EXHIBIT 99(b)
EXECUTION COPY
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AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT
made by
FUND AMERICAN ENTERPRISES HOLDINGS, INC. (f/k/a TACK HOLDING CORP.),
FUND AMERICAN COMPANIES, INC. (f/k/a TACK ACQUISITION CORP.)
and certain of its Subsidiaries
in favor of
XXXXXX COMMERCIAL PAPER INC.,
as Administrative Agent
Dated as of October 30, 2002
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TABLE OF CONTENTS
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SECTION 1. DEFINED TERMS....................................................................................2
1.1 DEFINITIONS.....................................................................................2
1.2 OTHER DEFINITIONAL PROVISIONS...................................................................6
SECTION 2. GUARANTEE........................................................................................6
2.1 GUARANTEE.......................................................................................6
2.2 RIGHT OF CONTRIBUTION...........................................................................7
2.3 NO SUBROGATION..................................................................................7
2.4 AMENDMENTS, ETC. WITH RESPECT TO THE BORROWER OBLIGATIONS.......................................8
2.5 GUARANTEE ABSOLUTE AND UNCONDITIONAL............................................................8
2.6 REINSTATEMENT...................................................................................9
2.7 PAYMENTS........................................................................................9
SECTION 3. GRANT OF SECURITY INTEREST.......................................................................9
SECTION 4. REPRESENTATIONS AND WARRANTIES..................................................................10
4.1 REPRESENTATIONS IN CREDIT AGREEMENT............................................................10
4.2 TITLE; NO OTHER LIENS..........................................................................10
4.3 PERFECTED FIRST PRIORITY LIENS.................................................................10
4.4 JURISDICTION AND OFFICIAL IDENTIFICATION NUMBER................................................10
4.5 PLEDGED STOCK..................................................................................10
4.6 INTELLECTUAL PROPERTY..........................................................................11
SECTION 5. COVENANTS.......................................................................................11
5.1 COVENANTS IN CREDIT AGREEMENT..................................................................11
5.2 DELIVERY OF INSTRUMENTS AND CHATTEL PAPER; CERTIFICATED SECURITIES.............................11
5.3 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER DOCUMENTATION..............................12
5.4 CHANGES IN NAME, ETC...........................................................................12
5.5 NOTICES........................................................................................12
5.6 INVESTMENT PROPERTY............................................................................13
5.7 INTELLECTUAL PROPERTY..........................................................................14
SECTION 6. REMEDIAL PROVISIONS.............................................................................15
6.1 PLEDGED STOCK..................................................................................15
6.2 PROCEEDS TO BE TURNED OVER TO ADMINISTRATIVE AGENT.............................................16
6.3 APPLICATION OF PROCEEDS........................................................................16
6.4 CODE AND OTHER REMEDIES........................................................................17
6.5 REGISTRATION RIGHTS............................................................................18
6.6 WAIVER; DEFICIENCY.............................................................................19
SECTION 7. THE ADMINISTRATIVE AGENT........................................................................19
7.1 ADMINISTRATIVE AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT, ETC....................................19
7.2 DUTY OF ADMINISTRATIVE AGENT...................................................................21
7.3 EXECUTION OF FINANCING STATEMENTS..............................................................21
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7.4 AUTHORITY OF ADMINISTRATIVE AGENT..............................................................21
SECTION 8. MISCELLANEOUS...................................................................................21
8.1 AMENDMENTS IN WRITING..........................................................................21
8.2 NOTICES........................................................................................22
8.3 NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES............................................22
8.4 ENFORCEMENT EXPENSES; INDEMNIFICATION..........................................................22
8.5 SUCCESSORS AND ASSIGNS.........................................................................22
8.6 SET-OFF........................................................................................23
8.7 COUNTERPARTS...................................................................................23
8.8 SEVERABILITY...................................................................................23
8.9 SECTION HEADINGS...............................................................................23
8.10 INTEGRATION....................................................................................23
8.11 GOVERNING LAW..................................................................................23
8.12 ACTION REQUIRING APPROVAL......................................................................23
8.13 SUBMISSION TO JURISDICTION; WAIVERS............................................................24
8.14 ACKNOWLEDGEMENTS...............................................................................25
8.15 ADDITIONAL GRANTORS............................................................................25
8.16 RELEASES.......................................................................................25
8.17 WAIVER OF JURY TRIAL...........................................................................26
SECTION 9. Patent and Trademark Filings.....................................................................8
SECTION 10. Actions with respect to Pledged Stock...........................................................8
SECTION 11. Other Actions...................................................................................8
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Schedules
Schedule 1 Notice Addresses of Guarantors
Schedule 2 Description of Pledged Stock
Schedule 3 Filings and Other Actions Required to Perfect Security Interest
Schedule 4 Jurisdiction of Incorporation and Location of Chief Executive Office
Schedule 5 Intellectual Property
Schedule 6 Existing Prior Liens
Annexes
Annex I Assumption Agreement
Annex II Acknowledgment and Consent
iii
AMENDED AND RESTATED
GUARANTEE AND COLLATERAL AGREEMENT, dated as of
October 30, 2002, made by each of the signatories hereto (together with any
other entity that may become a party hereto as provided herein, the "GRANTORS"),
in favor of XXXXXX COMMERCIAL PAPER INC., as Administrative Agent (in such
capacity, the "ADMINISTRATIVE AGENT") for the banks and other financial
institutions (the "LENDERS") from time to time parties to the Amended and
Restated Credit Agreement, dated as of October 30, 2002 (as amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among FUND AMERICAN ENTERPRISES HOLDINGS, INC. (f/k/a TACK HOLDING CORP.), a
Delaware corporation (the "PARENT"), FUND AMERICAN COMPANIES, INC. (f/k/a TACK
ACQUISITION CORP.), a Delaware corporation (the "BORROWER"), the Lenders, XXXXXX
BROTHERS INC., as Arranger, FLEET NATIONAL BANK, as Syndication Agent, BANK OF
AMERICA, N.A. and BANK ONE, NA, as Co-Documentation Agent and the Administrative
Agent.
W I T N E S S E T H:
WHEREAS, the Parent and the Borrower are parties to the Credit
Agreement, dated as of March 16, 2001 (as amended the "EXISTING CREDIT
AGREEMENT"), which is being amended and restated by the Credit Agreement;
WHEREAS, pursuant to the Existing Credit Agreement, the Parent and the
Borrower executed and delivered the
Guarantee and Collateral Agreement, dated as
of June 12, 2001 (as amended, the "EXISTING
GUARANTEE AND COLLATERAL
AGREEMENT");
WHEREAS, pursuant to the Existing Credit Agreement the Lenders have
severally made extensions of credit to the Borrower, and pursuant to the Credit
Agreement the Lenders have severally agreed to make additional extensions of
credit to the Borrower and to continue certain extensions of credit previously
made pursuant to the Existing Credit Agreement, in each case upon the terms and
subject to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of companies
that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the Credit
Agreement have been used and will be used in part to enable the Borrower to make
valuable transfers to one or more of the other Grantors in connection with the
operation of their respective businesses;
WHEREAS, the Borrower and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreement; and
WHEREAS, it is a condition precedent to the effectiveness of the
Credit Agreement and to the obligation of the Lenders to make their respective
extensions of credit to the Borrower under the Credit Agreement that the
Existing
Guarantee and Collateral Agreement shall have amended and restated as
provided herein;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the
Lenders to make their respective extensions of credit to the Borrower
thereunder, the parties hereto agree that the Existing
Guarantee and Collateral
Agreement is hereby amended and restated in its entirety as follows:
SECTION 1. DEFINED TERMS
1.1 DEFINITIONS. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement and the following terms which are defined in the Uniform
Commercial Code in effect in the State of
New York on the date hereof are used
herein as so defined: Accounts, Certificated Security, Chattel Paper, Documents,
General Intangibles and Instruments.
(b) The following terms shall have the following meanings:
"AGREEMENT": this Amended and Restated
Guarantee and Collateral
Agreement, as the same may be amended, supplemented or otherwise modified
from time to time.
"APPLICABLE INSURANCE REGULATORY AUTHORITY": with respect to any
Insurance Subsidiary, the insurance department or similar administrative
authority or agency located in (a) each state in which such Insurance
Subsidiary is domiciled or (b) to the extent asserting regulatory
jurisdiction over such Insurance Subsidiary, the insurance department,
authority or agency in each state in which such Insurance Subsidiary is
licensed, and shall include any Federal insurance regulatory department,
authority or agency that may be created and that asserts regulatory
jurisdiction over such Insurance Subsidiary.
"BORROWER CREDIT AGREEMENT OBLIGATIONS": the collective reference to
the unpaid principal of and interest on the Loans made to the Borrower and
Reimbursement Obligations in respect of Letters of Credit issued for the
account of the Borrower and all other obligations and liabilities of the
Borrower (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of such
Loans and Reimbursement Obligations and interest accruing at the then
applicable rate provided in the Credit Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding) to the Administrative Agent or any Lender, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with,
the Credit Agreement, this Agreement, or the other Loan Documents, or any
Letter of Credit issued for the account of the Borrower, or any other
document made, delivered or given in connection therewith, in each case
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation,
all fees and disbursements of counsel to the Administrative Agent or to the
Lenders that are required to be paid by the Borrower pursuant to the terms
of any of the foregoing agreements).
"BORROWER HEDGE AGREEMENT OBLIGATIONS": the collective reference to
all obligations and liabilities of the Borrower (including, without
limitation, interest accruing at the then applicable rate provided in any
Specified Hedge Agreement after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to any Lender or any
affiliate of any Lender, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, any Specified Hedge
Agreement or any other document made, delivered or given in connection
therewith, in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to
the relevant Lender or affiliate thereof that are required to be paid by
the Borrower pursuant to the terms of any Specified Hedge Agreement).
"BORROWER OBLIGATIONS": the collective reference to (i) the Borrower
Credit Agreement Obligations, (ii) the Borrower Hedge Agreement
Obligations, but only to the extent that, and only so long as, the Borrower
Credit Agreement Obligations are secured and guaranteed pursuant hereto,
and (iii) all other obligations and liabilities of the Borrower, whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in
connection with, this Agreement (including, without limitation, all fees
and disbursements of counsel to the Administrative Agent or to the Lenders
that are required to be paid by the Borrower pursuant to the terms of this
Agreement).
"COLLATERAL": with respect to each Grantor, all of the following in
which such Grantor now has or may hereafter acquire any right, title or
interest: (a) all Accounts; (b) all Chattel Paper; (c) all Documents; (d)
all General Intangibles; (e) all Instruments; (f) all Intellectual
Property; (g) all Investment Property; (h) all books and records pertaining
to any of the foregoing; and (i) to the extent not otherwise included, all
Proceeds and products of any and all of the foregoing and all collateral
security and guarantees given by any Person with respect to any of the
foregoing; PROVIDED, that the Collateral shall not include the Excluded
Assets.
"COLLATERAL ACCOUNT": any collateral account established by the
Administrative Agent as provided in Section 6.2.
"COPYRIGHTS": (i) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished (including,
without limitation, those listed in SCHEDULE 5), all registrations and
recordings thereof, and all applications in connection therewith,
including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, and (ii) the right to
obtain all renewals thereof.
"COPYRIGHT LICENSES": any written agreement naming any Grantor as
licensor or licensee (including, without limitation, those listed in
SCHEDULE 5), granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright.
"EXCLUDED ASSETS": any contract, General Intangible, Copyright
License, Patent License or Trademark License ("INTANGIBLE ASSETS"), in each
case to the extent the grant by the relevant Grantor of a security interest
pursuant to this Agreement in such Grantor's right, title and interest in
such Intangible Asset (i) is prohibited by any contract, agreement,
instrument or indenture governing such Intangible Asset, (ii) would give
any other party to such contract, agreement, instrument or indenture the
right to terminate its obligations thereunder or (iii) is permitted only
with the consent of another party, if such consent has not been obtained;
PROVIDED, that any Receivable or any money or other amounts due or to
become due under any such contract, agreement, instrument or indenture
shall not be Excluded Assets.
"FOREIGN SUBSIDIARY": any Subsidiary organized under the laws of any
jurisdiction outside the United States of America.
"FOREIGN SUBSIDIARY VOTING STOCK": the voting Capital Stock of any
Foreign Subsidiary.
"GENERAL INTANGIBLES": all "general intangibles" as such term is
defined in Section 9-106 of the Uniform Commercial Code in effect in the
State of
New York on the date hereof.
"GUARANTOR OBLIGATIONS": with respect to any Guarantor, all
obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement (including, without limitation, Section 2)
or any other Loan Document to which such Guarantor is a party, in each case
whether on account of guarantee obligations, reimbursement obligations,
fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative
Agent or to the Lenders that are required to be paid by such Guarantor
pursuant to the terms of this Agreement or any other Loan Document).
"GUARANTORS": the collective reference to each Grantor in its capacity
as a guarantor under Section 2.
"HEDGE AGREEMENTS": as to any Person, all interest rate swaps,
currency exchange agreements, commodity swaps, caps or collar agreements or
similar arrangements entered into by such Person providing for protection
against fluctuations in interest rates, currency exchange rates or
commodity prices or the exchange of nominal interest obligations, either
generally or under specific contingencies.
"INVESTMENT PROPERTY": the collective reference to (i) all "investment
property" as such term is defined in Section 9-115 of the
New York UCC
(other than any Foreign Subsidiary Voting Stock excluded from the
definition of "Pledged Stock") and (ii) whether or not constituting
"investment property" as so defined, all Pledged Stock.
"INTELLECTUAL PROPERTY": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, the Copyrights, the Copyright Licenses, the
Patents, the Patent Licenses, the Trademarks and the
Trademark Licenses, and all rights to xxx at law or in equity for any
infringement or other impairment thereof, including the right to receive
all proceeds and damages therefrom.
"ISSUERS": the collective reference to each issuer of Pledged Stock.
"
NEW YORK UCC": the Uniform Commercial Code as from time to time in
effect in the State of
New York.
"OBLIGATIONS": (i) in the case of the Borrower, the Borrower
Obligations and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"PATENTS": (i) all letters patent of the United States, any other
country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, including, without
limitation, any of the foregoing referred to in SCHEDULE 5, (ii) all
applications for letters patent of the United States or any other country
and all divisions, continuations and continuations-in-part thereof,
including, without limitation, any of the foregoing referred to in SCHEDULE
5, and (iii) all rights to obtain any reissues or extensions of the
foregoing.
"PATENT LICENSE": all agreements, whether written or oral, providing
for the grant by or to any Grantor of any right to manufacture, use or sell
any invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in SCHEDULE 5.
"PLEDGED STOCK": the shares of Capital Stock listed on SCHEDULE 2,
together with any other shares, stock certificates, options or rights of
any nature whatsoever in respect of the Capital Stock of any Non-Insurance
Subsidiary (other than A.W.G. Xxxxx, Inc.) or first-tier Insurance
Subsidiary that may be issued or granted to, or held by, any Grantor while
this Agreement is in effect; PROVIDED that in no event shall more than 66%
of the total outstanding Foreign Subsidiary Voting Stock of any Foreign
Subsidiary be required to be pledged hereunder.
"PROCEEDS": all "proceeds" as such term is defined in Section 9-306(1)
of the Uniform Commercial Code in effect in the State of
New York on the
date hereof and, in any event, including, without limitation, all dividends
or other income from the Pledged Stock, collections thereon or
distributions or payments with respect thereto.
"RECEIVABLE": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"SECURITIES ACT": the Securities Act of 1933, as amended.
"SPECIFIED HEDGE AGREEMENT": any Hedge Agreement entered into by (i)
the Borrower or any of its Subsidiaries and (ii) any Lender or any
affiliate thereof, as counterparty.
"TRADEMARKS": (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and all
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, including, without
limitation, any of the foregoing referred to in SCHEDULE 5, and (ii) the
right to obtain all renewals thereof.
"TRADEMARK LICENSE": any agreement, whether written or oral, providing
for the grant by or to any Grantor of any right to use any Trademark,
including, without limitation, any of the foregoing referred to in SCHEDULE
5.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Grantor, shall refer to such
Grantor's Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 GUARANTEE. (a) The Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantee to the Administrative Agent, for the
ratable benefit of the Lenders (and any affiliates of any Lender to which
Obligations in respect of any Specified Hedge Agreement are owing) and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Borrower Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations may at any
time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or
affecting the rights and remedies of the Administrative Agent or any Lender
hereunder.
(d) The guarantee contained in this Section 2 shall remain in full
force and effect until all the Borrower Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full, no Letter of Credit shall be outstanding and the
Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement the Borrower may be free from the Borrower
Obligations.
(e) No payment made by the Borrower, any of the Guarantors, any
other guarantor or any other Person or received or collected by the
Administrative Agent or any Lender from the Borrower, any of the Guarantors, any
other guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations are paid in
full, no Letter of Credit shall be outstanding and the Commitments are
terminated.
2.2 RIGHT OF CONTRIBUTION. Each Subsidiary Guarantor hereby agrees
that to the extent that a Subsidiary Guarantor shall have paid more than its
proportionate share of any payment made hereunder in respect of the Borrower
Obligations (or Guarantor Obligations with respect to Borrower Obligations),
such Subsidiary Guarantor shall be entitled to seek and receive contribution
from and against any other Subsidiary Guarantor hereunder which has not paid its
proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 2.3. The provisions of
this Section 2.2 shall in no respect limit the obligations and liabilities of
any Guarantor to the Administrative Agent and the Lenders, and each Guarantor
shall remain liable to the Administrative Agent and the Lenders for the full
amount guaranteed by such Guarantor hereunder.
2.3 NO SUBROGATION. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agent or any Lender for
the payment of the Borrower Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from the Borrower or any
other Guarantor in respect of payments made by such Guarantor hereunder, until
all amounts owing to the Administrative Agent and the Lenders by the Borrower on
account of the Borrower Obligations are paid in full, no Letter of Credit shall
be outstanding and the Commitments are terminated. If any amount shall be paid
to any Guarantor on account of such subrogation rights at any time when all of
the Borrower Obligations shall not have been paid in full, such amount shall be
held by such Guarantor in trust for the Administrative Agent and the Lenders,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to the Administrative Agent in the exact form
received by such Guarantor (duly indorsed by such Guarantor to the
Administrative Agent, if required), to be applied against the Borrower
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.
2.4 AMENDMENTS, ETC. WITH RESPECT TO THE BORROWER OBLIGATIONS. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by the Administrative Agent or any Lender may be rescinded by
the Administrative Agent or such Lender and any of the Borrower Obligations
continued, and the Borrower Obligations, or the liability of any other Person
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Lender, and the
Credit Agreement and the other Loan Documents and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders or all Lenders, as the case may be) may deem advisable from time to
time, and any collateral security, guarantee or right of offset at any time held
by the Administrative Agent or any Lender for the payment of the Borrower
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Borrower Obligations or for the guarantee contained in this Section 2 or any
property subject thereto.
2.5 GUARANTEE ABSOLUTE AND UNCONDITIONAL. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations and notice of or proof of reliance by the Administrative
Agent or any Lender upon the guarantee contained in this Section 2 or acceptance
of the guarantee contained in this Section 2; the Borrower Obligations, and any
of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee contained in this Section 2; and all dealings between the Borrower and
any of the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, likewise shall be conclusively presumed to have been
had or consummated in reliance upon the guarantee contained in this Section 2.
Each Guarantor waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the Borrower or any of the Guarantors
with respect to the Borrower Obligations. Each Guarantor understands and agrees
that the guarantee contained in this Section 2 shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to
(1) the validity or enforceability of the Credit Agreement or any other Loan
Document, any of the Borrower Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by the Administrative Agent or any Lender, (2) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower or any other Person against the Administrative Agent or any Lender, or
(3) any other circumstance whatsoever (with or without notice to or knowledge of
the Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for its Borrower
Obligations or of such Guarantor under the guarantee contained in this Section
2, in bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against
any Guarantor, the Administrative Agent or any Lender may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against the Borrower, any other Guarantor or any other
Person or against any collateral security or guarantee for the Borrower
Obligations or any right of offset with respect thereto, and any failure by the
Administrative Agent or any Lender to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Borrower, any other
Guarantor or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Administrative Agent or any Lender against any Guarantor. For the purposes
hereof "demand" shall include the commencement and continuance of any legal
proceedings.
2.6 REINSTATEMENT. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent or any Lender
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
2.7 PAYMENTS. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the Payment Office specified in the Credit Agreement.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby (i) confirms that pursuant to the Existing
Guarantee and Collateral Agreement such Grantor has assigned and transferred to
the Administrative Agent, and granted to the Administrative Agent, for the
ratable benefit of the Lenders (and any affiliates of any Lender to which
Obligations in respect of any Specified Hedge Agreement are owing), a security
interest in, all Collateral now owned or at any time hereafter acquired by such
Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest, as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor's Obligations and (ii) assigns and
transfers to the Administrative Agent, and grants to the Administrative Agent,
for the ratable benefit of the Lenders (and any affiliates of any Lender to
which Obligations in respect of any Specified Hedge Agreement are owing), a
security interest in, all Collateral now owned or at any time hereafter acquired
by such Grantor or in which such Grantor now has or at any time in the future
may acquire any right, title or interest, as collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of such Grantor's Obligations.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrower thereunder, each Grantor hereby represents and
warrants to the Administrative Agent and each Lender that:
4.1 REPRESENTATIONS IN CREDIT AGREEMENT. (a) In the case of each
Guarantor, the representations and warranties set forth in Section 4 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby incorporated herein by
reference, are true and correct, and the Administrative Agent and each Lender
shall be entitled to rely on each of them as if they were fully set forth
herein, provided that each reference in each such representation and warranty to
the Borrower's knowledge shall, for the purposes of this Section 4.1, be deemed
to be a reference to such Guarantor's knowledge.
4.2 TITLE; NO OTHER LIENS. Each Grantor has title in fee simple to,
or a valid leasehold interest in, all its real property, and good title to, or a
valid leasehold interest in, all its other Property, and none of such Property
is subject to any Lien except as permitted by Section 7.3 of the Credit
Agreement, except to the extent such defects in title could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
4.3 PERFECTED FIRST PRIORITY LIENS. This Agreement is effective to
create in favor of the Administrative Agent, for the ratable benefit of the
Lenders, a valid and enforceable security interest in the Collateral. In the
case of the Pledged Stock, when any stock certificates representing such Pledged
Stock are delivered to the Administrative Agent and, in the case of the other
Collateral, when financing statements in appropriate form are filed in the
offices specified on Schedule 3 (which financing statements have been duly
completed and executed and delivered to the Administrative Agent) and such other
filings as are specified on Schedule 3 have been completed (all documents
required for which filings have been duly completed and executed and delivered
to the Administrative Agent), this Agreement shall constitute a perfected Lien
on, and security interest in, all right, title and interest of the Grantors in
such Collateral and the proceeds thereof, as security for the Obligations, in
each case to the extent that such security interest can be perfected by the
delivery of stock certificates and other instruments with effective
indorsements, the filing of UCC financing statements, and filings in respect of
Intellectual Property in the United States Patent and Trademarks Office.
4.4 JURISDICTION AND OFFICIAL IDENTIFICATION NUMBER. On the date
hereof, such Grantor's jurisdiction of organization and the official
identification number are specified on SCHEDULE 4.
4.5 PLEDGED STOCK. (a) The shares of Pledged Stock pledged by such
Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Foreign Subsidiary Voting Stock, if less, 65% of the outstanding Foreign
Subsidiary Voting Stock of each relevant Issuer.
(b) All the shares of the Pledged Stock pledged by such Grantor
hereunder have been duly and validly issued and are fully paid and
nonassessable.
(c) Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Investment Property pledged by it hereunder, free
of any and all Liens or options in favor of, or claims of, any other Person,
except the security interest created by this Agreement.
4.6 INTELLECTUAL PROPERTY. (a) SCHEDULE 5 lists all Intellectual
Property owned by such Grantor in its own name on the date hereof.
(b) On the date hereof, all material Intellectual Property of such
Grantor described on SCHEDULE 5 is valid, subsisting, unexpired and enforceable,
has not been abandoned and does not infringe the intellectual property rights of
any other Person.
(c) Except as set forth in SCHEDULE 5, on the date hereof, none of
the Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor.
(d) Each Grantor owns, or is licensed to use, all Intellectual
Property necessary for the conduct of its business as currently conducted. No
material claim has been asserted or is pending by any Person challenging or
questioning the use of any Intellectual Property or the validity or
effectiveness of any Intellectual Property, nor does any Grantor know of any
valid basis for any such claim. The use of Intellectual Property by each Grantor
does not infringe on the rights of any person in any material respect. It is
understood that the Borrower and its Subsidiaries will be permitted to use the
CGU name and related tradenames for (i) with respect to Insurance Subsidiaries,
a period of eighteen months after the Closing Date (with conditional six-month
extensions through September 24, 2005 in jurisdictions where regulatory approval
for name changes has not been received) but not thereafter and (ii) with respect
to Non-Insurance Subsidiaries, a period of 180 days after the Closing Date but
not thereafter.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Administrative Agent and
the Lenders that, from and after the date of this Agreement until the
Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Commitments shall have terminated:
5.1 COVENANTS IN CREDIT AGREEMENT. In the case of each Guarantor,
such Guarantor shall take, or shall refrain from taking, as the case may be,
each action that is necessary to be taken or not taken, as the case may be, so
that no Default or Event of Default is caused by the failure to take such action
or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.
5.2 DELIVERY OF INSTRUMENTS AND CHATTEL PAPER; CERTIFICATED
SECURITIES. If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any Instrument, Certificated Security
or Chattel Paper, such Instrument, Certificated Security or Chattel Paper shall
be delivered to the Administrative Agent with reasonable promptness, duly
indorsed in blank by an effective indorsement that is undated (unless the
Administrative Agent shall specify another form of indorsement), to be held as
Collateral pursuant to this Agreement; provided, that the Grantors shall not be
obligated to deliver to the Administrative Agent any
Instruments or Chattel Paper held by any Grantor at any time to the extent that
the aggregate face amount of all such Instruments and Chattel Paper held by all
Grantors at such time does not exceed $20,000,000. It is understood and agreed
that Indebtedness between the Borrower and any of its Subsidiaries, if any, need
not be evidenced by notes.
5.3 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER
DOCUMENTATION. (a) Such Grantor shall maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in Section 4.3 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Administrative Agent and the
Lenders from time to time statements and schedules further identifying and
describing the Collateral of such Grantor and such other reports in connection
with the Collateral as the Administrative Agent may reasonably request, all in
reasonable detail.
(c) At any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of such Grantor, such Grantor
will promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) the filing of any financing or continuation
statements under the Uniform Commercial Code in effect in any jurisdiction with
respect to the security interests created hereby and (ii) in the case of Pledged
Stock and any other relevant Collateral, taking any actions necessary to enable
the Administrative Agent to obtain "control" (within the meaning of the
applicable Article 8 Uniform Commercial Code) with respect thereto.
5.4 CHANGES IN NAME, ETC.. Such Grantor will not, except upon 15
days' prior written notice to the Administrative Agent and delivery to the
Administrative Agent of all additional executed financing statements and other
documents reasonably requested by the Administrative Agent to maintain the
validity, perfection and priority of the security interests provided for herein:
(i) change its jurisdiction of organization or official
identification filing number from that referred to in Section 4.4; or
(ii) change its name.
5.5 NOTICES. Such Grantor will advise the Administrative Agent and
the Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral which would
adversely affect the ability of the Administrative Agent to exercise any of its
remedies hereunder; and
(b) the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
5.6 INVESTMENT PROPERTY. (a) If such Grantor shall become entitled
to receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Administrative Agent and the Lenders, hold the same in
trust for the Administrative Agent and the Lenders and deliver the same
forthwith to the Administrative Agent in the exact form received, duly indorsed
by such Grantor to the Administrative Agent, if required, together with an
undated stock power covering such certificate duly executed in blank by such
Grantor, to be held by the Administrative Agent, subject to the terms hereof, as
additional collateral security for the Obligations. Any sums paid upon or in
respect of the Investment Property upon the liquidation or dissolution of any
Issuer at any time when an Event of Default is continuing shall be paid over to
the Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations, and in case any distribution of capital shall be
made on or in respect of the Investment Property, or any property shall be
distributed upon or with respect to the Investment Property pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected security interest in favor of the Administrative Agent,
be delivered to the Administrative Agent to be held by it hereunder as
additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Pledged Stock shall be
received by such Grantor at any time when an Event of Default is continuing,
such Grantor shall, until such money or property is paid or delivered to the
Administrative Agent, hold such money or property in trust for the Lenders,
segregated from other funds of such Grantor, as additional collateral security
for the Obligations. Notwithstanding the foregoing, the Grantors shall not be
required to pay over to the Administrative Agent or deliver to the
Administrative Agent as Collateral any proceeds of any liquidation or
dissolution of any Issuer, or any distribution of capital or property in respect
of any Investment Property, to the extent that (i) such liquidation, dissolution
or distribution, if treated as a Disposition of the relevant Issuer, would be
permitted by the Credit Agreement and (ii) the proceeds thereof are applied
toward prepayment of Loans and reduction of Commitments to the extent required
by the Credit Agreement.
(b) Without the prior written consent of the Administrative Agent,
such Grantor will not (i) vote to enable, or take any other action to permit,
any Issuer to issue any stock or other equity securities of any nature or to
issue any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of any Issuer,
unless such securities are delivered to the Administrative Agent, concurrently
with the issuance thereof, to be held by the Administrative Agent as Collateral,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Investment Property or Proceeds thereof (except
pursuant to a transaction expressly permitted by the Credit Agreement), (iii)
create, incur or permit to exist any Lien or option in favor of, or any claim of
any Person with respect to, any of the Investment Property or Proceeds thereof,
or any interest therein, except for the security interests created by this
Agreement or (iv) enter into any agreement or undertaking restricting the right
or ability of such Grantor or the Administrative Agent to sell, assign or
transfer any of the Pledged Stock or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such Issuer
agrees that (i) it will be bound by the terms of this Agreement relating to the
Pledged Stock issued by it and will comply with such terms insofar as such terms
are applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.7(a) with
respect to the Pledged Stock issued by it and (iii) the terms of Sections 6.1(c)
and 6.5 shall apply to it, MUTATIS MUTANDIS, with respect to all actions that
may be required of it pursuant to Section 6.1(c) or 6.5 with respect to the
Pledged Stock issued by it.
(d) Each Issuer that is a partnership or a limited liability company
(i) confirms that none of the terms of any equity interest issued by it provides
that such equity interest is a "security" within the meaning of Sections 8-102
and 8-103 of the
New York UCC (a "SECURITY") and (ii) agrees that if any such
equity interest shall be or become a Security, such Issuer will (and the Grantor
that holds such equity interest hereby instructs such Issuer to) cause such
Security to be a certificated Security and deliver such certificate to the
Administrative Agent without further consent by such Grantor.
5.7 INTELLECTUAL PROPERTY. (a) Such Grantor (either itself or
through licensees) will (i) continue to use each material Trademark on each and
every trademark class of goods applicable to its current line as reflected in
its current catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii)
maintain as in the past the quality of products and services offered under such
Trademark, (iii) use such Trademark with the appropriate notice of registration
and all other notices and legends required by applicable Requirements of Law,
(iv) not adopt or use any xxxx which is confusingly similar or a colorable
imitation of such Trademark unless the Administrative Agent, for the ratable
benefit of the Lenders, shall obtain a perfected security interest in such xxxx
pursuant to this Agreement, and (v) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such
Trademark may become invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees) will not do
any act, or omit to do any act, whereby any material Patent may become
forfeited, abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i) will
employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of the Copyrights may become invalidated or
otherwise impaired. Such Grantor will not (either itself or through licensees)
do any act whereby any material portion of the Copyrights may fall into the
public domain.
(d) Such Grantor (either itself or through licensees) will not do
any act that knowingly uses any material Intellectual Property to infringe the
intellectual property rights of any other Person.
(e) Such Grantor will notify the Administrative Agent and the
Lenders as soon as reasonably practicable if it knows that any application or
registration relating to any material Intellectual Property is reasonably likely
to become forfeited, abandoned or dedicated to the public, or of any material
adverse determination or development (including, without
limitation, the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court or tribunal in any country) regarding such
Grantor's ownership of, or the validity of, any material Intellectual Property
or such Grantor's right to register the same or to own and maintain the same.
(f) Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Administrative Agent within five Business Days after the last day
of the fiscal quarter in which such filing occurs. Upon request of the
Administrative Agent, such Grantor shall execute and deliver, and have recorded,
any and all agreements, instruments, documents, and papers as the Administrative
Agent may reasonably request to evidence the Administrative Agent's and the
Lenders' security interest in any Copyright, Patent or Trademark and the
goodwill and general intangibles of such Grantor relating thereto or represented
thereby.
(g) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, to maintain
and pursue each application relating to any material Intellectual Property (and
to obtain the relevant registration) and to maintain each registration of the
material Intellectual Property, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of incontestability.
(h) In the event that any material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall,
unless such Grantor shall reasonably determine that such Intellectual Property
would not reasonably be likely to, in the aggregate, effect the aggregate
economic value of the Intellectual Property, taken as a whole, (i) take such
actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent after it learns thereof and take all reasonably steps to
terminate the infringement, misappropriation or dilution.
SECTION 6. REMEDIAL PROVISIONS
6.1 PLEDGED STOCK. (a) Unless an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have given notice
to the relevant Grantor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 6.1(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock, to the
extent permitted in the Credit Agreement, and to exercise all voting and
corporate rights with respect to the Pledged Stock; PROVIDED, HOWEVER, that no
vote shall be cast or corporate right exercised or other action taken which, in
the Administrative Agent's reasonable judgment, would impair the Collateral or
which would be inconsistent with or result in any violation of any provision of
the Credit Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Pledged Stock and make application thereof to the Obligations in
the order set forth in Section 6.3, and (ii) any or all of the Pledged Stock
shall be registered in the name of the Administrative Agent or its nominee, and
the Administrative Agent or its nominee may thereafter exercise (x) all voting,
corporate and other rights pertaining to such Pledged Stock at any meeting of
shareholders of the relevant Issuer or Issuers or otherwise and (y) any and all
rights of conversion, exchange and subscription and any other rights, privileges
or options pertaining to such Pledged Stock as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Pledged Stock upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any
Issuer, or upon the exercise by any Grantor or the Administrative Agent of any
right, privilege or option pertaining to such Pledged Stock, and in connection
therewith, the right to deposit and deliver any and all of the Pledged Stock
with any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Administrative Agent may
determine), all without liability except to account for property actually
received by it, but the Administrative Agent shall have no duty to any Grantor
to exercise any such right, privilege or option and shall not be responsible for
any failure to do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Pledged Stock pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Administrative Agent in writing that (x)
states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
shall be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledged Stock directly to the Administrative Agent.
6.2 PROCEEDS TO BE TURNED OVER TO ADMINISTRATIVE AGENT. If an Event
of Default shall occur and be continuing, all Proceeds received by any Grantor
consisting of cash, checks and Instruments shall be held by such Grantor in
trust for the Administrative Agent and the Lenders, segregated from other funds
of such Grantor, and shall, forthwith upon receipt by such Grantor, (if the
Administrative Agent shall so request) be turned over to the Administrative
Agent in the exact form received by such Grantor (duly indorsed by such Grantor
to the Administrative Agent, if required). All Proceeds received by the
Administrative Agent hereunder shall be held by the Administrative Agent in a
Collateral Account maintained under its sole dominion and control. All Proceeds
while held by the Administrative Agent in a Collateral Account (or by such
Grantor in trust for the Administrative Agent and the Lenders) shall continue to
be held as collateral security for all the Obligations and shall not constitute
payment thereof until applied as provided in Section 6.3.
6.3 APPLICATION OF PROCEEDS. At such intervals as may be agreed upon
by the Borrower and the Administrative Agent, or, if an Event of Default shall
have occurred and be continuing, at any time at the Administrative Agent's
election, the Administrative Agent may apply all or any part of Proceeds
constituting Collateral, whether or not held in any Collateral
Account, and any proceeds of the guarantee set forth in Section 2, in payment of
the Obligations in the following order:
FIRST, to pay incurred and unpaid fees and expenses of the
Administrative Agent under the Loan Documents;
SECOND, to the Administrative Agent, for application by it towards
payment of amounts then due and owing and remaining unpaid in respect of
the Obligations, PRO RATA among the Lenders according to the amounts of the
Obligations then due and owing and remaining unpaid to the Lenders;
THIRD, to the Administrative Agent, for application by it towards
prepayment of the Obligations, PRO RATA among the Lenders according to the
amounts of the Obligations then held by the Lenders; and
FOURTH, any balance of such Proceeds remaining after the Obligations
shall have been paid in full, no Letters of Credit shall be outstanding and
the Commitments shall have terminated shall be paid over to the relevant
Borrower or to whomsoever may be lawfully entitled to receive the same.
6.4 CODE AND OTHER REMEDIES. If an Event of Default shall occur and
be continuing, the Administrative Agent, on behalf of the Lenders, may exercise,
in addition to all other rights and remedies granted to them in this Agreement
and in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the
New York UCC
or any other applicable law. Without limiting the generality of the foregoing,
the Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of the Administrative Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent or any Lender shall have
the right upon any such public sale or sales, and, to the extent permitted by
law, upon any such private sale or sales, to purchase the whole or any part of
the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released. Each Grantor
further agrees, at the Administrative Agent's request, to assemble the
Collateral and make it available to the Administrative Agent at places which the
Administrative Agent shall reasonably select, whether at such Grantor's premises
or elsewhere. The Administrative Agent shall apply the net proceeds of any
action taken by it pursuant to this Section 6.4, after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or incidental
to the care or safekeeping of any of the Collateral or in any way relating to
the Collateral or the rights of the Administrative Agent and the Lenders
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations, in such
order as the Administrative Agent may elect, and only after such application
and after the payment by the Administrative Agent of any other amount required
by any provision of law, including, without limitation, Section 9-504(1)(c) of
the
New York UCC, need the Administrative Agent account for the surplus, if any,
to any Grantor. To the extent permitted by applicable law, each Grantor waives
all claims, damages and demands it may acquire against the Administrative Agent
or any Lender arising out of the exercise by them of any rights hereunder. If
any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given at
least 10 days before such sale or other disposition.
6.5 REGISTRATION RIGHTS. (a) If the Administrative Agent shall
determine to exercise its right to sell any or all of the Pledged Stock pursuant
to Section 6.4, and if in the opinion of the Administrative Agent it is
necessary or advisable to have the Pledged Stock, or that portion thereof to be
sold, registered under the provisions of the Securities Act, the relevant
Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Administrative Agent, necessary or advisable to
register the Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Grantor agrees to
cause such Issuer to comply with the provisions of the securities or "Blue Sky"
laws of any and all jurisdictions which the Administrative Agent shall designate
and to make available to its security holders, as soon as practicable, an
earnings statement (which need not be audited) which will satisfy the provisions
of Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the Administrative Agent may be
unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Stock pursuant to this Section 6.5 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.5 will cause irreparable injury to the Administrative Agent
and the Lenders, that the Administrative Agent and the Lenders have no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section 6.5 shall be specifically enforceable
against such Grantor, and such Grantor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants except
for a defense that no Event of Default has occurred under the Credit Agreement.
6.6 WAIVER; DEFICIENCY. Each Grantor waives and agrees not to assert
any rights or privileges which it may acquire under Section 9-112 of the
New
York UCC. Each Grantor shall remain liable for any deficiency if the proceeds of
any sale or other disposition of the Collateral are insufficient to pay its
Obligations and the fees and disbursements of any attorneys employed by the
Administrative Agent or any Lender to collect such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 ADMINISTRATIVE AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT, ETC. (a)
Each Grantor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Administrative Agent the power and right, on behalf of
such Grantor, without notice to or assent by such Grantor, to do any or all of
the following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys with respect to
any Collateral and file any claim or take any other action or proceeding in
any court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and all such moneys
with respect to any Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and
papers as the Administrative Agent may request to evidence the
Administrative Agent's and the Lenders' security interest in such
Intellectual Property and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in Section 6.4
or 6.5, any indorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct; (2) ask or demand for, collect, and receive payment of
and receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral; (3)
sign and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (4) commence and prosecute any suits, actions or proceedings at
law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect
of any Collateral; (5) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (6) settle, compromise
or adjust any such suit, action or proceeding and, in connection therewith,
give such discharges or releases as the Administrative Agent may deem
appropriate; (7) assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any such Copyright, Patent or Trademark
pertains), throughout the world for such term or terms, on such conditions,
and in such manner, as the Administrative Agent shall in its sole
discretion determine; and (8) generally, sell, transfer, pledge and make
any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the Administrative Agent were the
absolute owner thereof for all purposes, and do, at the Administrative
Agent's option and such Grantor's expense, at any time, or from time to
time, all acts and things which the Administrative Agent deems necessary to
protect, preserve or realize upon the Collateral and the Administrative
Agent's and the Lenders' security interests therein and to effect the
intent of this Agreement, all as fully and effectively as such Grantor
might do.
Anything in this Section 7.1 (a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in connection
with actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable on past due Base Rate Loans under the Credit Agreement, from the
date of payment by the Administrative Agent to the date reimbursed by the
relevant Grantor, shall be payable by such Grantor to the Administrative Agent
on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
7.2 DUTY OF ADMINISTRATIVE AGENT. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative Agent, any Lender nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Administrative Agent and the Lenders hereunder are solely to
protect the Administrative Agent's and the Lenders' interests in the Collateral
and shall not impose any duty upon the Administrative Agent or any Lender to
exercise any such powers. The Administrative Agent and the Lenders shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.
7.3 EXECUTION OF FINANCING STATEMENTS. Pursuant to Section 9-402 of
the New York UCC and any other applicable law, each Grantor authorizes the
Administrative Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the Administrative
Agent reasonably determines appropriate to perfect the security interests of the
Administrative Agent under this Agreement. A photographic or other reproduction
of this Agreement shall be sufficient as a financing statement or other filing
or recording document or instrument for filing or recording in any jurisdiction.
7.4 AUTHORITY OF ADMINISTRATIVE AGENT. Each Grantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Grantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
SECTION 8. MISCELLANEOUS
8.1 AMENDMENTS IN WRITING. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 10.1 of the Credit Agreement.
8.2 NOTICES. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 10.2 of the Credit Agreement; PROVIDED that any such
notice, request or demand to or upon any Grantor other than the Parent and the
Borrower shall be addressed to such Grantor at its notice address set forth on
SCHEDULE 1.
8.3 NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
8.4 ENFORCEMENT EXPENSES; INDEMNIFICATION. (a) Each Guarantor agrees
to pay, or reimburse each Lender and the Administrative Agent for, all its costs
and expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Agreement and the other Loan Documents to which such Guarantor is a party,
including, without limitation, the fees and disbursements of counsel to each
Lender and of counsel to the Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the Administrative
Agent and the Lenders harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement.
(c) Each Guarantor agrees to pay, and to save the Administrative
Agent and the Lenders harmless from, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement to the
extent the Borrower would be required to do so pursuant to Section 10.5 of the
Credit Agreement.
(d) The agreements in this Section shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
8.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns; PROVIDED
that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
8.6 SET-OFF. Each Grantor hereby irrevocably authorizes the
Administrative Agent and each Lender at any time and from time to time while an
Event of Default pursuant to Section 7(a) of the Credit Agreement shall have
occurred and be continuing, without notice to such Grantor or any other Grantor,
any such notice being expressly waived by each Grantor, to set-off and
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the
Administrative Agent or such Lender to or for the credit or the account of such
Grantor, or any part thereof in such amounts as the Administrative Agent or such
Lender may elect, against and on account of the obligations and liabilities of
such Grantor to the Administrative Agent or such Lender hereunder and claims of
every nature and description of the Administrative Agent or such Lender against
such Grantor, in any currency, whether arising hereunder, under the Credit
Agreement, any other Loan Document or otherwise, as the Administrative Agent or
such Lender may elect, whether or not the Administrative Agent or any Lender has
made any demand for payment and although such obligations, liabilities and
claims may be contingent or unmatured. The Administrative Agent and each Lender
shall notify such Grantor promptly of any such set-off and the application made
by the Administrative Agent or such Lender of the proceeds thereof, PROVIDED
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Administrative Agent and each Lender
under this Section are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which the Administrative Agent or
such Lender may have.
8.7 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.8 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 SECTION HEADINGS. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
8.10 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Administrative Agent and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof and thereof not expressly
set forth or referred to herein or in the other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 ACTION REQUIRING APPROVAL. (a) If an Event of Default shall have
occurred and be continuing, each Grantor shall take any action which the
Administrative
Agent may request in the exercise of its rights and remedies under this
Agreement in order to transfer or assign the Collateral to the Administrative
Agent or to such one or more third parties as the Administrative Agent may
designate, or to a combination of the foregoing. To enforce the provisions of
this Section 8.12, the Administrative Agent is empowered to seek from any
Governmental Authority, to the extent required, consent to or approval of any
involuntary transfer of control of any entity whose Capital Stock is Collateral
under this Agreement for the purpose of seeking a bona fide purchaser to whom
control will ultimately be transferred. Each Grantor agrees to cooperate with
any such purchaser and with the Administrative Agent in the preparation,
execution and filing of any forms and providing any information that may be
necessary or helpful in obtaining any applicable Governmental Authority's
consent to the assignment to such purchaser of the Collateral. Each Grantor
hereby agrees to consent to any such involuntary transfer of control upon the
request of the Administrative Agent after and during the continuation of an
Event of Default and, without limiting any rights of the Administrative Agent
under this Agreement, to authorize the Administrative Agent to nominate a
trustee or receiver to assume control of the Collateral, subject only to
required judicial or other consent required by governmental authorities, in
order to effectuate the transactions contemplated in this Section 8.12. Such
trustee or receiver shall have all the rights and powers as provided to it by
law or court order, or to the Administrative Agent under this Agreement. Each
Grantor shall cooperate fully in obtaining the approval or consent of each
Governmental Authority required to effectuate the foregoing.
(b) If an Event of Default shall have occurred and be continuing,
each Grantor shall use its best efforts to assist in obtaining consent or
approval of any Governmental Authority, if required, for any action or
transactions contemplated by this Agreement, including without limitation, the
preparation, execution and filing of the transferor's or assignor's portion of
any application or applications for consent to the transfer of control or
assignment necessary or appropriate under applicable rules and regulations for
approval of the transfer or assignment of any portion of the Collateral.
(c) Notwithstanding the foregoing or any other provision of this
Agreement or of the Credit Agreement or any of the documents executed pursuant
hereto or thereto to the contrary, the Administrative Agent will not take any
action pursuant to this Agreement, or any such documents, which would constitute
or result in a direct or indirect acquisition or exercise of control of any
Insurance Subsidiary (including, without limitation, any direct or indirect
voting or act transferring control of any Pledged Stock) without first obtaining
the approval (or an exemption from the requirement to obtain such approval) of
the Applicable Insurance Regulatory Authority (in the case of General Accident
Reinsurance Company, the approval of the California Department of Insurance
pursuant to Section 1215.2 of the California Insurance Code).
8.13 SUBMISSION TO JURISDICTION; WAIVERS. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.
8.14 ACKNOWLEDGEMENTS. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a party;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to any Grantor arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Grantors, on the one hand, and the Administrative Agent
and Lenders, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Grantors and the Lenders.
8.15 ADDITIONAL GRANTORS. Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to Section 6.10(b) of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.
8.16 RELEASES. (a) At such time as the Loans, the Reimbursement
Obligations and the other Obligations (other than Borrower Hedge Agreement
Obligations) shall have been paid in full, the Commitments have been terminated
and no Letters of Credit shall be outstanding, the Collateral shall be released
from the Liens created hereby, and this Agreement and all obligations (other
than those expressly stated to survive such termination) of the Administrative
Agent and each Grantor hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Grantors. At the request and sole expense of any
Grantor following any such termination, the Administrative Agent shall deliver
to such Grantor any Collateral held by the Administrative Agent hereunder, and
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement,
then the Administrative Agent, at the request and sole expense of such Grantor,
shall execute and deliver to such Grantor all releases or other documents
reasonably necessary or desirable for the release of the Liens created hereby on
such Collateral. At the request and sole expense of the Borrower, a Subsidiary
Guarantor shall be released from its obligations hereunder in the event that all
the Capital Stock of such Subsidiary Guarantor shall be sold, transferred or
otherwise disposed of in a transaction permitted by the Credit Agreement;
PROVIDED that the Borrower shall have delivered to the Administrative Agent, at
least ten Business Days prior to the date of the proposed release, a written
request for release identifying the relevant Subsidiary Guarantor and the terms
of the sale or other disposition in reasonable detail, including the price
thereof and any expenses in connection therewith, together with a certification
by the Borrower stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents.
8.17 WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE OF THE
BENEFITS HEREOF, THE ADMINISTRATIVE AGENT AND EACH LENDER, HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
IN WITNESS WHEREOF, each of the undersigned has caused this Amended
and Restated
Guarantee and Collateral Agreement to be duly executed and
delivered as of the date first above written.
FUND AMERICAN ENTERPRISES HOLDINGS,
INC.(f/k/a TACK HOLDING CORP.)
By:
---------------------------------------
Title:
FUND AMERICAN COMPANIES, INC. (f/k/a
TACK ACQUISITION CORP.)
By:
---------------------------------------
Title:
ONEBEACON INSURANCE GROUP LLC
By:
---------------------------------------
Title:
ONEBEACON ASSET MANAGEMENT, INC.
By:
---------------------------------------
Title:
ONEBEACON FINANCE CORPORATION
By:
---------------------------------------
Title:
BEACON ADVERTISING CORPORATION
By:
---------------------------------------
Title:
ONEBEACON RISK MANAGEMENT, INC.
By:
---------------------------------------
Title:
ONEBEACON LLOYD'S INC.
By:
---------------------------------------
Title:
TCH INSURANCE AGENCY, INC.
By:
---------------------------------------
Title:
ONEBEACON SERVICES CORPORATION
By:
---------------------------------------
Title:
NEW JERSEY SKYLANDS MANAGEMENT CORPORATION
By:
---------------------------------------
Title:
Schedule 1
NOTICE ADDRESSES OF GUARANTORS
Guarantor Notice Address
--------- --------------
Fund American Enterprises Holdings, Inc. Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Fund American Companies, Inc. Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
OneBeacon Insurance Group LLC Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
OneBeacon Asset Management, Inc. Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
OneBeacon Finance Corporation Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Beacon Advertising Corporation Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
OneBeacon Risk Management, Inc. Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
OneBeacon Lloyds, Inc. Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
TCH Insurance Agency, Inc. Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
OneBeacon Services Corporation Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
New Jersey Skylands Management Corporation Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Schedule 2
DESCRIPTION OF PLEDGED STOCK
Authorized Pledgor /
/Class/Par Issued to Percent Certificate
Issuer Value Pledgor Ownership Pledged Number
------------------- ----------------- -------------- ---------------- --------------- ----------------
Fund American 1,000 Shares / 500 Shares Fund American 500 Shares / 5
Companies, Inc. Common / $1 Common Enterprises Common
Holdings, Inc.
300,000 Shares / 100%
/ Preferred
OneBeacon Asset 200,000 Shares 100,000 Shares OneBeacon 100,000 Shares 6
Management, Inc. / Common / $1 Common Insurance Group Common
LLC / 100%
OneBeacon Finance 1,000 Shares / 100 Shares OneBeacon 100 Shares 3
Corporation Common / $1 Common Insurance Group Common
LLC / 100%
Beacon Advertising 1,000 Shares / 100 Shares OneBeacon 100 Shares 4
Corporation Common / $1 Common Insurance Group Common
LLC / 100%
OneBeacon Risk 1,000 Shares / 600 Shares OneBeacon 600 Shares 6
Management, Inc. Common / $1 Common Insurance Group Common
LLC / 100%
OneBeacon Lloyds, 1,000 Shares / 100 Shares OneBeacon 100 Shares 3
Inc. Common / $1 Common Insurance Group Common
LLC / 100%
TCH Insurance 100,000 Shares 100 Shares OneBeacon 100 Shares 3
Agency / Common / $1 Common Insurance Group Common
LLC / 100%
National Farmers 5,000,000 3,000,000 OneBeacon 3,000,000 5
Union Property and Shares / Common Shares Common Insurance Group Shares Common
Casualty Company / $1 LLC / 100%
Houston General Common / $10 1,000,000 OneBeacon 1,000,000 11
Insurance Company Shares Common Insurance Group Shares Common
LLC / 100%
OneBeacon 600,000 Shares 400,000 Shares OneBeacon 400,000 Shares 25
Insurance Company / Common / Common Insurance Group Common
$10.50 LLC / 100%
Potomac Insurance 1,000,000 1,000,000 OneBeacon 1,000,000 3
Company Shares / Common Shares Common Insurance Group Shares Common
/ $2.35 LLC / 100%
Homeland Central 1,800,000 267,198 Shares OneBeacon 267,198 Shares 3770
Insurance Company Shares / Common Common Insurance Group Common
/ $2.50 LLC / 26.72%
1,500 Shares / 0 Shares
Preferred/ $100 Preferred
16,000 Shares /
Preferred / $50
The Camden Fire 500,000 Shares 500,000 Shares OneBeacon 500,000 Shares L66150
Insurance / Common / $8.40 Common Insurance Group Common
Association LLC / 100%
Pennsylvania 90,000 Shares / 60,000 Shares OneBeacon 60,000 Shares 85
General Insurance Common / $70 Common Insurance Group Common
Company LLC / 100%
OneBeacon Services 1,500 Shares / 1,500 Shares OneBeacon 1,500 Shares 3
Corporation Common / $1 Common Insurance Group Common
LLC / 100%
New Jersey 1,000 Shares / 100 Shares OneBeacon 100 Shares 0
Xxxxxxxx Xxxxxx / x0 Xxxxxx Insurance Group Common
Management LLC / 100%
Corporation
SCHEDULE 3
FILINGS AND OTHER ACTIONS REQUIRED TO PERFECT SECURITY INTERESTS
Grantor Offices UCC Filing Offices
------------------------------- --------------------------------------- -------------------------------------------
Fund American Enterprises One Beacon Street UCC Division
Holdings, Inc. Xxxxxx, XX 00000 Secretary of State
Suffolk County X.X. Xxx 000
Xxxxx, XX 00000
UCC Division
Secretary of the Commonwealth
One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
Fund American Companies, Inc. Xxx Xxxxxx Xxxxxx XXX Xxxxxxxx
Xxxxxx, XX 00000 Secretary of State
Suffolk County X.X. Xxx 000
Xxxxx, XX 00000
UCC Division
Secretary of the Commonwealth
One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
OneBeacon Insurance One Beacon Street UCC Division
Grantor Offices UCC Filing Offices
------------------------------- --------------------------------------- -------------------------------------------
Group LLC Xxxxxx, XX 00000 Secretary of State
Suffolk County X.X. Xxx 000
Xxxxx, XX 00000
UCC Division
Secretary of the Commonwealth
One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
OneBeacon Asset Management, One Beacon Street UCC Division
Inc. Xxxxxx, XX 00000 Secretary of State
Suffolk County X.X. Xxx 000
Xxxxx, XX 00000
UCC Division
Secretary of the Commonwealth
One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
OneBeacon Finance Corporation Xxx Xxxxxx Xxxxxx XXX Xxxxxxxx
Xxxxxx, XX 00000 Secretary of Xxxxx
Xxxxxxx Xxxxxx X.X. Xxx 000
Xxxxx, XX 00000
UCC Division
Grantor Offices UCC Filing Offices
------------------------------- --------------------------------------- -------------------------------------------
Secretary of the Commonwealth
One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
Beacon Advertising Corporation Xxx Xxxxxx Xxxxxx XXX Xxxxxxxx
Xxxxxx, XX 00000 Secretary of State
Suffolk County X.X. Xxx 000
Xxxxx, XX 00000
UCC Division
Secretary of the Commonwealth
One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
OneBeacon Risk Management, One Beacon Street UCC Division
Inc. Xxxxxx, XX 00000 Secretary of State
Suffolk County X.X. Xxx 000
Xxxxx, XX 00000
UCC Division
Secretary of the Commonwealth
One Ashburton Place
Room 1711
Xxxxxx, XX 00000
Grantor Offices UCC Filing Offices
------------------------------- --------------------------------------- -------------------------------------------
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
OneBeacon Lloyd's Inc. 0000 Xxxxx Xxxxxxx Xxxxxxxxxx XXX Xxxxxxx
Xxxxxx, XX 00000 Secretary of State
Dallas County X.X. Xxx 00000
Xxxxxx, XX 00000-0000
Xxxxxx Xxxxxx Clerk's Office
Records Bldg., 2nd Floor
000 Xxxx Xxxxxx
Xxxxxx, XX 00000-0000
UCC Division
Secretary of the Commonwealth
One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
TCH Insurance Agency, Inc. Xxx Xxxxxx Xxxxxx XXX Xxxxxxxx
Xxxxxx, XX 00000 Secretary of the Commonwealth
Suffolk County One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
Grantor Offices UCC Filing Offices
------------------------------- --------------------------------------- -------------------------------------------
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
OneBeacon Services Corporation Xxx Xxxxxx Xxxxxx XXX Xxxxxxxx
Xxxxxx, XX 00000 Secretary of State
Suffolk County X.X. Xxx 000
Xxxxx, XX 00000
UCC Division
Secretary of the Commonwealth
One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
New Jersey Skylands 000 Xxxxxxxxxx Xxxx XXX Division
Management Corporation Xxxxxxx Xxxxx, XX 00000 Secretary of State
X.X. Xxx 000
Xxxxx, XX 00000
PATENT AND TRADEMARK FILINGS
Filing of Guarantee & Collateral Agreement and Schedules with U.S. Department of
Commerce Patent and Trademark Office accompanied by Form PTO-1618A Recordation
Form Cover.
ACTIONS WITH RESPECT TO PLEDGED STOCK
Delivery of stock certificates to Administrative Agent with undated stock power
executed in blank.
OTHER ACTIONS
None.
Schedule 4
JURISDICTION OF ORGANIZATION AND LOCATION OF CHIEF EXECUTIVE OFFICE
Jurisdiction of Official Identification
Guarantor Organization Number
-------------------------------------------- ---------------- -----------------------
Fund American Enterprises, Holdings, Inc. Delaware 3291231
Fund American Companies, Inc. Delaware 3291234
OneBeacon Insurance Group LLC Delaware 3461266
OneBeacon Asset Management, Inc. Delaware 0640320
OneBeacon Finance Corporation Delaware 2185685
Beacon Advertising Corporation Delaware 0870143
OneBeacon Risk Management, Inc. Delaware 0810732
OneBeacon Lloyds, Inc. Texas 124318600
TCH Insurance Agency, Inc. Massachusetts n/a
OneBeacon Services Corporation Delaware 2344327
New Jersey Skylands Management Corporation Delaware 3503312
Schedule 5
INTELLECTUAL PROPERTY
I. Copyrights and Copyright Licenses:
None.
II. Patents and Patent Licenses:
None.
III. Trademarks and Trademark Licenses
Registration No. / Registration / Filed
Grantor Trademark/ Servicemark Serial No. Date
---------------------- ------------------------ -------------------- -----------------------
OneBeacon Insurance Master Driver RN 0000000 R 4/26/77
Group, LLC
OneBeacon Insurance theCompass SN 76103519 F 8/7/00
Group, LLC
SCHEDULE 6
EXISTING PRIOR LIENS
NONE
Annex I to
AMENDED AND RESTATED
GUARANTEE AND COLLATERAL AGREEMENT
ASSUMPTION AGREEMENT, dated as of ________________, 200__, made by
______________________________, a ______________ corporation (the "ADDITIONAL
GRANTOR"), in favor of XXXXXX COMMERCIAL PAPER INC., as administrative agent (in
such capacity, the "ADMINISTRATIVE AGENT") for the banks and other financial
institutions (the "LENDERS") parties to the Credit Agreement referred to below.
All capitalized terms not defined herein shall have the meaning ascribed to them
in such Credit Agreement.
W I T N E S S E T H :
- - - - - - - - - - -
WHEREAS, FUND AMERICAN ENTERPRISES HOLDINGS, INC. (f/k/a TACK HOLDING
CORP.), a Delaware corporation (the "PARENT"), FUND AMERICAN COMPANIES, INC.
(f/k/a TACK ACQUISITION CORP.), a Delaware corporation (the "BORROWER"), the
Lenders and the Administrative Agent have entered into an Amended and Restated
Credit Agreement, dated as of October 30, 2002 (as amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT");
WHEREAS, in connection with the Credit Agreement, the Borrower and
certain of the Borrower's Affiliates have entered into the Amended and Restated
Guarantee and Collateral Agreement, dated as of October 30, 2002 (as amended,
supplemented or otherwise modified from time to time, the "AMENDED AND RESTATED
GUARANTEE AND COLLATERAL AGREEMENT") in favor of the Administrative Agent for
the benefit of the Lenders;
WHEREAS, the Credit Agreement requires the Additional Grantor to
become a party to the Amended and Restated Guarantee and Collateral Agreement;
and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Amended and Restated
Guarantee and Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT. By
executing and delivering this Assumption Agreement, the Additional Grantor, as
provided in Section 8.15 of the Amended and Restated Guarantee and Collateral
Agreement, hereby becomes a party to the Amended and Restated Guarantee and
Collateral Agreement as a Grantor thereunder with the same force and effect as
if originally named therein as a Grantor and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Grantor thereunder. The information set forth in Annex 1-A hereto is hereby
added to the information set forth in Schedules _______* to the Amended and
Restated Guarantee and Collateral Agreement. The Additional Grantor hereby
represents and warrants that each of the representations and warranties
contained in Section 4 of the Amended and
----------
* Refer to each Schedule which needs to be supplemented.
Annex I-2
Restated Guarantee and Collateral Agreement is true and correct on and as the
date hereof (after giving effect to this Assumption Agreement) as if made on and
as of such date.
Annex I-3
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:
-------------------------------------
Name:
Title:
Annex II
to
Amended and Restated
Guarantee and Collateral Agreement
ACKNOWLEDGEMENT
The undersigned hereby acknowledges receipt of a copy of the Amended and
Restated Guarantee and Collateral Agreement dated as of October 30, 2002 (the
"AGREEMENT"), made by the Grantors parties thereto for the benefit of XXXXXX
COMMERCIAL PAPER INC., as Administrative Agent.
The undersigned further acknowledges that pursuant to the terms of the
Agreement [insert appropriate Grantor] has assigned and transferred to the
Administrative Agent, and has granted to the Administrative Agent, for the
ratable benefit of the Lenders, a security interest in, all Collateral now owned
by such Grantor, including the issued and outstanding shares of all classes of
the Capital Stock of the undersigned, as collateral security for the prompt and
complete payment and performance when due of such Grantor's Obligations. As
provided by Section 8.12 of the Agreement, the Administrative Agent may not take
any action pursuant to the Agreement that would constitute or result in a direct
or indirect act of control of [INSURANCE COMPANY] without first obtaining the
approval of the Applicable Regulatory Authority.
[NAME OF ISSUER]
By:
-------------------------------------
Name:
Title:
Address for Notices:
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Fax:
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