
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid in
full.
-39-
ARTICLE IX
GENERAL PROVISIONS
------------------
9.1. Survival of Representations. All representations and
---------------------------
warranties of the Borrowers contained in this Agreement or of the Borrower or
any Subsidiary contained in any Loan Document shall survive delivery of the
Notes and the making of the Loans herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement
-----------------------
to the contrary notwithstanding, no Lender shall be obligated to extend credit
to the Borrowers in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3. Taxes. Any stamp, documentary or similar taxes, assessments or
-----
charges payable or ruled payable by any governmental authority in respect of the
Loan Documents shall be paid by the Borrowers, together with interest and
penalties, if any.
9.4. Headings. Section headings in the Loan Documents are for
--------
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.5. Entire Agreement. The Loan Documents embody the entire
----------------
agreement and understanding among the Borrowers, the Agent and the Lenders and
supersede all prior agreements and understandings among the Borrowers, the Agent
and the Lenders relating to the subject matter thereof other than the fee
letter, dated September 5, 1996, in favor of First Chicago.
9.6. Several Obligations; Benefits of this Agreement. The
-----------------------------------------------
respective obligations of the Lenders hereunder are several and not joint and no
Lender shall be the partner or agent of any other (except to the extent to which
the Agent is authorized to act as such). The failure of any Lender to perform
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns.
9.7. Expenses; Indemnification. The Borrowers shall reimburse the
-------------------------
Agent for any reasonable costs, internal charges and out-of-pocket expenses
(including attorneys' fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent) paid or incurred by the Agent in
connection with the preparation, negotiation, execution, delivery, review,
amendment, modification, and administration of the Loan Documents. The Borrowers
also agree to reimburse the Agent and the Lenders for any reasonable costs,
internal charges and out-of-pocket expenses (including attorneys' fees and time
charges of attorneys for the Agent and the Lenders, which attorneys may be
employees of the Agent or the Lenders) paid or incurred by the Agent or any
Lender in connection with the collection and enforcement of the Loan Documents.
The Borrowers further agree to indemnify the Agent and each Lender, its
directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not the
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Agent or any Lender is a party thereto) which any of them may pay or incur
arising out of or relating to this Agreement, the other Loan Documents, the
transactions contemplated hereby or thereby or the direct or indirect
application or proposed application of the proceeds of any Loan hereunder
arising from claims or assertions by third parties except to the extent that
they arise out of the gross negligence or willful misconduct of the party
seeking indemnification. The obligations of the Borrowers under this Section
shall survive the termination of this Agreement.
9.8. Numbers of Documents. All statements, notices, closing
--------------------
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
9.9. Accounting. Except as provided to the contrary herein, all
----------
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
9.10. Severability of Provisions. Any provision in any Loan Document
--------------------------
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.11. Nonliability of Lenders. The relationship between the
-----------------------
Borrowers and the Lenders and the Agent shall be solely that of borrower and
lender. Neither the Agent nor any Lender shall have any fiduciary
responsibilities to the Borrowers. Neither the Agent nor any Lender undertakes
any responsibility to the Borrowers to review or inform the Borrower of any
matter in connection with any phase of the Borrowers' business or operations.
The Borrowers shall rely entirely upon its own judgment with respect to its
business, and any review, inspection or supervision of, or information supplied
to the Borrowers by the Agent or the Lenders is for the protection of the Agent
and the Lenders and neither of the Borrowers nor any other Person is entitled to
rely thereon. Whether or not such damages are related to a claim that is subject
to the waiver effected above and whether or not such waiver is effective,
neither the Agent nor any Lender shall have any liability with respect to, and
the Borrowers hereby waive, release and agree not to xxx for, any special,
indirect or consequential damages suffered by the Borrower in connection with,
arising out of, or in any way related to the Loan Documents or the transactions
contemplated thereby or the relationship established by the Loan Documents, or
any act, omission or event occurring in connection therewith.
9.12. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING
-------------
A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS, WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS, OF THE
STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
9.13. CONSENT TO JURISDICTION. THE BORROWERS HEREBY IRREVOCABLY
-----------------------
SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL
-41-
OR ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWERS HEREBY IRREVOCABLY
AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVE ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE
BORROWERS IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
THE BORROWERS AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR
ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A
COURT IN CHICAGO, ILLINOIS; PROVIDED, THAT SUCH PROCEEDINGS MAY BE BROUGHT IN
OTHER COURTS IF JURISDICTION MAY NOT BE OBTAINED IN A COURT IN CHICAGO,
ILLINOIS.
9.14. WAIVER OF JURY TRIAL. THE BORROWERS, THE AGENT AND EACH LENDER
--------------------
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
9.15. Disclosure. The Borrowers and each Lender hereby (a)
----------
acknowledge and agree that First Chicago and/or its Affiliates from time to time
may hold other investments in, make other loans to or have other relationships
with the Borrowers, including, without limitation, in connection with any
interest rate hedging instruments or agreements or swap transactions, and (b)
waive any liability of First Chicago or such Affiliate to the Borrowers or any
Lender, respectively, arising out of or resulting from such investments, loans
or relationships other than liabilities arising out of the gross negligence or
willful misconduct of First Chicago or its Affiliates to the extent that such
liability would not have arisen but for First Chicago's status as Agent
hereunder.
9.16. Counterparts. This Agreement may be executed in any number of
------------
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by the
Borrower, the Agent and the Lenders and each party has notified the Agent that
it has taken such action.
9.17. Certain Notices. The Borrowers, the Agent and the Lenders
---------------
agree that notwithstanding any provisions herein to the contrary, (a) all
notices and directions permitted or required to be given hereunder by or to the
Subsidiary Borrower may be given by or to the Borrower, (b) the Agent and the
Lenders may rely and act upon all such notices and directions given by the
Borrower purportedly on behalf of the Subsidiary Borrower as if such notices and
directions had been given by the Subsidiary Borrower itself and (c) the Agent
may disburse the proceeds of
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Advances to the Subsidiary Borrower to the Borrower for the account of the
Subsidiary Borrower or as the Borrower may otherwise direct.
9.18. Treatment of Certain Information: Confidentiality.
-------------------------------------------------
(a) Each Borrower acknowledges that (i) services may be
offered or provided to it (in connection with this Agreement or otherwise) by
each Lender or by one or more Subsidiaries or Affiliates of such Lender and (ii)
information delivered to each Lender by such Borrower and its Subsidiaries may
be provided to each such Subsidiary and Affiliate, it being understood that any
such Subsidiary or Affiliate receiving such information shall be bound by the
provisions of clause (b) below as if it were a Lender hereunder.
(b) Each Lender and the Agent agrees (on behalf of itself and
each of its affiliates, directors, officers, employees and representatives) to
use reasonable precautions to keep confidential, in accordance with their
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices, any non-public information
supplied to it by either Borrower pursuant to this Agreement, provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statue, rule, regulation or judicial process, (ii) to counsel
for any of the Lenders or the Agent, (iii) to bank examiners, auditors or
accountants, (iv) to the Agent or any other Lender (or to First Chicago Capital
Markets, Inc.), (v) in connection with any litigation to which any one or more
of the Lenders or the Agent is a party, (vi) to a subsidiary or affiliate of
such Lender as provided in clause (a) above, (vii) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) agrees with the respective
Lender to keep such information confidential on substantially the terms set
forth in this Section 9.18(b), (viii) to any other Person as may be reasonably
---------------
required in the course of the enforcement of any Lender's rights or remedies
hereunder or under any of such Lender's Note, or (ix) to any other creditor of
either Borrower or any of its Subsidiaries at any time during the continuance of
a Default; provided that in no event shall any Lender or the Agent be obligated
--------
or required to return any materials furnished by either Borrower.
ARTICLE X
THE AGENT
---------
10.1. Appointment. First Chicago is hereby appointed Agent hereunder
-----------
and under each other Loan Document, and each of the Lenders authorizes the Agent
to act as the agent of such Lender. The Agent agrees to act as such upon the
express conditions contained in this Article X. The Agent shall not have a
---------
fiduciary relationship in respect of the Borrowers or any Lender by reason of
this Agreement.
10.2. Powers. The Agent shall have and may exercise such powers
------
under the Loan Documents as are specifically delegated to the Agent by the terms
of each thereof, together with
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such powers as are reasonably incidental thereto. The Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders to take any
action thereunder, except any action specifically provided by the Loan Documents
to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
----------------
officers, agents or employees shall be liable to the Borrowers or any Lender for
any action taken or omitted to be taken by it or them hereunder or under any
other Loan Document or in connection herewith or therewith except for its or
their own gross negligence or willful misconduct.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent
------------------------------------------
nor any of its directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into, or verify (a) any statement,
warranty or representation made in connection with any Loan Document or any
borrowing hereunder, (b) the performance or observance of any of the covenants
or agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
----------
receipt of items required to be delivered to the Agent and not waived at
closing, or (d) the validity, effectiveness, sufficiency, enforceability or
genuineness of any Loan Document or any other instrument or writing furnished in
connection therewith. The Agent shall have no duty to disclose to the Lenders
information that is not required to be furnished by the Borrowers to the Agent
at such time, but is voluntarily furnished by the Borrowers to the Agent (either
in its capacity as Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall in all
---------------------------------
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Lenders (or, to the extent required by Section 8.2, all Lenders),
-----------
and such instructions and any action taken or failure to act pursuant thereto
shall be binding on all of the Lenders and on all holders of Notes. The Agent
shall be fully justified in failing or refusing to take any action hereunder and
under any other Loan Document unless it shall first be indemnified to its
satisfaction by the Lenders pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing to take any such
action.
10.6. Employment of Agents and Counsel. The Agent may execute any of
--------------------------------
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to
------------------------------
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
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10.8. Agent's Reimbursement and Indemnification. The Lenders agree
-----------------------------------------
to reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (a) for any amounts not
reimbursed by the Borrowers for which the Agent is entitled to reimbursement by
the Borrowers under the Loan Documents, (b) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents, and
(c) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby, or
the enforcement of any of the terms thereof or of any such other documents;
provided, that no Lender shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the Agent. The
obligations of the Lenders under this Section 10.8 shall survive payment of the
------------
Obligations and termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have
-----------------
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender or the
Borrowers referring to this Agreement describing such Default or Unmatured
Default and stating that such notice is a "notice of default". In the event that
the Agent receives such a notice, the Agent shall give prompt notice thereof to
the Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender, the
------------------
Agent shall have the same rights and powers hereunder and under any other Loan
Document as any Lender, including, without limitation, pursuant to Article XII
-----------
hereof, and may exercise the same as though it were not the Agent, and the term
"Lender" or "Lenders" shall, at any time when the Agent is a Lender, unless the
context otherwise indicates, include the Agent in its individual capacity. The
Agent may accept deposits from, lend money to, and generally engage in any kind
of trust, debt, equity or other transaction, in addition to those contemplated
by this Agreement or any other Loan Document, with the Borrowers or any of their
respective Subsidiaries in which the Borrowers or such Subsidiary is not
restricted hereby from engaging with any other Person.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
----------------------
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Borrowers and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving
---------------
written notice thereof to the Lenders and the Borrowers, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. Upon any such resignation, the Required Lenders shall
-45-
have the right to appoint, on behalf of the Lenders, a successor Agent, which
successor Agent, so long as no Default is continuing, shall be reasonably
acceptable to the Borrowers. If no successor Agent shall have been so appointed
by the Required Lenders and shall have accepted such appointment within thirty
days after the resigning Agent's giving notice of its intention to resign, then
the resigning Agent may appoint, on behalf of the Borrowers and the Lenders, a
successor Agent, which successor Agent, so long as no Default is continuing,
shall be reasonably acceptable to the Borrowers. If the Agent has resigned and
no successor Agent has been appointed, the Lenders may perform all the duties of
the Agent hereunder and the Borrowers shall make all payments in respect of the
Obligations to the applicable Lender and for all other purposes shall deal
directly with the Lenders. No successor Agent shall be deemed to be appointed
hereunder until such successor Agent has accepted the appointment. Any such
successor Agent shall be a commercial bank having capital and retained earnings
of at least $50,000,000 and with a Lending Installation in the United States of
America. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the resigning
Agent. Upon the effectiveness of the resignation of the Agent, the resigning
Agent shall be discharged from its duties and obligations hereunder and under
the Loan Documents. After the effectiveness of the resignation of an Agent, the
provisions of this Article X shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as the
Agent hereunder and under the other Loan Documents.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
------------------------
11.1. Setoff. In addition to, and without limitation of, any rights of
------
the Lenders under applicable law, if the Borrower or the Subsidiary Borrower
becomes insolvent, however evidenced, or any Default or Unmatured Default
occurs, any and all deposits (including all account balances, whether
provisional or final and whether or not collected or available) and any other
Indebtedness at any time held or owing by any Lender to or for the credit or
account of the Borrower or the Subsidiary Borrower may be offset and applied
toward the payment of the Obligations owing to such Lender, whether or not the
Obligations, or any part hereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise,
----------------
has payment made to it upon its Loans (other than payments received pursuant to
Section 2.17, 3.1, 3.2 or 3.4) in a greater proportion than its pro-rata share
------------ --- --- ---
of such Loans, such Lender agrees, promptly upon demand, to purchase a portion
of the Loans held by the other Lenders so that after such purchase each Lender
will hold its ratable proportion of Loans. If any Lender, whether in connection
with setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made. If an
amount to be setoff is to be applied to Indebtedness of the Borrowers to a
Lender, other than Indebtedness evidenced by any of the Notes
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held by such Lender, such amount shall be applied ratably to such other
Indebtedness and to the Indebtedness evidenced by such Notes.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
-------------------------------------------------
12.1. Successors and Assigns. The terms and provisions of the Loan
----------------------
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (a) the
Borrowers shall not have the right to assign their respective rights or
obligations under the Loan Documents, and (b) any assignment by any Lender must
be made in compliance with Section 12.3. Notwithstanding clause (b) of the
------------ ---------
preceding sentence, any Lender may at any time, without the consent of the
Borrowers or the Agent, assign all or any portion of its rights under this
Agreement and its Notes to a Federal Reserve Bank; provided, however, that no
-------- -------
such assignment to a Federal Reserve Bank shall release the transferor Lender
from its obligations hereunder. The Agent may treat the payee of any Note as the
owner thereof for all purposes hereof unless and until such payee complies with
Section 12.3 in the case of an assignment thereof or, in the case of any other
------------
transfer, a written notice of the transfer is filed with the Agent. Any assignee
or transferee of a Note agrees by acceptance thereof to be bound by all the
terms and provisions of the Loan Documents. Any request, authority or consent of
any Person, who 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 or assignee of such Note or of any Note or Notes
issued in exchange therefor.
12.2. Participations.
--------------
12.2.1. Permitted Participants; Effect. Any Lender may, in the
------------------------------
ordinary course of its business and in accordance with applicable law, at any
time sell to one or more banks or other entities ("Participants") participating
------------
interests in any Loan owing to such Lender, any Note held by such Lender, any
Commitment of such Lender or any other interest of such Lender under the Loan
Documents. In the event of any such sale by a Lender of participating interests
to a Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain
the holder of any such Note for all purposes under the Loan Documents, all
amounts payable by the Borrowers under this Agreement shall be determined as if
such Lender had not sold such participating interests, and the Borrowers and the
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under the Loan Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole right
-------------
to approve, without the consent of any Participant, any amendment, modification
or waiver of any provision of the Loan Documents other than any amendment,
modification or waiver which effects any of the modifications referenced in
clauses (a) through (h) of Section 8.2.
-----------
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12.2.3. Benefit of Setoff. The Borrowers agree that each
-----------------
Participant shall be deemed to have the right of setoff provided in Section 11.1
------------
in respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under the Loan Documents; provided, that each
--------
Lender shall retain the right of setoff provided in Section 11.1 with respect to
------------
the amount of participating interests sold to each Participant. The Lenders
agree to share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each Lender, any
------------
amount received pursuant to the exercise of its right of setoff, such amounts to
be shared in accordance with Section 11.2 as if each Participant were a Lender.
------------
12.3. Assignments.
-----------
12.3.1. Permitted Assignments. Any Lender may, in the ordinary
---------------------
course of its business and in accordance with applicable law, at any time assign
to one or more banks or other entities ("Purchasers") all or any part of its
----------
rights and obligations under the Loan Documents; provided, however, that in the
case of an assignment to an entity which is not a Lender or an Affiliate of a
lender, such assignment shall be in a minimum amount of $5,000,000 (or, if less,
the entire amount of such Lender's Commitment). Such assignment shall be
substantially in the form of Exhibit C hereto or in such other form as may be
---------
agreed to by the parties thereto. The consent of the Agent and, so long as no
Default under Section 7.2, 7.6 or 7.7 is continuing, the Borrowers, shall be
----------- --- ---
required prior to an assignment becoming effective with respect to a Purchaser
which is not a Lender or an Affiliate thereof. Such consent shall not be
unreasonably withheld.
12.3.2. Effect; Effective Date. Upon (a) delivery to the Agent
----------------------
of a notice of assignment, substantially in the form attached as Exhibit I to
Exhibit C hereto (a "Notice of Assignment"), together with any consents required
--------- --------------------
by Section 12.3.1, and (b) payment of a $3,000 fee to the Agent for processing
--------------
such assignment, such assignment shall become effective on the effective date
specified in such Notice of Assignment. On and after the effective date of such
assignment, (a) such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by the Lenders and shall have all
the rights and obligations of a Lender under the Loan Documents, to the same
extent as if it were an original party hereto, and (b) the transferor Lender
shall be released with respect to the percentage of the Aggregate Commitment and
Loans assigned to such Purchaser without any further consent or action by the
Borrowers, the Lenders or the Agent. Upon the consummation of any assignment to
a Purchaser pursuant to this Section 12.3.2, the transferor Lender, the Agent
--------------
and the Borrowers shall make appropriate arrangements so that replacement Notes
are issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in principal
amounts reflecting their Commitment, as adjusted pursuant to such assignment.
12.4. Dissemination of Information. Subject to Section 9.18, the
----------------------------
Borrowers authorize each Lender to disclose to any Participant or Purchaser or
any other Person acquiring an interest in the Loan Documents by operation of law
(each a "Transferee") and any prospective Transferee any and all information in
----------
such Lender's possession concerning the creditworthiness of the Borrower and its
Subsidiaries.
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12.5. Tax Treatment. If any interest in any Loan Document is
-------------
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 2.17.
------------
ARTICLE XIII
NOTICES
-------
13.1. Giving Notice. All notices and other communications provided to
-------------
any party hereto under this Agreement or any other Loan Document shall be in
writing, by facsimile, first class U.S. mail or overnight courier and addressed
or delivered to such party at its address set forth below its signature hereto
or at such other address as may be designated by such party in a notice to the
other parties. Any notice, if mailed and properly addressed with first class
postage prepaid, return receipt requested, shall be deemed given three (3)
Business Days after deposit in the U.S. mail; any notice, if transmitted by
facsimile, shall be deemed given when transmitted; and any notice given by
overnight courier shall be deemed given when received by the addressee.
13.2. Change of Address. The Borrowers, the Agent and any Lender may
-----------------
each change the address for service of notice upon it by a notice in writing to
the other parties hereto.
ARTICLE XIV
BORROWER GUARANTY
-----------------
14.1. The Borrower hereby absolutely, irrevocably and
unconditionally guarantees prompt, full and complete payment when due, whether
at stated maturity, upon acceleration or otherwise, and at all times thereafter,
of (a) the principal of and interest on the Advances made by the Lenders to, and
the Notes held by the Lenders of, the Subsidiary Borrower and (b) all other
amounts from time to time owing to the Lenders by the Subsidiary Borrower under
this Agreement, the Notes and the other Loan Documents, including without
limitation all Obligations of the Subsidiary Borrower (solely for purposes of
this Article XIV, collectively referred to as the "Guaranteed Debt"). This is a
-----------
guaranty of payment, not a guaranty of collection.
14.2. The Borrower waives notice of the acceptance of this
Article XIV (solely for purposes of this Article XIV, referred to as the
----------- -----------
"Guaranty") and of the extension or incurrence of the Guaranteed Debt or any
part thereof. The Borrower further waives all setoffs and counterclaims and
presentment, protest, notice, filing of claims with a court in the event of
receivership, bankruptcy or reorganization of the Subsidiary Borrower, demand or
action on delinquency in respect of the Guaranteed Debt or any part thereof,
including any right to require the Agent or any Lender to xxx the Subsidiary
Borrower, or any other person obligated with respect to the Guaranteed
-49-
Debt or any part thereof, or otherwise to enforce payment thereof against any
collateral securing the Guaranteed Debt or any part thereof.
14.3. The Borrower hereby agrees that, to the fullest extent
permitted by law, its obligations hereunder shall be continuing, absolute and
unconditional under any and all circumstances and not subject to any reduction,
limitation, impairment, termination, defense (other than indefeasible payment in
full), setoff, counterclaim or recoupment whatsoever (all of which are hereby
expressly waived by it to the fullest extent permitted by law), whether by
reason of any claim of any character whatsoever, including, without limitation,
any claim of waiver, release, surrender, alteration or compromise. The validity
and enforceability of this Guaranty shall not be impaired or affected by any of
the following: (a) any extension, modification or renewal of, or indulgence with
respect to, or substitution for, the Guaranteed Debt or any part thereof or any
agreement relating thereto at any time; (b) any failure or omission to perfect
or maintain any lien on, or preserve rights to, any security or collateral or to
enforce any right, power or remedy with respect to the Guaranteed Debt or any
part thereof or any agreement relating thereto, or any collateral securing the
Guaranteed Debt or any part thereof; (c) any waiver of any right, power or
remedy or of any default with respect to the Guaranteed Debt or any part thereof
or any agreement relating thereto or with respect to any collateral securing the
Guaranteed Debt or any part thereof; (d) any release, surrender, compromise,
settlement, waiver, subordination or modification, with or without
consideration, of any collateral securing the Guaranteed Debt or any part
thereof, any other guaranties with respect to the Guaranteed Debt or any part
thereof, or any other obligations of any person or entity with respect to the
Guaranteed Debt or any part thereof; (e) the enforceability or validity of the
Guaranteed Debt or any part thereof or the genuineness, enforceability or
validity of any agreement relating thereto or with respect to any collateral
securing the Guaranteed Debt or any part thereof; (f) the application of
payments received from any source to the payment of indebtedness other than the
Guaranteed Debt, any part thereof or amounts which are not covered by this
Guaranty even though the Agent or any Lender might lawfully have elected to
apply such payments to any part or all of the Guaranteed Debt or to amounts
which are not covered by this Guaranty; (g) any change of ownership of the
Subsidiary Borrower or the insolvency, bankruptcy or any other change in the
legal status of the Subsidiary Borrower; (h) any change in, or the imposition
of, any law, decree, regulation or other governmental act which does or might
impair, delay or in any way affect the validity, enforceability or the payment
when due of the Guaranteed Debt; (i) the failure of the Subsidiary Borrower to
maintain in full force, validity or effect or to obtain or renew when required
all governmental and other approvals, licenses or consents required in
connection with the Guaranteed Debt or this Guaranty, or to take any other
action required in connection with the performance of all obligations pursuant
to the Guaranteed Debt or this Guaranty; (j) the existence of any claim, setoff
or other rights which the Borrower may have at any time against the Subsidiary
Borrower in connection herewith or with any unrelated transaction; (k) the
Agent's or a Lender's election, in any case or proceeding instituted under
chapter 11 of the Bankruptcy Code, of the application of section 1111(b)(2) of
the Bankruptcy Code; (l) any borrowing, use of cash collateral, or grant of a
security interest by the Subsidiary Borrower, as debtor in possession, under
section 363 or 364 of the Bankruptcy Code; (m) the disallowance of all or any
portion of the Agent's or a Lender's claims for repayment of the Guaranteed Debt
under section 502 or 506 of the Bankruptcy Code; or (n) any other fact or
circumstance which might otherwise constitute grounds at law or equity for the
discharge or release of the Borrower from its obligations hereunder, all whether
or not
-50-
the Borrower shall have had notice or knowledge of any act or omission referred
to in the foregoing clauses (a) through (n) of this paragraph. It is agreed that
----------------------
the Borrower's liability hereunder is independent of any other guaranties or
other obligations at any time in effect with respect to the Guaranteed Debt or
any part thereof and that the Borrower's liability hereunder may be enforced
regardless of the existence, validity, enforcement or non-enforcement of any
such other guaranties or other obligations or any provision of any applicable
law or regulation purporting to prohibit payment by the Subsidiary Borrower of
the Guaranteed Debt in the manner agreed upon between the Agent, the Lenders and
the Subsidiary Borrower.
14.4. Credit may be granted or continued from time to time by
the Agent and/or any Lender to the Subsidiary Borrower without notice to or
authorization from the Borrower regardless of the Subsidiary Borrower's
financial or other condition at the time of any such grant or continuation.
Neither the Agent nor any Lender shall have any obligation to disclose or
discuss with the Borrower its assessment of the financial condition of the
Subsidiary Borrower.
14.5. Until the irrevocable payment in full of the Obligations
and termination of all commitments which could give rise to any Obligation, the
Borrower shall have no right of subrogation with respect to the Guaranteed Debt
and hereby waives any right to enforce any remedy which the Agent and/or the
Lenders now has or may hereafter have against the Subsidiary Borrower, any
endorser or any other guarantor of all or any part of the Guaranteed Debt, and
the Borrower hereby waives any benefit of, and any right to participate in, any
security or collateral given to the Agent and/or the Lenders to secure payment
of the Guaranteed Debt or any part thereof or any other liability of the
Subsidiary Borrower to the Agent and/or the Lenders.
14.6. The Borrower authorizes the Agent and the Lenders to
take any action or exercise any remedy with respect to any collateral from time
to time securing the Guaranteed Debt, which the Agent and the Lenders in their
sole discretion (but subject, as applicable, to the terms of this Agreement and
of any documentation pursuant to which a Lien in such collateral is granted)
shall determine, without notice to the Borrower. Notwithstanding any reference
herein to any collateral securing any of the Guaranteed Debt, it is acknowledged
that, on the date hereof, neither the Borrower nor any of its Subsidiaries has
granted, or has any obligation to grant, any security interest in or other lien
on any of its property as security for the Guaranteed Debt.
14.7. In the event the Agent and/or the Lenders in their sole
discretion elects to give notice of any action with respect to any collateral
securing the Guaranteed Debt or any part thereof, ten (10) days' written notice
mailed to the Borrower by ordinary mail at the address shown hereon shall be
deemed reasonable notice of any matters contained in such notice. The Borrower
consents and agrees that neither the Agent nor any Lender shall be under any
obligation to xxxxxxxx any assets in favor of the Borrower or against or in
payment of any or all of the Guaranteed Debt.
14.8. In the event that acceleration of the time for payment
of any of the Guaranteed Debt is stayed upon the insolvency, bankruptcy or
reorganization of the Subsidiary Borrower, or otherwise, all such amounts shall
nonetheless be payable by the Borrower forthwith upon demand by Agent. The
Borrower further agrees that, to the extent that the Subsidiary Borrower makes a
payment or payments to the Agent or any Lender on the Guaranteed Debt, or the
Agent or a Lender
-51-
receive any proceeds of collateral securing the Guaranteed Debt, which payment
or receipt of proceeds or any part thereof is subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be returned or repaid
to the Subsidiary Borrower, its estate, trustee, receiver, debtor in possession
or any other party, including, without limitation, the Borrower, under any
insolvency or bankruptcy law, state or federal law, common law or equitable
cause, then to the extent of such payment, return or repayment, the obligation
or part thereof which has been paid, reduced or satisfied by such amount shall
be reinstated and continued in full force and effect as of the date when such
initial payment, reduction or satisfaction occurred.
14.9. No delay on the part of the Agent or any Lender in the
exercise of any right, power or remedy shall operate as a waiver thereof, and no
single or partial exercise by the Agent or any Lender of any right, power or
remedy shall preclude any further exercise thereof; nor shall any amendment,
supplement, modification or waiver of any of the terms or provisions of this
Guaranty be binding upon the Agent or any Lender, except as expressly set forth
in a writing duly signed and delivered by the Agent and the Lenders. The failure
by the Agent and/or the Lenders at any time or times hereafter to require strict
performance by the Subsidiary Borrower or the Borrower of any of the provisions,
warranties, terms and conditions contained in any promissory note, security
agreement, agreement, guaranty, instrument or document now or at any time or
times hereafter executed pursuant to the terms of, or in connection with, this
Agreement by the Subsidiary Borrower or the Borrower and delivered to the Agent
or any Lender shall not waive, affect or diminish any right of the Agent or any
Lender at any time or times hereafter to demand strict performance thereof, and
such right shall not be deemed to have been waived by any act or knowledge of
the Agent or any Lender, its agents, officers or employees, unless such waiver
is contained in an instrument in writing duly signed and delivered by the Agent
or such Lender. No waiver by the Agent or any Lender of any default shall
operate as a waiver of any other default or the same default on a future
occasion, and no action by the Agent or any Lender permitted hereunder shall in
any way affect or impair the Agent's or such Lender's rights or powers, or the
obligations of the Borrower under this Guaranty. Any determination by a court of
competent jurisdiction of the amount of any Guaranteed Debt owing by the
Subsidiary Borrower to the Agent and the Lenders shall be conclusive and binding
on the Borrower irrespective of whether the Borrower was a party to the suit or
action in which such determination was made.
14.10. Subject to the provisions of Section 14.8, this
------------
guaranty shall continue in effect until this Agreement has terminated, the
Guaranteed Debt has been paid in full and the other conditions of this guaranty
have been satisfied.
ARTICLE XV
SUBSIDIARY GUARANTY
-------------------
15.1. The Subsidiary Guarantor hereby absolutely, irrevocably
and unconditionally guarantees prompt, full and complete payment when due,
whether at stated maturity, upon acceleration or otherwise, and at all times
thereafter, of (a) the principal of and interest on the
-52-
Advances made by the Lenders to, and the Notes held by the Lenders of, the
Borrower and (b) all other amounts from time to time owing to the Lenders by the
Borrower under this Agreement, the Notes and the other Loan Documents, including
without limitation all Obligations of the Borrower (solely for purposes of this
Article XV, collectively referred to as the "Guaranteed Debt"). This is a
----------
guaranty of payment, not a guaranty of collection.
15.2. The Subsidiary Guarantor waives notice of the acceptance of this
Article XV (solely for purposes of this Article XV, referred to as the
---------- ----------
"Guaranty") and of the extension or incurrence of the Guaranteed Debt or any
part thereof. The Subsidiary Guarantor further waives all setoffs and
counterclaims and presentment, protest, notice, filing of claims with a court in
the event of receivership, bankruptcy or reorganization of the Borrower, demand
or action on delinquency in respect of the Guaranteed Debt or any part thereof,
including any right to require the Agent or any Lender to xxx the Borrower,
other person obligated with respect to the Guaranteed Debt or any part thereof,
or otherwise to enforce payment thereof against any collateral securing the
Guaranteed Debt or any part thereof.
15.3. The Subsidiary Guarantor hereby agrees that, to the fullest extent
permitted by law, its obligations hereunder shall be continuing, absolute and
unconditional under any and all circumstances and not subject to any reduction,
limitation, impairment, termination, defense (other than indefeasible payment in
full), setoff, counterclaim or recoupment whatsoever (all of which are hereby
expressly waived by it to the fullest extent permitted by law), whether by
reason of any claim of any character whatsoever, including, without limitation,
any claim of waiver, release, surrender, alteration or compromise. The validity
and enforceability of this Guaranty shall not be impaired or affected by any of
the following: (a) any extension, modification or renewal of, or indulgence with
respect to, or substitution for, the Guaranteed Debt or any part thereof or any
agreement relating thereto at any time; (b) any failure or omission to perfect
or maintain any lien on, or preserve rights to, any security or collateral or to
enforce any right, power or remedy with respect to the Guaranteed Debt or any
part thereof or any agreement relating thereto, or any collateral securing the
Guaranteed Debt or any part thereof; (c) any waiver of any right, power or
remedy or of any default with respect to the Guaranteed Debt or any part thereof
or any agreement relating thereto or with respect to any collateral securing the
Guaranteed Debt or any part thereof; (d) any release, surrender, compromise,
settlement, waiver, subordination or modification, with or without
consideration, of any collateral securing the Guaranteed Debt or any part
thereof, any other guaranties with respect to the Guaranteed Debt or any part
thereof, or any other obligations of any person or entity with respect to the
Guaranteed Debt or any part thereof; (e) the enforceability or validity of the
Guaranteed Debt or any part thereof or the genuineness, enforceability or
validity of any agreement relating thereto or with respect to any collateral
securing the Guaranteed Debt or any part thereof; (f) the application of
payments received from any source to the payment of indebtedness other than the
Guaranteed Debt, any part thereof or amounts which are not covered by this
Guaranty even though the Agent or any Lender might lawfully have elected to
apply such payments to any part or all of the Guaranteed Debt or to amounts
which are not covered by this Guaranty; (g) any change of ownership of the
Borrower or the insolvency, bankruptcy or any other change in the legal status
of the Borrower; (h) any change in, or the imposition of, any law, decree,
regulation or other governmental act which does or might impair, delay or in any
way affect the validity, enforceability or the payment when due of the
Guaranteed Debt; (i) the failure of the Borrower to maintain in full
-53-
force, validity or effect or to obtain or renew when required all governmental
and other approvals, licenses or consents required in connection with the
Guaranteed Debt or this Guaranty, or to take any other action required in
connection with the performance of all obligations pursuant to the Guaranteed
Debt or this Guaranty; (j) the existence of any claim, setoff or other rights
which the Subsidiary Borrower may have at any time against the Borrower in
connection herewith or with any unrelated transaction; (k) the Agent's or a
Lender's election, in any case or proceeding instituted under chapter 11 of the
Bankruptcy Code, of the application of section 1111(b)(2) of the Bankruptcy
Code; (l) any borrowing, use of cash collateral, or grant of a security interest
by the Borrower, as debtor in possession, under section 363 or 364 of the
Bankruptcy Code; (m) the disallowance of all or any portion of the Agent's or a
Lender's claims for repayment of the Guaranteed Debt under section 502 or 506 of
the Bankruptcy Code; or (n) any other fact or circumstance which might otherwise
constitute grounds at law or equity for the discharge or release of the
Subsidiary Guarantor from its obligations hereunder, all whether or not the
Subsidiary Guarantor shall have had notice or knowledge of any act or omission
referred to in the foregoing clauses (a) through (n) of this paragraph. It is
-----------------------
agreed that the Subsidiary Guarantor's liability hereunder is independent of any
other guaranties or other obligations at any time in effect with respect to the
Guaranteed Debt or any part thereof and that the Subsidiary Guarantor's
liability hereunder may be enforced regardless of the existence, validity,
enforcement or non-enforcement of any such other guaranties or other obligations
or any provision of any applicable law or regulation purporting to prohibit
payment by the Borrower of the Guaranteed Debt in the manner agreed upon between
the Agent, the Lenders and the Borrower.
15.4. Credit may be granted or continued from time to time by the Agent
and/or any Lender to the Borrower without notice to or authorization from the
Subsidiary Guarantor regardless of the Borrower's financial or other condition
at the time of any such grant or continuation. Neither the Agent nor any Lender
shall have any obligation to disclose or discuss with the Subsidiary Guarantor
its assessment of the financial condition of the Borrower.
15.5. Until the irrevocable payment in full of the Obligations and
termination of all commitments which could give rise to any Obligation, the
Subsidiary Guarantor shall not have any right of subrogation with respect to the
Guaranteed Debt and hereby waives any right to enforce any remedy which the
Agent and/or any Lender now has or may hereafter have against the Borrower, any
endorser or any other guarantor of all or any part of the Guaranteed Debt, and
the Borrower hereby waives any benefit of, and any right to participate in, any
security or collateral given to the Agent and/or the Lenders to secure payment
of the Guaranteed Debt or any part thereof or any other liability of the
Borrower to the Agent and/or the Lenders.
5.6. The Subsidiary Guarantor authorizes the Agent and the Lenders to take
any action or exercise any remedy with respect to any collateral from time to
time securing the Guaranteed Debt, which the Agent and Lenders in their sole
discretion (but subject, as applicable, to the terms of this Agreement and of
any documentation pursuant to which a Lien in such collateral is granted) shall
determine, without notice to the Subsidiary Borrower. Notwithstanding any
reference herein to any collateral securing any of the Guaranteed Debt, it is
acknowledged that, on the date hereof, neither the Borrower nor any of its
Subsidiaries has granted, or has any obligation
-54-
to grant, any security interest in or other lien on any of its property as
security for the Guaranteed Debt.
15.7. In the event the Agent and/or the Lenders in their sole discretion
elects to give notice of any action with respect to any collateral securing the
Guaranteed Debt or any part thereof, ten (10) days' written notice mailed to the
Subsidiary Guarantor by ordinary mail at the address shown hereon shall be
deemed reasonable notice of any matters contained in such notice. The Subsidiary
Borrower consents and agrees that neither the Agent nor any Lender shall be
under any obligation to xxxxxxxx any assets in favor of the Subsidiary Borrower
or against or in payment of any or all of the Guaranteed Debt.
15.8. In the event that acceleration of the time for payment of any of the
Guaranteed Debt is stayed upon the insolvency, bankruptcy or reorganization of
the Borrower, or otherwise, all such amounts shall nonetheless be payable by the
Subsidiary Guarantor forthwith upon demand by the Agent. The Subsidiary
Guarantor further agrees that, to the extent that the Borrower makes a payment
or payments to the Agent or any Lender on the Guaranteed Debt, or the Agent or a
Lender receive any proceeds of collateral securing the Guaranteed Debt, which
payment or receipt of proceeds or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be returned
or repaid to the Borrower, its estate, trustee, receiver, debtor in possession
or any other party, including, without limitation, the Subsidiary Borrower,
under any insolvency or bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such payment, return or repayment, the
obligation or part thereof which has been paid, reduced or satisfied by such
amount shall be reinstated and continued in full force and effect as of the date
when such initial payment, reduction or satisfaction occurred.
15.9. No delay on the part of the Agent or any Lender in the exercise of
any right, power or remedy shall operate as a waiver thereof, and no single or
partial exercise by the Agent or any Lender of any right, power or remedy shall
preclude any further exercise thereof; nor shall any amendment, supplement,
modification or waiver of any of the terms or provisions of this Guaranty be
binding upon the Agent or any Lender, except as expressly set forth in a writing
duly signed and delivered by the Agent and the Lenders. The failure by the Agent
or any Lender at any time or times hereafter to require strict performance by
the Subsidiary Borrower or the Borrower of any of the provisions, warranties,
terms and conditions contained in any promissory note, security agreement,
agreement, guaranty, instrument or document now or at any time or times
hereafter executed pursuant to the terms of, or in connection with, this
Agreement by the Subsidiary Borrower or the Borrower and delivered to the Agent
or any Lender shall not waive, affect or diminish any right of the Agent or any
Lender at any time or times hereafter to demand strict performance thereof, and
such right shall not be deemed to have been waived by any act or knowledge of
the Agent or any Lender, its agents, officers or employees, unless such waiver
is contained in an instrument in writing duly signed and delivered by the Agent
or such Lender. No waiver by the Agent or any Lender of any default shall
operate as a waiver of any other default or the same default on a future
occasion, and no action by the Agent or any Lender permitted hereunder shall in
any way affect or impair the Agent or such Lender's rights or powers, or the
obligations of the Subsidiary Guarantor under this Guaranty. Any determination
by a court of competent jurisdiction of the amount of any Guaranteed Debt owing
by the Borrower or the Subsidiary Borrower to the Agent and the Lenders shall be
-55-
conclusive and binding on the Subsidiary Guarantor irrespective of whether the
Subsidiary Borrower was a party to the suit or action in which such
determination was made.
15.10. Subject to the provisions of Section 15.8, this guaranty shall
------------
continue in effect until this Agreement has terminated, the Guaranteed Debt has
been paid in full and the other conditions of this guaranty have been satisfied.
ARTICLE XVI
SALE OF SUBSIDIARY BORROWER
---------------------------
16.1. In addition to the transactions permitted by Section 6.12(d), the
---------------
Borrower may at any time sell, transfer or otherwise dispose of 100% of the
capital stock of the Subsidiary Borrower in a single transaction so long as (a)
no Loans attributable to the Subsidiary Borrower are outstanding on the date of
the consummation of such transaction, (b) no Default or Unmatured Default
exists, (c) the Borrower shall have delivered written notice to the Lenders at
least 15 days prior to the date of the consummation of such transaction and (d)
the Subsidiary Borrower shall have delivered a certificate (in form and
substance acceptable to the Agent and executed by an Authorized Officer) to the
Agent on, and dated, the date of the consummation of such transaction (i)
stating that it relinquishes its rights to request Loans under this Agreement
and (ii) confirming that the Subsidiary Borrower has paid in full all amounts
then due and owing to any Lender under Sections 3.5 or 9.7 and under Section 15
------------ --- ----------
to the extent the Borrower incurred Obligations of the type described in
Sections 3.5 or 9.7 on or prior the date of the consummation of such
transaction. Upon the delivery of such certificate, the Subsidiary Borrower
shall cease to be one of the Borrowers hereunder and shall have no rights,
duties or obligations under this Agreement and references to the Subsidiary
Borrower as such in this Agreement shall be deemed to be deleted.
[signature pages to follow]
-56-
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have executed
this Agreement as of the date first above written.
FUND AMERICAN ENTERPRISES HOLDINGS, INC.
By:
--------------------------------------
Print Name:
------------------------------
Title:
-----------------------------------
Address: 00 Xxxxx Xxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxxxxx
Attn:
-----------------
Fax No.:
---------------------------
Tel. No.:
--------------------------
FUND AMERICAN ENTERPRISES, INC.
By:
--------------------------------------
Print Name:
------------------------------
Title:
-----------------------------------
Address: 00 Xxxxx Xxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxxxxx
Attn:
-----------------
Fax No.:
---------------------------
Tel. No.:
--------------------------
-57-
Commitments
-----------
THE FIRST NATIONAL BANK OF CHICAGO,
Commitment $ Individually and as Agent
--------------
By:
---------------------------------
Print Name:
-------------------------
Title:
------------------------------
Address: 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
First Vice President
Fax No.: (000) 000-0000
Tel. No.: (000) 000-0000
$ [OTHER LENDERS]
--------------
--------------
Aggregate Initial
Commitment $
==============
-58-
