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Exhibit 10.58
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (the "Agreement") is made and dated as of the
1st day of August, 1998, by and among FIDELITY NATIONAL FINANCIAL, INC., a
Delaware corporation (the "Company"); the lenders from time to time party hereto
(each a "Lender," and, collectively, the "Lenders"); and SANWA BANK CALIFORNIA
("Sanwa"), as agent for the Lenders (in such capacity, the "Agent").
RECITALS
A. The Company has requested that the Lenders extend credit to the
Company in the form of a secured revolving credit facility and a secured term
loan facility, and that the Agent agree to act as credit agent and collateral
agent for the benefit of the Lenders with respect thereto.
B. The Company, the Agent and the Lenders desire to enter into this
Agreement to evidence the willingness of the Lenders to provide such credit
facilities and of the Agent to act on their behalf, and to set forth the rights
and obligations of the parties with respect to such credit extensions.
NOW, THEREFORE, in consideration of the above Recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. Revolving Credit Facility.
1(a) Revolving Credit Limit. On the terms and subject to the
conditions set forth herein, the Lenders severally agree that they shall from
time to time to but not including the Maturity Date (as that term and
capitalized terms not otherwise defined herein are defined in the Glossary
attached hereto as Annex 1), make revolving loans (the "Revolving Loans" or a
"Revolving Loan"), pro rata in accordance with their respective Percentage
Shares, in an aggregate outstanding amount not to exceed at any date: (1) the
Aggregate Credit Limit, less (2) the aggregate outstanding principal amount of
the Term Loan on such date.
1(b) Calculation and Payment of Interest. The Company shall
pay interest on Revolving Loans outstanding hereunder from the date disbursed to
but not including the date of payment, at a rate per annum equal to, at the
option of and as selected by the Company from time to time (subject to the
provisions of Paragraphs 3(b), 3(c) and 3(d) below): (1) the Floating Rate
during the applicable computation period, or (2) the Applicable Eurodollar Rate
for the selected Interest Period. Interest on Revolving Loans shall be payable
as provided in Paragraph 3(a) below.
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1(c) Principal Repayment. Subject to the provisions of
Paragraph 3(b) below, including, without limitation, the right of the Company to
continue Eurodollar Loans following the end of their respective Interest Periods
on the terms and subject to the conditions set forth therein, the Company shall
pay the principal amount of each Revolving Loan outstanding as a Eurodollar Rate
Loan on the last day of the Interest Period therefor and shall pay the principal
amount of each Revolving Loan outstanding as a Floating Rate Loan on the
Maturity Date. Principal amounts prepaid hereunder may be reborrowed on the
terms and subject to the conditions set forth in Paragraph 6(b) below, it being
expressly acknowledged and agreed that the credit facility provided under this
Paragraph 1 is a revolving facility.
2. Term Loan.
2(a) Credit Amount. On the terms and subject to the conditions
set forth herein, the Lenders severally agree that on the Effective Date they
shall advance, in a single disbursement, their respective Percentage Shares of a
term loan (the "Term Loan") in such amount as the Company may request pursuant
to a duly executed Loan Request, but not to exceed in any event the lesser of:
(1) $20,000,000.00, and (2) the Aggregate Credit Limit minus the dollar amount
of Revolving Loans requested to be funded on the Effective Date.
2(b) Calculation and Payment of Interest. The Company shall
pay interest on the Term Loan (including portions thereof as selected by the
Company subject to the provisions of Paragraph 3(b) below) from the date
disbursed to but not including the date of payment, at a rate per annum equal
to, at the option of and as selected by the Company from time to time (subject
to the provisions of Paragraphs 3(b), 3(c) and 3(d) below): (1) the Floating
Rate during the applicable computation period, or (2) the Applicable Eurodollar
Rate for the selected Interest Period. Interest on the Term Loan shall be
payable as provided in Paragraph 3(a) below.
2(c) Payment of Principal. The principal amount of the Term
Loan shall be payable in: (1) ten consecutive equal quarterly installments of
$1,000,000.00 each, said installments to be payable on the last Business Day of
each calendar quarter, commencing September 30, 1998, and (2) one final
installment in the amount necessary to repay the remaining outstanding principal
balance of the Term Loan in full on the Maturity Date.
3. Pricing Provisions.
3(a) Interest Billing and Payment Requirements. Interest
accruing on Floating Rate Loans shall be payable monthly, in arrears, for each
month on the last Business Day of such month in the amount set forth in an
interest billing for such Floating Rate Loans delivered by the Agent to the
Company (which delivery may be telephonic or by facsimile transmission and, if
by telephone, shall be confirmed on the same Business Day by facsimile
transmission or other writing), with the balance of accrued and unpaid interest
payable in full on the Maturity Date. Interest accruing on Eurodollar Rate Loans
shall be payable, in arrears, on the last day of the applicable Interest Period
therefor, or in the case of Eurodollar Rate Loans with Interest Periods ending
later than three months from the date funded, at the end of each three month
period from the date funded and at the end of the applicable Interest Period
therefor.
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3(b) Election of Type of Loan; Conversion Options; Funding of
Loans.
(1) The Term Loan shall initially be funded as a
Floating Rate Loan and, thereafter, subject to the provisions of this
Paragraph 3(b), the outstanding principal amount thereof or portions of
such amount may be converted into Eurodollar Rate Loans as provided
hereunder.
(2) The Company may elect from time to time to have
Revolving Loans funded by giving the Agent irrevocable notice of such
election no later than: (i) in the case of a Revolving Loan to be funded
as a Floating Rate Loan, 12:00 noon (Los Angeles time) on the Business Day
immediately preceding the requested funding date, and (ii) in the case of
a Revolving Loan to be funded as a Eurodollar Rate Loan, 9:00 a.m. (Los
Angeles time) on the third Eurodollar Business Day preceding the proposed
funding date.
(3) The principal amount of each Eurodollar Rate Loan
shall be in the minimum amount of $5,000,000.00 and multiples of
$1,000,000.00 in excess thereof, and the principal amount of each Floating
Rate Loan shall be in the minimum amount of $1,000,000.00 and multiples of
$1,000,000.00 in excess thereof, and the aggregate number of Eurodollar
Rate Loans outstanding on any date with a different Interest Period may
not exceed five.
(4) The Company may elect from time to time to convert
Loans outstanding: (i) as Eurodollar Rate Loans to Floating Rate Loans by
giving the Agent irrevocable notice of such election no later than 12:00
noon (Los Angeles time) on the Business Day immediately preceding the last
day of the Interest Period for such Eurodollar Rate Loan, and (ii) as
Floating Rate Loans to Eurodollar Rate Loans by giving the Agent
irrevocable notice of such election no later than 9:00 a.m. (Los Angeles
time) on the third Eurodollar Business Day preceding the proposed
conversion date. Any conversion of Eurodollar Rate Loans may only be made
on the last day of the applicable Interest Period. No Floating Rate Loan
may be converted into a Eurodollar Rate Loan if an Event of Default or
Potential Default has occurred and is continuing at the requested
conversion date.
(5) The Company may elect from time to time to have any
Eurodollar Rate Loan continued as such upon the expiration of the Interest
Period applicable thereto by giving the Agent irrevocable notice of such
election no later than 9:00 a.m. (Los Angeles time) on the third
Eurodollar Business Day preceding the last day of such Interest Period;
provided, however, that no Eurodollar Rate Loan may be continued when any
Event of Default or Potential Default has occurred and is continuing, but
shall be automatically converted to a Floating Rate Loan on the last day
of the Interest Period applicable thereto. The Agent shall notify the
Company promptly that such automatic conversion will occur. If the Company
shall fail to give notice of its election to continue a Eurodollar Rate
Loan as provided above, the Company shall be
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deemed to have elected to convert the affected Eurodollar Rate Loan to a
Floating Rate Loan on the last day of the applicable Interest Period.
(6) Each request for the funding, continuation or
conversion of a Loan shall be evidenced by the timely delivery by the
Company to the Agent of a duly executed Loan Request (which delivery may
be by facsimile transmission).
(7) Upon receipt of a Loan Request for the funding of a
new Loan, including, without limitation, the Term Loan, the Agent shall
notify each Lender of such Lender's Percentage Share thereof no later than
9:30 a.m. (Los Angeles time) on the date such Loan Request is received by
the Agent (said notice by the Agent to the Lenders to be given
telephonically and confirmed by facsimile transmission). Each Lender shall
make its Percentage Share of the proposed Loan available to the Agent, in
same-day funds, on the funding date at the Contact Office of the Agent,
ABA 000000000, for the Agent's Account #2302-25217, or such other account
as the Agent shall designate no later than 12:00 noon (Los Angeles time).
The failure of any Lender to advance its Percentage Share of a proposed
Loan shall not relieve any other Lender of its obligation hereunder to
advance its Percentage Share thereof, but no Lender shall be responsible
for the failure of any other Lender to make any such advance.
3(c) Inability to Determine Rate. In the event that the Agent
shall have reasonably determined (which determination shall be conclusive and
binding upon the Company) that by reason of circumstances affecting the
interbank market adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for any Interest Period, the Agent shall forthwith give
facsimile notice of such determination, confirmed in writing, to each Lender and
to the Company. If such notice is given: (1) no Revolving Loan may be funded as
a Eurodollar Rate Loan, (2) any Floating Rate Loan that was to have been
converted to a Eurodollar Rate Loan shall, subject to the provisions hereof, be
continued as a Floating Rate Loan, and (3) any outstanding Eurodollar Rate Loan
shall be converted, on the last day of the then current Eurodollar Interest
Period applicable thereto, to a Floating Rate Loan. Until such notice has been
withdrawn by the Agent, the Company shall not have the right to convert a
Floating Rate Loan to a Eurodollar Rate Loan or to fund any Revolving Loan as a
Eurodollar Rate Loan or to continue a Eurodollar Rate Loan as such. The Agent
shall withdraw such notice in the event that the circumstances giving rise
thereto no longer pertain and that adequate and reasonable means exist for
ascertaining the Eurodollar Rate for the Interest Period requested by the
Company, and following withdrawal of such notice by the Agent, the Company shall
have the right to have Revolving Loans funded as Eurodollar Rate Loans, to
convert Floating Rate Loans to a Eurodollar Rate Loans and to continue
Eurodollar Rate Loans as such in accordance with the terms and conditions of
this Agreement.
3(d) Illegality. Notwithstanding any other provisions herein,
if any law, regulation, treaty or directive or any change therein or in the
interpretation or application thereof, shall make it unlawful for any Lender to
make or maintain Eurodollar Rate Loans as contemplated by this Agreement: (1)
the commitment of such Lender to make or to continue Eurodollar Rate Loans or to
convert Floating Rate Loans to Eurodollar Rate Loans shall
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forthwith be canceled and (2) such Lender's Percentage Share of Loans then
outstanding as Eurodollar Rate Loans, if any, shall be converted automatically
to Floating Rate Loans at the end of their respective Interest Periods or within
such earlier period as may be required by law. In the event of a conversion of
any such Loan prior to the end of its applicable Interest Period the Company
hereby agrees promptly to pay any Lender affected thereby, upon demand, the
amounts required pursuant to Paragraph 3(g) below, it being agreed and
understood that such conversion shall constitute a prepayment for all purposes
hereof. The provisions hereof shall survive the termination of this Agreement
and payment of the outstanding Loans and all other amounts payable hereunder.
3(e) Requirements of Law; Increased Costs. In the event that
any applicable law, order, regulation, treaty or directive issued by any central
bank or other governmental authority, agency or instrumentality or in the
governmental or judicial interpretation or application thereof, or compliance by
any Lender with any request or directive (whether or not having the force of
law) issued by any central bank or other governmental authority, agency or
instrumentality:
(1) Does or shall subject any Lender to any tax of any
kind whatsoever with respect to this Agreement or any Loans made
hereunder, or change the basis of taxation of payments to such Lender of
principal, fee, interest or any other amount payable hereunder (except for
change in the rate of tax on the overall net income of such Lender);
(2) Does or shall impose, modify or hold applicable any
reserve, capital requirement, special deposit, compulsory loan or similar
requirements against assets held by, or deposits or other liabilities in
or for the account of, advances or loans by, or other credit extended by,
or any other acquisition of funds by, any office of such Lender which are
not otherwise included in the determination of interest payable on the
Obligations; or
(3) Does or shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender of
making, renewing or maintaining any Loan or to reduce any amount receivable in
respect thereof or the rate of return on the capital of such Lender or any
corporation controlling such Lender, then, in any such case, the Company shall
promptly pay to such Lender, upon its written demand made through the Agent, any
additional amounts necessary to compensate such Lender for such additional cost
or reduced amounts receivable or rate of return as determined by such Lender
with respect to this Agreement or Loans made or Letters of Credit issued
hereunder. If a Lender becomes entitled to claim any additional amounts pursuant
to this Paragraph 3(e), it shall promptly notify the Company of the event by
reason of which it has become so entitled. A certificate as to any additional
amounts payable pursuant to the foregoing sentence containing the calculation
thereof in reasonable detail submitted by a Lender to the Company shall be
conclusive in the absence of manifest error. The provisions hereof shall survive
the termination of this Agreement and payment of the outstanding Loans and other
Obligations.
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3(f) Funding. Each Lender shall be entitled to fund all or any
portion of its Loans in any manner it may determine in its sole discretion,
including, without limitation, in the Grand Cayman inter-bank market, the London
inter-bank market and within the United States, but all calculations and
transactions hereunder shall be conduced as though all Lenders actually fund all
Eurodollar Rate Loans through the purchase of offshore dollar deposits in the
amount of the relevant Eurodollar Rate Loan in maturities corresponding to the
applicable Interest Periods.
3(g) Prepayment Premium. In addition to all other payment
obligations hereunder, in the event: (1) any Loan which is outstanding as a
Eurodollar Rate Loan is prepaid prior to the last day of the applicable Interest
Period, whether following the occurrence of an Event of Default or otherwise, or
(2) the Company shall fail to continue or to make a conversion to a Eurodollar
Rate Loan after the Company has given notice thereof as provided in Paragraph
3(b) above, then the Company shall immediately pay to the Lenders holding the
Loans prepaid or not made, continued or converted, through the Agent, an
additional premium sum compensating each Lender for losses, costs and expenses
incurred by such Lender in connection with such prepayment or such failure to
borrow, continue or convert. The Company acknowledges that such losses, costs
and expenses are difficult to quantify and that, in the case of the prepayment
of or failure to continue or convert to a Eurodollar Loan, the following formula
represents a fair and reasonable estimate of such losses, costs and expenses:
Amount [Applicable Eurodollar Rate ] Days Remaining
Being [Eurodollar Rate for such Incre- ] in Interest
Prepaid or [for Increment ment for Days ] x Period
Being x [Being Prepaid - Remaining in ] -------------
Not Borrowed, [or Not Borrowed, Interest ] 360
Converted or [Converted or Period ]
or Continued [Continued (as quoted on the first
Eurodollar Business Day
Following Lenders' receipt
of notice thereof)
For purposes of calculating the current Eurodollar Rate for the days remaining
in the Interest Period for both the increment being prepaid or not converted or
continued, said current Eurodollar Rate shall be an interest rate interpolated
between Eurodollar Rates quoted for standard calendar periods for subsequent
months' maturities in accordance with normal conventions. A certificate as to
any additional amounts payable pursuant to the foregoing sentence containing the
calculation thereof in reasonable detail submitted by a Lender to the Company
shall be conclusive in the absence of manifest error. The provisions hereof
shall survive the termination of this Agreement and the payment of all other
Obligations.
3(h) Fees. The Company shall pay the following fees:
(1) To the Agent for the pro rata benefit of the Lenders
in accordance with their respective Percentage Shares, on the last
Business Day of each
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calendar quarter (and on the Maturity Date) for such calendar quarter (or
portion thereof), a non-usage fee in the amount set forth in a fee billing
delivered by the Agent to the Company, which non-usage fee shall equal:
(1) the average daily Aggregate Credit Limit in effect during such
calendar quarter (or portion thereof), minus the sum of the daily average
outstanding principal balance of the Term Loan and the daily average
outstanding amount of Revolving Loans during such calendar quarter (or
portion thereof), multiplied by (2) the product of: (i) one quarter of one
percent (0.25%), and (ii) a fraction, the numerator of which is the number
of days in the applicable calculation period and the denominator of which
is 360.
(2) To the Agent for its own account, such fees in such
amounts and payable at such times as the Company and the Agent may from
time to time agree in writing.
3(i) Default Interest. Notwithstanding anything to the
contrary contained herein, on any date that there shall have occurred and be
continuing an Event of Default, any and all Obligations outstanding shall bear
interest at a per annum rate equal to two percent (2%) in excess of the rate
applicable to each respective Loan then outstanding under this Agreement or, in
the case of Obligations other than Loans, two percent (2%) in excess of the
highest rate applicable to Loans then outstanding.
3(j) Computations. All computations of interest and fees
payable hereunder shall be based upon a year of three hundred and sixty (360)
days for the actual number of days elapsed.
3(k) Obligation of Lenders to Mitigate; Replacement of
Lenders. Each Lender agrees that:
(1) As promptly as practicable after the officer of such
Lender responsible for administering the Loans of such Lender becomes
aware of any event or condition that would entitle such Lender to receive
payments under Paragraphs 3(e) above, such Lender will use reasonable
efforts (i) to make, issue, fund or maintain the affected Loans of such
Lender through another lending office of such Lender or (ii) take such
other measures as such Lender may deem reasonable, if as a result thereof
the additional amounts which would otherwise be required to be paid to
such Lender pursuant to Paragraph 3(e) above would be materially reduced
or eliminated and if, as determined by such Lender in its sole discretion,
the making, issuing, funding or maintaining or purchasing of such Loans
through such other lending office or in accordance with such other
measures, as the case may be, would not otherwise materially adversely
affect such Loans or the interests of such Lender.
(2) If the Company receives a notice pursuant to
Paragraph 3(e) above stating that a Lender is unable to take such steps as
are set forth in subparagraph (1) above, so long as (i) no Potential
Default or Event of Default shall have occurred and be continuing, (ii)
the Company has obtained a commitment from another Lender or another
financial institution reasonably acceptable to the Agent to purchase at
par such
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Lender's Loans and Maximum Commitment, together with accrued interest and
fees and to assume all obligations of the Lender to be replaced under the
Loan Documents, and (iii) such Lender to be replaced is unwilling to
withdraw the applicable notices delivered to the Company, upon thirty (30)
days' prior written notice to such Lender and the Agent and payment of any
amounts then due to such Lender under Paragraph 3(e) above, the Company
may require, at the Company's expense and subject to payment of such
additional amounts as may become due under Paragraph 3(g) above as a
result of such action, the Lender giving such notice to assign, without
recourse, all of its Loans and Maximum Commitment, accrued interest and
fees to such other Lender or financial institution pursuant to the
provisions of Paragraph 12 below.
4. Miscellaneous Provisions.
4(a) Open Book Account. The obligation of the Company to repay
the Loans shall be evidenced by a notation on the books and records of the Agent
and each Lender. The Agent shall deliver a statement of account to the Company
and each Lender monthly setting forth the unpaid balance of Loans outstanding
hereunder. Such statement shall (absent clerical error) be deemed conclusively
correct and accepted by the Company and the Lenders unless any of such Persons
notifies the Agent to the contrary within ten (10) Business Days following
delivery of such statement. Upon any advance, conversion or prepayment with
respect to any Loan, each Lender is hereby authorized to record the date and
amount of each such advance and conversion made by such Lender, or the date and
amount of each such payment or prepayment of principal of the Loan made by such
Lender, the applicable Interest Period and interest rate with respect thereto,
on its books (or by any analogous method any Lender may elect consistent with
its customary practices) and any such recordation shall constitute prima facie
evidence of the accuracy of the information so recorded absent manifest error.
The failure of the Agent or any Lender to make any such notation shall not
affect in any manner or to any extent the Company's Obligations hereunder.
4(b) Nature and Place of Payments. All payments made on
account of the Obligations shall be made by the Company to the Agent for the
account of the Lenders or the Agent, as applicable, without setoff or
counterclaim, in lawful money of the United States of America in immediately
available same day funds, free and clear of and without deduction for any taxes,
fees or other charges of any nature whatsoever imposed by any taxing authority
and must be received by the Agent by 10:00 a.m. (Los Angeles time) on the day of
payment, it being expressly agreed and understood that if a payment is received
after 10:00 a.m. (Los Angeles time) by the Agent, such payment will be
considered to have been made by the Company on the next succeeding Business Day
and interest thereon shall be payable by the Company at the then applicable rate
during such extension. All payments on account of the Obligations shall be made
to the Agent through its Contact Office . If any payment required to be made by
the Company hereunder becomes due and payable on a day other than a Business
Day, the due date thereof shall be extended to the next succeeding Business Day
and interest thereon shall be payable at the then applicable rate during such
extension.
4(c) Prepayments.
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(1) The Company may prepay Loans hereunder in whole or
in part at any time.
(2) The Company shall pay in connection with any
prepayment hereunder all interest accrued but unpaid on Loans to which
such prepayment is applied, and all prepayment premiums, if any, on
Eurodollar Rate Loans to which such prepayment is applied, concurrently
with payment to the Agent of any principal amounts.
(3) Principal prepayments on the Term Loan shall be
applied against principal installments on the Term Loan in inverse order
of maturity.
4(d) Allocation of Payments Received. Prior to the occurrence
of an Event of Default and acceleration of the Obligations, all amounts received
by the Agent on account of the Loans shall be applied against Loans in such
order as the Company may direct in writing, subject to the requirement that
disbursements to the Lenders shall be in accordance with their respective
Percentage Shares. Such amounts shall be disbursed by the Agent to the Lenders
pro rata in accordance with their respective Percentage Shares by wire transfer
on the date of receipt if received by the Agent before 10:00 a.m. (Los Angeles
time) or if received later, by 12:00 noon (Los Angeles time) on the next
succeeding Business Day, without further interest payable by the Agent.
Following the occurrence of an Event of Default and acceleration of the
Obligations, all amounts received by the Agent on account of the Obligations
shall be disbursed by the Agent as follows:
(1) First, to the payment of reasonable expenses
incurred by the Agent in the performance of its duties and enforcement of
its rights and the rights of the Lenders under the Loan Documents,
including, without limitation, all costs and expenses of collection,
attorneys' fees, court costs and foreclosure expenses;
(2) Then, to the Lenders, pro rata in accordance with
their respective Percentage Shares, until all outstanding Loans and
interest accrued thereon and all other Obligations have been paid in full,
said amounts to be allocated first to interest and then, but only after
all accrued interest has been paid in full, to principal of Loans and,
finally, to all other Obligations; and
(3) Then, to such Persons as may be legally entitled
thereto.
4(e) Telephonic/Facsimile Communications. Any agreement of the
Agent and the Lenders herein to receive certain notices by telephone or
facsimile is solely for the convenience and at the request of the Company. The
Agent and the Lenders shall be entitled to rely on the authority of any Person
purporting to be an authorized Person and the Agent and the Lenders shall not
have any liability to the Company or other Person on account of any action taken
or not taken by the Agent or the Lenders in reliance upon such telephonic or
facsimile notice other than actions or inactions constituting gross negligence
or willful misconduct on the part of the Agent and the Lenders. The obligation
of the Company to repay the Loans shall not be affected in any way or to any
extent by any failure by the Agent and the Lenders to receive written
confirmation of any telephonic or facsimile notice or the receipt by the Agent
and the
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Lenders of a confirmation which is at variance with the terms understood by the
Agent and the Lenders to be contained in the telephonic or facsimile notice.
4(f) Use of Proceeds. The proceeds of the Loans shall be used
for general corporate purposes consistent with the terms and provisions of this
Agreement.
5. Collateral Security; Negative Pledge Agreement; Additional
Documents.
5(a) Collateral Security. As collateral security for the
Obligations, on or before the Effective Date the Company shall deliver to the
Agent each of the following (collectively, the "Initial Collateral Documents"):
(1) the Stock Pledge Agreement, pursuant to which the Company shall pledge and
grant to the Agent for the benefit of the Lenders and the Lenders from time to
time party hereto, a first priority perfected security interest in and lien upon
all existing and hereafter outstanding capital stock of the Pledged Subsidiaries
(collectively, the "Pledged Stock"); (2) all stock certificates evidencing the
Pledged Stock outstanding on the Effective Date accompanied by blank stock
powers covering such Pledged Stock, and (3) such UCC-1 financing statements as
the Agent shall request.
5(b) Negative Pledge Agreements. On or before the Effective
Date the Company shall cause each of the Pledged Subsidiaries to execute and
deliver to the Agent the Negative Pledge Agreement, pursuant to which such
Pledged Subsidiary shall covenant and agree that until the Obligations have been
paid in full and the credit facility evidenced hereby terminated, such Pledged
Subsidiary will not grant or permit to exist any Lien upon any of its property
or assets, including, without limitation, any capital stock of Subsidiaries
owned by it, other than Liens expressly created or permitted under the Loan
Documents.
5(c) Additional Documents. The Company agrees to execute and
deliver and to cause to be executed and delivered to the Agent from time to time
such documents, instruments and agreements as are in the Agent's judgment
reasonably necessary to obtain for the Agent on behalf of the Lenders the
benefit of the Pledged Stock, the Negative Pledge Agreements and the other Loan
Documents.
6. Conditions Precedent.
6(a) First Loan. As conditions precedent to the funding of the
first Loan hereunder:
(1) The Company shall have delivered or shall have had
delivered to the Agent, in form and substance reasonably satisfactory to
the Agent and its counsel, each of the following (with sufficient copies
for each of the Lenders):
(i) A duly executed copy of this Agreement;
(ii) A duly executed copy of the Stock Pledge
Agreement and the other Initial Collateral Documents;
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(iii) The Negative Pledge Agreement, duly executed
by each of the Pledged Subsidiaries;
(iv) Certified copies of resolutions of the Board
of Directors of the Company approving the execution and delivery of
the Loan Documents to which the Company is party;
(v) A certificate of the Secretary or an Assistant
Secretary of the Company certifying the names and true signatures of
the officers of the Company authorized to sign the Loan Documents to
which the Company is party;
(vi) Certified copies of resolutions of the Boards
of Directors of each of the Pledged Subsidiaries approving the
execution and delivery of the Negative Pledge Agreement to be
executed by such Pledged Subsidiary;
(vii) A certificate of the Secretary or an
Assistant Secretary of each of the Pledged Subsidiaries certifying
the names and true signatures of the officer(s) of the Pledged
Subsidiary authorized to sign the Negative Pledge Agreement to be
executed by such Pledged Subsidiary;
(viii) A copy of the Certificate of Incorporation
of the Company, certified by the Secretary of State of the State of
Delaware as of a recent date;
(ix) A copy of each of the Certificate of
Incorporation and Bylaws of the Company, certified by the Secretary
or an Assistant Secretary of the Company as of the date of this
Agreement as being accurate and complete;
(x) A certificate of good standing or status of
the Company from the Secretary of State of the States of Delaware
and California as of a recent date;
(xi) A Closing Certificate, duly executed by an
Authorized Officer, dated as of the date of the first Loan
hereunder, confirming the accuracy and completeness of the
representations and warranties of the Company set forth in the Loan
Documents and the fact that there does not exist a Potential Default
or an Event of Default;
(xii) A Financial Covenant Compliance Certificate,
duly executed by an Authorized Officer, dated at and as of June 30,
1998 and evidencing compliance by the appropriate Persons with the
requirements of Paragraphs 9(g)(3), 9(g)(4), 9(g)(5), 9(g)(7),
9(g)(8), 9(j), 9(k), 9(l), 9(m), 9(n), 9(o) and 9(p) below;
(xiii) An opinion of Xxxxxxxxx Xxxxx Xxxxxxx &
Xxxxx, counsel to the Company and the Pledged Subsidiaries;
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(xiv) For each of the Pledged Subsidiaries,
consents to the pledge of the Pledged Shares thereof (or written
waiver of the requirement for any such consent) from the Applicable
Insurance Regulatory Authority, in form and substance to the Agent
and the Lenders, or other evidence, including without limitation, an
opinion of counsel to the Company and the Pledged Subsidiaries
satisfactory to the Agent and the Lenders, that such filing or
waiver is not required;
(xv) Evidence satisfactory to the Agent and the
Lenders that upon the funding of the first Loan, all Indebtedness of
the Company to Sanwa with respect to the Existing Bridge Facility
shall have been paid in full, the credit facility evidenced thereby
terminated and any and all Liens in favor of Sanwa securing the
Existing Bridge Facility released; and
(xvi) The Agent's Fee Letter, duly executed by the
Company.
(2) The Agent shall have delivered to the Company and
each of the Lenders the initial Commitment Schedule, which shall be
acceptable to the Company and each of the Lenders.
(3) All acts and conditions (including, without
limitation, the obtaining of any necessary regulatory approvals and the
making of any required filings, recordings or registrations) required to
be done and performed and to have happened precedent to the execution,
delivery and performance of the Loan Documents and to constitute the same
legal, valid and binding obligations, enforceable in accordance with their
respective terms, shall have been done and performed and shall have
happened in due and strict compliance with all applicable laws.
(4) All documentation, including, without limitation,
documentation for corporate and legal proceedings in connection with the
transactions contemplated by the Loan Documents, shall be reasonably
satisfactory in form and substance to the Agent and its counsel.
6(b) All Loans. As conditions precedent to each Lender's
obligation to advance its Percentage Share of any Loan, including the first Loan
and including the conversion of any Loan to another type of Loan or the
continuation of any Eurodollar Rate Loan after the end of its applicable
Interest Period, at and as of the date of such advance, conversion or
continuation:
(1) There shall have been delivered to the Agent a Loan
Request therefor;
(2) The representations and warranties of the Company
contained in the Loan Documents shall be accurate and complete in all
material respects as if made on and as of the date of such advance,
conversion or continuance;
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(3) There shall not have occurred an Event of Default or
Potential Default; and
(4) If the Loan is a Revolving Loan, following the
funding thereof the aggregate principal amount of Revolving Loans
outstanding shall not exceed the limitations of Paragraph 1(a) above.
By delivering a Loan Request to the Agent hereunder, the Company shall be deemed
to have represented and warranted the accuracy and completeness of the
statements set forth in subparagraphs (b)(2) through (b)(4) above.
7. Representations and Warranties of the Company.
As an inducement to the Agent and each Lender to enter into this Agreement
and to make Loans as provided herein, the Company represents and warrants to the
Agent and each Lender that:
7(a) Financial Condition. The financial statements, dated the
Statement Date and the Interim Date, copies of which have heretofore been
furnished to each Lender, are complete and correct (subject, in the case of the
statements dated the Interim Date, to year-end audit adjustments) and present
fairly in accordance with GAAP the financial condition of the Company and its
consolidated Subsidiaries at such dates and the consolidated and consolidating
results of their operations and cash flows for the fiscal periods then ended. In
addition, the Company has furnished to each Lender for each of the Significant
Insurance Subsidiaries: (1) the annual Statutory Statement or any other
financial statement required to be filed by or on behalf of such Significant
Insurance Subsidiary with any Applicable Insurance Regulatory Authority for the
fiscal year ended December 31, 1997 and (2) the quarterly Statutory Statement or
any other financial statement required to be filed by or on behalf of such
Significant Insurance Subsidiary with any Applicable Insurance Regulatory
Authority for the fiscal quarter ended March 31, 1998. Such Statutory Statements
and other financial statements present fairly in accordance with SAP the
financial condition of the Significant Insurance Subsidiaries and the results of
operations for the fiscal periods then ended.
7(b) No Change. Since the Statement Date there has been no
material adverse change in the business, operations, assets or financial or
other condition of the Company, any Pledged Subsidiary or the Company and its
Subsidiaries taken as a whole. Except as expressly disclosed in writing to the
Agent and the Lenders prior to the Effective Date (including disclosures in
filings with the Securities and Exchange Commission), from the Statement Date
through the Effective Date neither the Company nor any of its Subsidiaries has
entered into, incurred or assumed any material long-term debt, mortgages, leases
or oral or written commitments, nor commenced any significant project, nor made
any purchase or acquisition of any significant property.
7(c) Corporate Existence; Compliance with Law. The Company and
each of its Subsidiaries: (1) is duly organized, validly existing and in good
standing as a corporation under the laws of the jurisdiction of its organization
and is qualified to do business in
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each jurisdiction where its ownership of property or conduct of business
requires such qualification and where failure to qualify would have a material
adverse effect on the Company or such Subsidiary or its property and/or business
or on the ability of the Company or such Subsidiary to pay or perform the
Obligations, (2) has the corporate power and authority and the legal right to
own and operate its property and to conduct business in the manner in which it
does and proposes so to do, (3) has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as not being or proposed to be conducted, and (4) is in compliance
with all Requirements of Law and Contractual Obligations, the failure to comply
with which could have a material adverse effect on the business, operations,
assets or financial or other condition of the Company, any Pledged Subsidiary or
the Company and its Subsidiaries taken as a whole.
7(d) Corporate Power; Authorization; Enforceable Obligations.
The Company and each of the Pledged Subsidiaries has the corporate power and
authority and the legal right to execute, deliver and perform the Loan Documents
to which it is a party and has taken all necessary corporate action to authorize
the execution, delivery and performance of such Loan Documents. The Loan
Documents to which the Company and the Pledged Subsidiaries are party have been
duly executed and delivered on behalf of such Person and, assuming that the Loan
Documents are duly executed by the Agent and the Lenders, as applicable,
constitute legal, valid and binding obligations of such Person enforceable
against such Person in accordance with their respective terms, subject to the
effect of applicable bankruptcy and other similar laws affecting the rights of
creditors generally and the effect of equitable principles whether applied in an
action at law or a suit in equity.
7(e) No Legal Bar. The execution, delivery and performance of
the Loan Documents to which the Company and the Pledged Subsidiaries are party,
the borrowing hereunder and the use of the proceeds thereof, will not violate
any Requirement of Law or any Contractual Obligation of the Company or any of
its Subsidiaries the violation of which could have a material adverse effect on
the business, operations, assets or financial or other condition of the Company,
any Pledged Subsidiary or the Company and its Subsidiaries taken as a whole or
create or result in the creation of any Lien on any assets of the Company or any
of its Subsidiaries, except Liens created pursuant to or permitted under the
Loan Documents.
7(f) No Material Litigation. Except as disclosed on Exhibit A
hereto, no litigation, investigation or proceeding of or before any arbitrator,
court or Governmental Authority is pending or, to the knowledge of the Company,
threatened by or against the Company or any of its Subsidiaries or against any
of such parties' properties or revenues which is likely to be adversely
determined and which, if adversely determined, is likely to have a material
adverse effect on the business, operations, property or financial or other
condition of the Company, any Pledged Subsidiary or the Company and its
Subsidiaries taken as a whole.
7(g) Taxes. The Company and each of its Subsidiaries have
filed or caused to be filed all material tax returns that are required to be
filed and have paid all taxes shown to be due and payable on said returns or on
any assessments made against them or any of their property other than taxes
which are being contested in good faith by appropriate
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proceedings and as to which the Company or applicable Subsidiary has established
adequate reserves in conformity with GAAP.
7(h) Investment Company Act. The Company is not an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
7(i) Subsidiaries. Attached hereto as Exhibit B is an accurate
and complete list of all direct and indirect Subsidiaries of the Company and of
Subsidiaries of the Company, their respective jurisdictions of incorporation and
the percentage of their capital stock owned by the Company or other
Subsidiaries. All of the issued and outstanding shares of capital stock of such
Subsidiaries have been duly authorized and issued and are fully paid and
non-assessable.
7(j) Federal Reserve Board Regulations. Neither the Company
nor any of its Subsidiaries is engaged or will engage, principally or as one of
its important activities, in the business of extending credit for the purpose of
"purchasing" or "carrying" any "margin stock" within the respective meanings of
such terms under Regulation U. No part of the proceeds of any Loan issued
hereunder will be used for "purchasing" or "carrying" "margin stock" as so
defined or for any purpose which violates, or which would be inconsistent with,
the provisions of the Regulations of the Board of Governors of the Federal
Reserve System.
7(k) ERISA. The Company and each of its Subsidiaries are in
compliance in all respects with the requirements of ERISA and no Reportable
Event has occurred under any Plan maintained by the Company or any of its
Subsidiaries which is likely to result in the termination of such Plan for
purposes of Title IV of ERISA.
7(l) Assets. The Company and each of its Subsidiaries has good
and marketable title to all property and assets reflected in the financial
statements dated the Interim Date referred to in Paragraph 7(a) above, except
property and assets sold or otherwise disposed of in compliance with Paragraph
9(h) below. Neither the Company nor any of its Subsidiaries has outstanding
Liens on any of its properties or assets nor are there any security agreements
to which the Company or any of its Subsidiaries is a party, or title retention
agreements, whether in the form of leases or otherwise, of any personal property
except as reflected in the financial statements referred to in Paragraph 7(a)
above or as permitted under Paragraph 9(a) below.
7(m) Securities Acts. The Company has not issued any
unregistered securities in violation of the registration requirements of Section
5 of the Securities Act of 1933, as amended, or any other law, and is not
violating any rule, regulation or requirement under the Securities Act of 1933,
as amended, or the Securities and Exchange Act of 1934, as amended. The Company
is not required to qualify an indenture under the Trust Indenture Act of 1939,
as amended, in connection with its execution and delivery of the Loan Documents.
7(n) Consents, Etc. No consent, approval, authorization of, or
registration, declaration or filing with any Governmental Authority or any other
Person is required on the part of the Company or any of its Subsidiaries in
connection with the execution and delivery of the Loan Documents or the
performance of or compliance with the terms,
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provisions and conditions hereof or thereof, including, without limitation, with
respect to the pledge of the Pledged Shares and in connection with a foreclosure
or other exercise of remedies with respect to the Pledged Shares, other than
such as have been obtained prior to or concurrently with the occurrence of the
Effective Date.
7(o) Copyrights, Patents, Trademarks and Licenses, etc. The
Company and each of its Subsidiaries owns or is licensed or otherwise has the
right to use all of the patents, trademarks, service marks, trade names,
copyrights, contractual franchises, authorizations and other rights that are
reasonably necessary for the operation of its business, without conflict with
the rights of any other Person. To the best knowledge of the Company, no slogan
or other advertising device, product, process, method, substance, part or other
material now employed, or now contemplated to be employed, by the Company or any
of its Subsidiaries infringes upon any rights held by any other Person. Except
as specifically disclosed on Exhibit A hereto, no claim or litigation regarding
any of the foregoing is pending or, to the knowledge of the Company, threatened,
and, to the knowledge of the Company, no patent, invention, device, application,
principle or any statute, law, rule, regulation, standard or code is pending or
proposed, which, in either case, could, reasonably be expected to have a
material adverse effect on the Company or any of its Subsidiaries.
7(p) Hazardous Materials. To the best knowledge of the
Company, neither the Company, any of its Subsidiaries nor any other Person has:
(1) caused or permitted any Hazardous Materials to be disposed of in, on, under
or about any Property or any part thereof, and no Property, nor any part
thereof, has ever been used (whether by the Company, any of its Subsidiaries or,
to the best knowledge of the Company, by any other Person) for activities
involving, directly or indirectly, the disposal of any Hazardous Materials; (2)
caused or permitted to be incorporated into or utilized in the construction of
any improvements located on any Property any chemical, material, or substance to
which exposure is prohibited, limited or regulated by any Hazardous Materials
Laws or which, even if not so regulated, is known to pose a hazard (either in
its present form or if disturbed or removed) to the health and safety of the
occupants of such Property or of property adjacent to the Property; or (3)
discovered any occurrence or condition on any Property that could cause such
Property or any part thereof to be in violation of any Hazardous Materials Laws.
7(q) Regulated Entities. The Company is not subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or any
other Federal or state statute or regulation limiting its ability to incur
Indebtedness.
7(r) Insurance Licenses. Each of the Insurance Subsidiaries
holds active Licenses for the transaction of the line or lines of insurance in
which it is engaged in all jurisdictions in which it conducts, directly or
indirectly, any material insurance business. No such License is the subject of a
proceeding for suspension or revocation or any similar proceedings, there is no
sustainable basis for such a suspension or revocation, and to the Company's
knowledge no such suspension or revocation has been threatened, in any case in
which such suspension or revocation is likely to have a material adverse effect
on the business,
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operations, property or financial or other condition of the Company, any Pledged
Subsidiary or the Company and its Subsidiaries taken as a whole.
8. Affirmative Covenants. The Company hereby covenants and agrees
with the Agent and each Lender that, as long as any Obligations remain unpaid or
any Lender has any obligation to advance its Percentage Share of Loans
hereunder, the Company shall:
8(a) Financial Statements. Furnish or cause to be furnished to
the Agent and to each of the Lenders directly (without the need for duplication
of any of the required items is the same are included in other materials being
delivered concurrently):
(1) Within one hundred five (105) days after the last
day of each fiscal year of the Company: (i) consolidated statements of
income and cash flows of the Company and its consolidated Subsidiaries for
such year and balance sheets as of the end of such year presented fairly
in accordance with GAAP and accompanied by an unqualified report of a firm
of independent certified public accountants reasonably acceptable to the
Agent, (ii) internally prepared consolidating statements of income and
balance sheets as of the end of such year presented fairly in accordance
with GAAP, and (iii) a copy of the Company's 10K filed with the Securities
and Exchange Commission for such fiscal year;
(2) Within sixty (60) days after the last day of each of
the first three fiscal quarters of the Company: (i) consolidated
statements of income and cash flows for the Company and its consolidated
Subsidiaries for such calendar quarter and balance sheets as of the end of
such calendar quarter, (ii) internally prepared consolidating statements
of income and balance sheets as of the end of such year presented fairly
in accordance with GAAP, and (iii) a copy of the Company's 10Q filed with
the Securities and Exchange Commission for such fiscal quarter;
(3) Concurrently with the delivery of each of the
financial statements delivered pursuant to subparagraph (1) and (2) above:
(i) a certificate of an Authorized Officer stating that such financial
statements are presented fairly in accordance with GAAP (subject, with
respect to interim periods, to ordinary year-end audit adjustments),
confirming as of the last day of such fiscal period the continuing
accuracy and completeness of all representations and warranties of the
Company set forth in the Loan Documents or, with respect to any
representation and warranty made as of a specific date, the accuracy and
completeness as of such date, and that there does not exist a Potential
Default or an Event of Default hereunder, and (ii) a Financial Covenant
Compliance Certificate;
(4) Within one hundred five (105) days after the last
day of each fiscal year of each Significant Insurance Subsidiary: (i) a
copy of the annual Statutory Statement or any other financial statement
required to be filed by or on behalf of such Significant Insurance
Subsidiary with any Applicable Insurance Regulatory Authority for such
fiscal year, and (ii) a certificate of an Authorized Officer of the
Company stating
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that such Statutory Statement and/or other financial statements are
presented fairly as required by the Applicable Insurance Regulatory
Authority and fairly represent the financial condition of such Significant
Insurance Subsidiary and that such Significant Insurance Subsidiary is in
compliance with all regulatory and/or statutory reserve requirements
applicable to it;
(5) Within sixty (60) days after the last day of each of
the first three fiscal quarters of each Significant Insurance Subsidiary:
(i) a copy of the quarterly Statutory Statement or any other financial
statement required to be filed by or on behalf of such Significant
Insurance Subsidiary with any Applicable Insurance Regulatory Authority
for such fiscal period, and (ii) a certificate of an Authorized Officer
stating that such financial statements are presented fairly as required by
the Applicable Insurance Regulatory Authority and fairly represent the
financial condition of such Significant Insurance Subsidiary and that such
Significant Insurance Subsidiary is in compliance with all regulatory
and/or statutory reserve requirements applicable to it;
(6) Within fifteen (15) days following the filing
thereof, copies of all financial statements, reports and proxy statements
and all regular and periodic reports and all registration statements which
the Company files with the Securities and Exchange Commission (or any
successor agency);
(7) As soon as received by the Company, a copy of any
final financial examination report (including, without limitation, any
report in respect of any tri-annual examination conducted by any
Applicable Insurance Regulatory Authority) or market conduct examination
report issued by or prepared for any governmental authority (including any
Applicable Insurance Regulatory Authority and NAIC) with respect to any
Significant Insurance Subsidiary;
(8) Immediately, notice of any actual (or threatened
action that could lead to the) suspension, termination or revocation of
any License of any Significant Insurance Subsidiary by any Governmental
Authority (including any Applicable Insurance Regulatory Authority),
including any notice by any Governmental Authority of the commencement of
any proceeding, hearing or administrative action to suspend, terminate or
revoke any such License;
(9) Promptly after the Company knows or has reason to
believe that any Applicable Insurance Regulatory Authority or other
regulator having jurisdiction over the Company or any of its Significant
Insurance Subsidiaries has commenced any proceeding, issued any order,
given notice of a formal hearing, sought relief from any court or taken
any similar action with respect to the Company or any of its Significant
Insurance Subsidiaries that seeks to, or would, result in the revocation
of any License or other authorization of the Company or any of its
Significant Insurance Subsidiaries or materially restrict the ability of
the Company or any of its Significant Insurance Subsidiaries to do
business in any jurisdiction, a notice describing in reasonable detail
such proceeding, order, hearing or similar action; and
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(10) Promptly following the delivery or receipt by the
Company or any of its Subsidiaries of any other material correspondence,
notice or report to or from any Applicable Insurance Regulatory Authority
(including, without limitation, any NAIC specified real estate and
mortgage survey, or any successor report or survey, filed with the NAIC),
a copy thereof.
8(b) Other Information. Promptly furnish or cause to be
furnished to the Agent (with the Agent providing the same to each of the
Lenders) such additional financial and other information, including, without
limitation, financial statements of the Company and the Pledged Subsidiaries, as
the Agent or any Lender (through the Agent) may from time to time reasonably
request, including, without limitation, such information as is necessary to
enable any Lender to participate out or assign any of its interests in the Loans
and other Obligations hereunder or to enable other financial institutions to
become signatories hereto.
8(c) Payment of Indebtedness. And shall cause each of its
Subsidiaries to, pay, discharge or otherwise satisfy at or before maturity or
before it becomes delinquent, defaulted or accelerated, as the case may be, all
its Indebtedness (including taxes), except: (1) Indebtedness being contested in
good faith and for which provision is made to the satisfaction of the Agent for
the payment thereof in the event the Company or such Subsidiary is found to be
obligated to pay such Indebtedness and which Indebtedness is thereupon promptly
paid by the Company or such Subsidiary, and (2) additional Indebtedness in an
amount not to exceed $1,000,000.00 in the aggregate at any date outstanding.
8(d) Maintenance of Existence and Properties. And shall cause
each of its Subsidiaries to: (1) maintain its corporate existence and maintain
all rights, privileges, licenses, approvals, franchises, properties and assets
necessary or desirable in the normal conduct of its business (except to the
extent expressly permitted under the Loan Documents), and (2) comply with all
Contractual Obligations and Requirements of Law the failure to comply with which
could have a material adverse effect on the business, operations, assets or
financial or other condition of the Company, any Pledged Subsidiary or the
Company and its Subsidiaries taken as a whole.
8(e) Inspection of Property; Books and Records; Discussions.
And shall cause each of its Subsidiaries to, keep proper books of record and
account in which full, true and correct entries in conformity with GAAP and all
Requirements of Law the failure to comply with which could have a material
adverse effect on the business, operations, assets or financial or other
condition of the Company, any Pledged Subsidiary or the Company and its
Subsidiaries taken as a whole shall be made of all dealings and transactions in
relation to its business and activities, and permit representatives of the Agent
or any Lender (at no cost or expense to the Company or any Subsidiary and during
normal business hours unless there shall have occurred and be continuing an
Event of Default) to visit and inspect any of its properties and examine and
make abstracts from any of its books and records at any reasonable time and as
often as may reasonably be desired by the Agent or any Lender and to discuss the
business, operations, properties and financial and other condition of the
Company and any of its
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Subsidiaries with officers and employees of such parties, and with their
independent certified public accountants.
8(f) Notices. Promptly give written notice to the Agent (with
the Agent providing the same to each of the Lenders) of:
(1) The occurrence of any Potential Default or Event of
Default;
(2) Any litigation or proceeding affecting the Company
or any of its Subsidiaries which is likely to be resolved adversely and
which if resolved adversely could have a material adverse effect on the
business, operations, property, or financial or other condition of the
Company, any Pledged Subsidiary or the Company and its Subsidiaries taken
as a whole;
(3) Any material adverse change in the business,
operations, property or financial or other condition of the Company, any
Pledged Subsidiary or the Company and its Subsidiaries taken as a whole;
and
(4) Prior to the occurrence thereof, the formation or
acquisition of any Subsidiary following the Effective Date as to which the
Company or such Subsidiary will make investments or contributions in an
aggregate amount in excess of $5,000,000.00.
8(g) Expenses. Pay all reasonable out-of-pocket expenses
(including fees and disbursements of counsel): (1) of the Agent incident to the
preparation, negotiation and administration of the Loan Documents and the
protection of the rights of the Lenders and the Agent under the Loan Documents,
and (2) of the Agent and, following the occurrence of an Event of Default, each
of the Lenders incident to the enforcement of payment of the Obligations,
whether by judicial proceedings or otherwise, including, without limitation, in
connection with bankruptcy, insolvency, liquidation, reorganization, moratorium
or other similar proceedings involving the Company or a "workout" of the
Obligations. The obligations of the Company under this Paragraph 8(g) shall be
effective and enforceable whether or not any Loan is funded hereunder and shall
survive payment of all other Obligations.
8(h) Loan Documents. And shall cause each of the Pledged
Subsidiaries to, comply with and observe all terms and conditions of the Loan
Documents to which the Company or any Pledged Subsidiary is party.
8(i) Insurance. And shall cause each of its Subsidiaries to,
obtain and maintain insurance with responsible companies in such amounts and
against such risks as are usually carried by corporations engaged in similar
businesses similarly situated, and furnish any of the Lenders on request (made
through the Agent) full information as to all such insurance.
8(j) Hazardous Materials. And shall cause each of its
Subsidiaries to:
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(1) Keep and maintain all Property in compliance with,
and shall not cause or permit any Property to be in violation of, any
federal, state or local laws, ordinances or regulations relating to
industrial hygiene or to the environmental conditions on, under or about
any Property, including, but not limited to, soil and ground water
conditions.
(2) Immediately advise the Agent in writing if any
Hazardous Materials Claims are hereafter asserted, and of any discharge,
release or disposal of any Hazardous Materials in, on, under or about any
Property. The Agent and the Lenders shall have the right to join and
participate in, as parties if they so elect, any legal proceedings or
actions initiated in connection with any Hazardous Materials Claims and to
have their reasonable attorneys' fees in connection therewith paid by the
Company.
(3) Without the prior written consent of the Agent and
the Lenders, take any remedial action in response to the presence of any
Hazardous Materials in, on, under or about any Property, nor enter into
any settlement agreement, consent decree or other compromise in respect to
any Hazardous Material Claims, which remedial action, settlement, consent
or compromise might, in the reasonable judgment of the Agent and the
Lenders impair the value of such Property; provided, however, that the
prior consent of the Agent and the Lenders shall not be necessary in the
event that the presence of Hazardous Materials in, on, under or about a
Property either poses an immediate threat to the health, safety or welfare
of any individual or is of such a nature that an immediate remedial
response is necessary and it is not possible to obtain the consent of the
Agent and the Lenders before taking such action, provided that in such
event the Company shall notify the Agent as soon as practicable of any
action so taken. The Agent and the Lenders agree not to withhold their
consent, where such consent is required hereunder, if either (i) a
particular remedial action is ordered by a court of competent
jurisdiction, or (ii) the Company establishes to the reasonable
satisfaction of the Agent and the Lenders that there is no reasonable
alternative to such remedial action which would result in less impairment
of the value of any Property.
8(k) Compliance with Laws. And shall cause each of its
Subsidiaries to, comply, with all Requirements of Law and Contractual
Obligations the failure to comply with which could have a material adverse
effect on the business, operations, assets or financial or other condition of
the Company, any Pledged Subsidiary or the Company and its consolidated
Subsidiaries taken as a whole.
8(l) Year 2000 Compliance. And shall cause each of its
Subsidiaries to, perform all acts reasonably necessary to ensure that the
Company and such Subsidiaries (and any business in which the Company or any of
its Subsidiaries holds a substantial interest) and all customers, suppliers and
vendors that are material to the Company's or any of its Subsidiaries'
businesses become Year 2000 Compliant in a timely manner. Such acts shall
include, without limitation, performing a comprehensive review and assessment of
all of the systems of the Company and its Subsidiaries and adopting a detailed
plan, with itemized budget, for the remediation and testing of such systems, as
well as ascertaining that the material customers,
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suppliers and vendors of the Company and its Subsidiaries are taking all
appropriate steps to become Year 2000 Compliant on a timely basis. For purposes
hereof, the phrase "Year 2000 Compliant" shall mean, in regard to any entity,
that the software, hardware, firmware, equipment, goods and systems utilized by
and material to the business operations or financial condition of such entity,
will properly perform date sensitive functions before, during and after the year
2000. The Company shall immediately upon request provide the Agent with such
certifications or other evidence of the compliance of the Company and its
Subsidiaries with the terms hereof as the Agent may from time to time require.
9. Negative Covenants. The Company hereby agrees that, as long as
any Obligations remain unpaid or any Lender has any obligation to advance its
Percentage Share of Loans hereunder, the Company shall not, directly or
indirectly:
9(a) Liens. Create, incur, assume or suffer to exist any Lien
upon the Pledged Stock, and the Company shall not and not permit any Subsidiary
to, create, incur, assume or suffer to exist any Lien upon any of its or their
other property and assets except:
(1) Liens existing on the Effective Date and reflected
in the financial statements referred to in Paragraph 7(a) above (other
than Liens securing the Existing Bridge Facility, which Liens will be
released on the Effective Date);
(2) Liens or charges for current taxes, assessments or
other governmental charges which are not delinquent or which remain
payable without penalty, or the validity of which are contested in good
faith by appropriate proceedings upon stay of execution of the enforcement
thereof, provided that the Company or such Subsidiary, as applicable,
shall have set aside on its books and shall maintain adequate reserves for
the payment of same in conformity with GAAP;
(3) Liens, deposits or pledges made to secure statutory
obligations, surety or appeal bonds, or bonds to obtain, or to obtain the
release of, attachments, writs of garnishment or for stay of execution, or
to secure the performance of bids, tenders, contracts (other than for the
payment of borrowed money), leases or for purposes of like general nature
in the ordinary course of the business of the Company or such Subsidiary;
(4) Purchase money security interests for property
hereafter acquired, conditional sale agreements, or other title retention
agreements, with respect to property hereafter acquired; provided,
however, that no such security interest or agreement shall extend to any
property other than the property acquired;
(5) Statutory Liens of landlord's, carriers,
warehousemen, mechanics, materialmen and other similar Liens imposed by
law and created in the ordinary course of business for amounts not yet due
or which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves are being maintained in conformity
with GAAP;
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(6) Attachment and judgment Liens not otherwise
constituting an Event of Default any of which Liens are in existence less
than thirty (30) days after the entry thereof or with respect to which
execution has been stayed, payment is covered in full by insurance, or the
Company or such Subsidiary shall in good faith be prosecuting an appeal or
proceedings for review and shall have set aside on its books such reserves
as may be required by GAAP with respect to such judgment or award;
(7) Liens incidental to the conduct of the business or
the ownership of the property of the Company or such Subsidiary which were
not incurred in connection with borrowed money and which do not in the
aggregate materially detract from the value of the property or materially
impair the use thereof in the operation of the business and which, in any
event, do not secure obligations aggregating in excess for the Company and
all Subsidiaries of $1,000,000.00;
(8) Liens securing Indebtedness of Insurance
Subsidiaries incurred or assumed in connection with the settlement of
claim losses in the ordinary course of business of such Insurance
Subsidiaries;
(9) Easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Property or minor imperfections in title
thereto that, in the aggregate, are not material in amount, and that do
not in any case materially detract from the value of the Property subject
thereto or interfere with the ordinary conduct of the business of the
Company or any of its Subsidiaries;
(10) Liens on assets of a Person which becomes a
Subsidiary after the date of this Agreement pursuant to a Permitted
Acquisition, which Liens are in existence at such time;
(11) Liens on assets of GFI securing the GFI Warehouse
Debt; and
(12) Liens securing Other Permitted Secured Debt.
9(b) Indebtedness. And shall not permit any Subsidiary to,
create, incur, assume or suffer to exist, or otherwise become or be liable in
respect of any Indebtedness except:
(1) The Obligations;
(2) Indebtedness reflected in the financial statements
referred to in Paragraph 7(a) above (other than Indebtedness of the
Company to Sanwa under the Existing Bridge Facility, which Indebtedness
will be paid in full on the Effective Date);
(3) Trade debt incurred in the ordinary course of
business;
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(4) Indebtedness secured by Liens permitted under
Paragraph 9(a) above;
(5) Subordinated Debt;
(6) Guaranties issued by the Company and other
contingent obligations of the Company covering Indebtedness of
Subsidiaries to non-Affiliates in an aggregate amount not to exceed: (i)
in the case of all Subsidiaries other than GFI, $10,000,000.00, and (ii)
in the case of GFI, that dollar amount which when added to the aggregate
dollar amount of all outstanding advances and loans to, and contributions
by the Company to, and investments by the Company in, GFI from and after
December 31, 1997, do not exceed $35,000,000.00;
(7) Capital leases existing on the date hereof or
otherwise incurred in the ordinary course of business;
(8) Indebtedness of a Person which becomes a Subsidiary
after the date of this Agreement pursuant to a Permitted Acquisition,
which Indebtedness is in existence at such time; and
(9) Other Permitted Secured and Unsecured Debt.
9(c) Consolidation and Merger. And shall not permit any
Subsidiary to, liquidate or dissolve or enter into any consolidation or merger,
partnership, joint venture, syndicate or other combination except:
(1) A consolidation or merger consummated in connection
with a Permitted Acquisition and subject to the Company (if the Company is
involved) being the surviving corporation, or if the Permitted Acquisition
involves a Pledged Subsidiary, such Pledged
Subsidiary being the surviving corporation;
(2) The consolidation or merger of a Pledged Subsidiary
into the Company with the Company being the surviving corporation;
(3) The consolidation or merger of a Pledged Subsidiary
into another Pledged Subsidiary;
(4) The consolidation or merger of a Subsidiary other
than a Pledged Subsidiary into another Subsidiary which is not a Pledged
Subsidiary; and
(5) A partnership or joint venture in which the
investment of the Company or such Subsidiary will not violate Paragraph
9(g) below;
provided, however, that as a condition precedent to any consolidation or merger
otherwise permitted hereunder, there shall have been delivered to the Agent and
the Lenders, prior to the consummation thereof or to the entering into of any
binding agreement to consummate the same,
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evidence satisfactory to the Agent and the Lenders that neither prior to or
after giving effect to such consolidation or merger will there exist an Event of
Default or Potential Default.
9(d) Acquisitions. And shall not permit any Subsidiary to,
purchase or acquire or incur liability for the purchase or acquisition of all or
any substantial portion of the assets or business of any Person, whether in a
single transaction or a series of transactions, other than Permitted
Acquisitions; provided, however, that as a condition precedent to the right of
the Company or any Subsidiary to consummate a Permitted Acquisition hereunder,
there shall have been delivered to the Agent and the Lenders no later than
thirty (30) days prior thereto evidence satisfactory to the Agent and the
Lenders, including, without limitation, pro forma financial statements in form
and detail satisfactory to the Agent and the Lenders, demonstrating that: (1)
such acquisition meets all requirements set forth in the definition of
"Permitted Acquisition" and (2) both before and after giving effect thereto
there shall not exist an Event of Default or Potential Default.
9(e) Payment of Dividends. Declare or pay any dividends upon
its shares of stock now or hereafter outstanding or make any distribution of
assets to its stockholders as such, whether in cash, property or securities,
except: (1) dividends payable in shares of capital stock and cash in lieu of
fractional shares or in options, warrants or other rights to purchase shares of
capital stock and dividends, (2) dividends payable by the Subsidiaries of the
Company to the Company or to other Subsidiaries of the Company (it being agreed
and understood that the Company shall not permit to exist any Contractual
Obligations restricting the payment of dividends by any Subsidiary to the
Company except those imposed by Applicable Insurance Regulatory Authorities),
and (3) if, but only if, at the date of payment thereof and both before and
after giving effect to the payment thereof there does not exist an Event of
Default or Potential Default, dividends payable by the Company to its
shareholders.
9(f) Purchase or Retirement of Stock. Acquire, purchase,
redeem or retire any shares of its capital stock now or hereafter outstanding at
any time at which there shall exist an Event of Default or Potential Default.
9(g) Investments; Advances. And shall not permit any
Subsidiary to, make or commit to make any advance, loan or extension of credit
or capital contribution to, or purchase any stock, bonds, notes, debentures or
other securities of, or make any other investment in, any Person other than:
(1) Extensions of credit to customers in the ordinary
course of the title insurance business and ancillary or related lines of
business;
(2) Extensions of credit and capital contributions to
and investments in Subsidiaries;
(3) Advances to and investments by the Company in GFI
from and after December 31, 1997 in an outstanding aggregate dollar amount
which when taken with the aggregate dollar amount of outstanding
guaranties and other contingent liabilities
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of the Company for Indebtedness of GFI to non-Affiliates incurred or
assumed from and after December 31, 1997 does not exceed $35,000,000.00;
(4) Note and loan receivables held by the Company and
Subsidiaries (other than GFI) with an aggregate book value, determined in
accordance with GAAP, for the Company and all such Subsidiaries not to
exceed $20,000,000.00;
(5) Direct and indirect investments in real estate in an
aggregate amount not to exceed $10,000,000.00;
(6) Primary Quality Investments;
(7) Secondary Quality Investments with an aggregate cost
not to exceed sixty six percent (66%) of the Company's Effective Tangible
Net Worth; provided, however, that such Secondary Quality Investments
shall be diversified such that no single such Secondary Quality Investment
with a cost in excess of five percent (5%) of the Company's Effective
Tangible Net Worth shall be in any single Person, except that the Company
may make investments in Secondary Quality Investments which do not meet
such diversification requirement so long as the aggregate cost of such
Secondary Quality Investments does not exceed twenty five percent (25%) of
the Company's Effective Tangible Net Worth;
(8) Other debt and equity investments which are not
traded in recognized public markets in an aggregate cost not to exceed
that amount which when added to the aggregate cost of Secondary Quality
Investments which do not meet the diversification requirements of the
proviso of subparagraph (7) above would exceed twenty five percent (25%)
of the Company's Effective Tangible Net Worth;
(9) Investments in American Title Company in existence
on the Effective Date, as such investments may be increased in the event
of the sale of National Title Company of New York; and
(10) Investments consisting of Permitted Acquisitions.
9(h) Sale of Assets. And shall not permit any Subsidiary to,
sell, lease, assign, transfer or otherwise dispose of any of its assets (other
than obsolete or worn out property), whether now owned or hereafter acquired,
other than in the ordinary course of business as presently conducted and at fair
market value; provided, however, that the Company and its Subsidiaries may sell
the stock of Subsidiaries (other than the Pledged Subsidiaries) at fair market
value and provided that prior to and after giving effect to such sale there does
not exist an Event of Default or Potential Default.
9(i) Restriction on Acquisitions. And shall not permit any
Subsidiary to, acquire more than fifty percent (50%) in fair market value of
equity interests in or assets of any Person, whether in a single transaction or
a series of transactions, unless such acquisition shall constitute a Permitted
Acquisition.
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9(j) Capital Expenditures. And shall not permit any Subsidiary
to, make Capital Expenditures in excess of $20,000,000.00 in the aggregate for
the Company and all Subsidiaries during any fiscal year; provided, however, that
the limitations contained in this Paragraph 9(j) shall not apply to Capital
Expenditures associated with Permitted Acquisitions.
9(k) Minimum Effective Tangible Net Worth. Permit at any date
the Company's Effective Tangible Net Worth to be less than: (1) $206,000,000.00,
plus (2) fifty percent (50%) of consolidated Net Profit After Taxes of the
Company for each fiscal quarter, determined at the end of each fiscal quarter
beginning with the fiscal quarter ending March 31, 1998, plus (3) one hundred
percent (100%) of the net proceeds of any equity offering of the Company or the
conversion of debt into equity, consummated following the Effective Date, plus
(4) one hundred percent (100%) of any increase in the equity of the Company
related to the valuation of stock issued for the purposes of consummating any
Permitted Acquisition following the Effective Date.
9(l) Minimum Net Worth of FNTC. Permit at any date FNTC's net
worth, determined in accordance with GAAP, to be less than: (1) $26,000,000.00,
plus (2) fifty percent (50%) of Net Profits After Taxes of FNTC for each fiscal
quarter, determined at the end of each fiscal quarter beginning with the fiscal
quarter ending March 31, 1998.
9(m) Leverage Ratio. Permit at any date the Company's ratio of
Debt to Effective Tangible Net Worth to be greater than 1.15:1.00.
9(n) Minimum Cash Flow Coverage Ratio. Permit as of the
last day of any fiscal quarter, the ratio of:
(1) Adjusted Cash Flow of the Company during such fiscal
quarter and the immediately preceding three fiscal quarters, to
(2) The sum of, during such fiscal quarter and the
immediately preceding three fiscal quarters: (i) Adjusted Scheduled
Principal Payments, plus (ii) interest expense (excluding amortization of
the original issue discount on the XXXXx during such period), plus (iii)
net claims paid and net credit write-offs, plus (iv) dividends paid by the
Company,
to be less than 1.20:1.00.
9(o) Minimum Statutory Surplus. Permit any date the aggregate
Statutory Surplus of FNNEW and FNTIC to be less than $75,000,000.00.
9(p) Minimum Primary Investment Portfolio. Permit at any date
the fair market value of Primary Quality Investments held by the Company to be
less than reserves for claim losses, determined in accordance with GAAP.
9(q) Subordinated Debt. Make or permit to be made any
prepayment on or repurchase any of the XXXXx or make any prepayment on or
repurchase any other
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Subordinated Debt or amend or consent to the amendment or waiver of any term or
provision of the Subordinated XXXXx Debt Indenture if prior to or after giving
effect to such action there exists an Event of Default or Potential Default.
9(r) Restriction on Negative Pledges. And will not permit any
Subsidiary to, grant, enter into or permit to remain in effect any agreement
with any Person (other than the Agent and the Lenders pursuant to the Negative
Pledge Agreements and Paragraph 9(a) above) which would have the effect of
prohibiting or restricting in any manner the Company or any of the Pledged
Subsidiaries from granting to the Agent for the benefit of the Lenders such
Liens upon assets and properties of the Company and the Pledged Subsidiaries as
the Company, such Pledged Subsidiaries and the Lenders might otherwise agree.
9(s) Formation of Additional Subsidiaries. Following the
Effective Date form, or permit any Subsidiary to form, any additional Subsidiary
other than in connection with Permitted Acquisitions.
10. Events of Default. Upon the occurrence of any of the following
events (an "Event of Default"):
10(a) The Company shall fail to pay any principal on the Loans
on the date when due or fail to pay within five days of the date when due any
other Obligation; or
10(b) Any representation or warranty made by the Company in
any Loan Document shall be inaccurate or incomplete in any material respect on
or as of the date made or deemed made; or
10(c) The Company shall fail to maintain its corporate
existence or the corporate existence of any Pledged Subsidiary or shall default
in the observance or performance of, or there shall otherwise occur a breach of,
any covenant or agreement contained in Paragraph 9 above; or
10(d) The Company shall fail to observe or perform any other
term or provision contained in the Loan Documents and such failure shall
continue for fifteen (15) days after the Company became aware of such failure;
or
10(e) The Company or any Subsidiary shall default in any
payment of principal of or interest on any Indebtedness (other than the
Obligations) in an aggregate amount for the Company and all of its Subsidiaries
in excess of $1,000,000.00 (and any grace period applicable thereto shall have
expired) or any other event shall occur, the effect of which is to permit such
Indebtedness to be declared or otherwise to become due prior to its stated
maturity; or
10(f) (1) The Company or any of its Subsidiaries, shall
commence any case, proceeding or other action (i) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or
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seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or
(ii) seeking appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its assets, or the Company
or any of its Subsidiaries shall make a general assignment for the benefit of
its creditors; or (2) there shall be commenced against the Company or any of its
Subsidiaries, any case, proceeding or other action of a nature referred to in
clause (1) above which (i) results in the entry of an order for relief or any
such adjudication or appointment, or (ii) remains undismissed, undischarged or
unbonded for a period of thirty (30) days; or (3) there shall be commenced
against the Company or any of its Subsidiaries, any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or substantially all of its assets which results in
the entry of an order for any such relief which shall not have been vacated,
discharged, stayed, satisfied or bonded pending appeal within sixty (60) days
from the entry thereof; or (4) the Company or any of its Subsidiaries, shall
take any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in (other than in connection with a final settlement), any of the
acts set forth in clause (1), (2) or (3) above; or (5) the Company or any of its
Subsidiaries, shall generally not, or shall be unable to, or shall admit in
writing its inability to pay its debts as they become due; or
10(g) (1) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (2) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or nor waived, shall exist with respect to any
Plan, (3) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable Event or
institution of proceedings is, in the reasonable opinion of the Agent, likely to
result in the termination of such Plan for purposes of Title IV of ERISA, and,
in the case of a Reportable Event, the continuance of such Reportable Event
unremedied for ten days after notice of such Reportable Event pursuant to
Section 4043(a), (c) or (d) of ERISA is given or the continuance of such
proceedings for ten days after commencement thereof, as the case may be, (4) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (5) any
withdrawal liability to a Multiemployer Plan shall be incurred by the Company or
(6) any other event or condition shall occur or exist; and in each case in
clauses (1) through (6) above, such event or condition, together with all other
such events or conditions, if any, is likely to subject the Company or any of
its Subsidiaries to any tax, penalty or other liabilities in the aggregate
material in relation to the business, operations, property or financial or other
condition of the Company, any Pledged Subsidiary or the Company and its
Subsidiaries taken as a whole; or
10(h) One or more judgments or decrees shall be entered
against the Company or any of its Subsidiaries and such judgments or decrees
(other than decrees involving amounts in the aggregate of less than
$5,000,000.00) shall not have been vacated, discharged, stayed, satisfied or
bonded pending appeal within thirty (30) days from the entry thereof or in any
event later than five days prior to the date of any proposed sale thereunder; or
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10(i) Any Pledged Subsidiary shall fail to observe or perform
any provision of its Negative Pledge Agreement or shall attempt to rescind or
revoke such Negative Pledge Agreement; or
10(k) There shall occur a Change of Control;
THEN, automatically upon the occurrence of an Event of Default under Paragraph
10(f) above, at the option of any Lender upon the occurrence of an Event of
Default under Paragraph 10(a) above and, in all other cases, at the option of
the Majority Lenders, each Lender's obligation to make Loans shall terminate and
the principal balance of outstanding Loans and interest accrued but unpaid
thereon and all other Obligations shall become immediately due and payable,
without demand upon or presentment to the Company, which are expressly waived by
the Company and the Agent and the Lenders may immediately exercise all rights,
powers and remedies available to them at law, in equity or otherwise, including,
without limitation, pursuant to the Stock Pledge Agreement.
11. The Agent.
11(a) Appointment. Each Lender hereby irrevocably designates
and appoints the Agent as the agent of such Lender under the Loan Documents and
each such Lender hereby irrevocably authorizes the Agent, as the agent for such
Lender, to take such action on its behalf under the provisions of the Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of the Loan Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary elsewhere in the Loan Documents, the Agent shall not have any
duties or responsibilities, except those expressly set forth herein or therein,
or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into the Loan Documents or otherwise exist against the Agent. The Company shall
pay to the Agent an agency fee in such amount and at such times as the Agent and
the Company may from time to time agree in writing.
11(b) Delegation of Duties. The Agent may execute any of its
duties under the Loan Documents by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care.
11(c) Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(1) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with the Loan Documents (except for its or such
Person's own gross negligence or willful misconduct), or (2) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by the Company or any officer thereof contained in the Loan
Documents or in any certificate, report, statement or other document referred to
or provided for in, or received by the Agent under or in connection with the
Loan Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of the Loan Documents or for any
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failure of the Company to perform its obligations hereunder. The Agent shall not
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, the Loan Documents or to inspect the properties, books or records of the
Company.
11(d) Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certification, affidavit, letter, cablegram, telegram,
telecopy, telex or teletype message, statement, order or other document or
conversation reasonably believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Company), independent accountants and other experts selected by the Agent. The
Agent may deem and treat the payee of any note as the owner thereof for all
purposes. As to the Lenders: (1) the Agent shall be fully justified in failing
or refusing to take any action under the Loan Documents unless it shall first
receive such advice or concurrence of the Majority Lenders or all of the
Lenders, as appropriate, or it shall first be indemnified to its satisfaction by
the Lenders ratably in accordance with their respective Percentage Shares
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any action (except for liabilities and expenses
resulting from the Agent's gross negligence or willful misconduct), and (2) the
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under the Loan Documents in accordance with a request of the Majority
Lenders or all of the Lenders, as appropriate, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders.
11(e) Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Potential Default or Event of
Default hereunder unless the Agent has received notice from a Lender or the
Company referring to the Loan Documents, describing such Potential Default or
Event of Default and stating that such notice is a "notice of default." In the
event that the Agent receives such a notice, the Agent shall give notice thereof
to the Lenders. The Agent shall take such action with respect to such Potential
Default or Event of Default as shall be reasonably directed by the Majority
Lenders provided that such action is consistent with the provisions of this
Agreement; provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Potential Default or Event
of Default as it shall deem advisable in the best interest of the Lenders.
11(f) Non-Reliance on Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Company, shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Company and made its own decision to make its loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently
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and without reliance upon the Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Company. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Company which may come into the possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
11(g) Indemnification. The Lenders agree to indemnify the
Agent in its capacity as such (to the extent not reimbursed by the Company and
without limiting the obligation of the Company to do so), ratably according to
the respective amounts of their Percentage Shares, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including without limitation at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of the Loan Documents or any documents contemplated
by or referred to herein or the transactions contemplated hereby or any action
taken or omitted by the Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's gross negligence or
willful misconduct. The agreements in this subsection shall survive the payment
of the Obligations.
11(h) Agent in Its Individual Capacity. The Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Company as though the Agent were not the Agent
hereunder. With respect to such loans made or renewed by them, the Agent shall
have the same rights and powers under the Loan Documents as any Lender and may
exercise the same as though it were not the Agent, and the terms "Lender" and
"Lenders" shall include the Agent in its individual capacity.
11(i) Successor Agent. The Agent may resign as Agent under the
Loan Documents upon sixty (60) days' notice to the Lenders and agrees that it
will so resign in the event it ceases to hold any Percentage Share of the
Obligations. The Agent may be removed from such capacity in the event the
Lenders (other than the Agent) shall determine in their reasonable business
judgment that the Agent has consistently failed to perform the obligations of
the Agent hereunder. If the Agent shall resign or be removed as provided herein,
then the Lenders (other than the Agent) shall appoint from among the Lenders a
successor agent or, if such Lenders are unable to agree on the appointment of a
successor agent, the Agent shall appoint a successor agent for the Lenders
(which successor agent shall, in either case and assuming that there does not
exist a Potential Default or Event of Default, be reasonably acceptable to the
Company), whereupon such successor agent shall succeed to the rights, powers and
duties of the Agent, and the term "Agent" shall mean such successor agent
effective upon its appointment, and the former Agent's rights, powers and duties
as Agent shall be terminated,
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without any other or further act or deed on the part of such former Agent or any
of the parties to this Agreement or any of the Loan Documents or successors
thereto. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Paragraph 11 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under the Loan Documents.
12. Additional Lenders; Assignments and Participations.
12(a) Addition of New Lender.
(1) Any Lender (an "Assigning Lender") may at any time
propose that one or more financial institutions (each, an "Applicant
Financial Institution") become an additional Lender hereunder by way of
assignment by such Assigning Lender of all or a portion of such Assigning
Lender's Maximum Commitment by notifying the Agent of the identity of such
Applicant Financial Institution and such Applicant Financial Institution's
proposed Maximum Commitment. The addition of any Applicant Financial
Institution shall be subject to:
(i) The prior written consent of the Agent and,
but only if there shall not exist an Event of Default or Potential
Default, the Company, no such consent to be unreasonably withheld;
and
(ii) Delivery of each of the items and the
occurrence of each of the events described in subparagraph (2)
below.
(2) Assuming delivery of the consent of the Agent as
required pursuant to subparagraph (1)(i) above, the Agent and the
Assigning Lender shall mutually agree on the Adjustment Date on which such
Applicant Financial Institution shall become a party hereto and a Lender
hereunder. On such Adjustment Date:
(i) The Agent shall deliver to the Company and
each of the Lenders a replacement Commitment Schedule to be
effective as of such Adjustment Date, reflecting the Lenders'
respective Maximum Commitments and Percentage Shares after giving
effect to the assignment.
(ii) No later than 11:30 a.m. (Los Angeles time)
on such Adjustment Date, such Applicant Financial Institution shall
pay to the Agent for delivery to the Assigning Lender an amount
equal to such Applicant Financial Institution's Percentage Share of
Loans outstanding held by the Assigning Lender. The Agent shall
thereupon remit such amount to the Assigning Lender. Following such
Adjustment Date, fees and interest accrued on the Obligations to but
not including such Adjustment Date shall be payable to the Lenders
in accordance with their respective Percentage Shares prior to such
Adjustment Date before giving effect to the readjustment thereof
pursuant to the Commitment Schedule provided by the Agent on such
Adjustment Date.
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(iii) The Agent, the Company, the Assigning Lender
and the Applicant Financial Institution shall execute and deliver an
Assignment and Acceptance Agreement, which Assignment and Acceptance
Agreement shall constitute an amendment to this Agreement and the
other Loan Documents to the extent necessary to reflect the
inclusion of the Applicant Financial Institution as a Lender
hereunder.
(iv) The Applicant Financial Institution shall pay
to the Agent a registration fee of $3,500.00.
Subject to the requirements described above, on the Adjustment Date the
Applicant Financial Institution shall become a party hereto and a Lender
hereunder and shall be entitled to all rights, benefits and privileges accorded
a Lender under the Loan Documents and shall be subject to all obligations of a
Lender under the Loan Documents.
12(b) Assignments Among Existing Lenders. Any Lender may at
any time agree to assign a portion of such Lender's Maximum Commitment and
Percentage Share to one or more of its Affiliates or to another existing Lender
(a "Transferee Lender"). In such event, such Lender and the Transferee Lender
shall so notify the Agent and the Company of the Adjustment Date on which such
assignment is to be effective. On such Adjustment Date:
(1) The Company shall deliver to the Agent, and each of
the Lenders a Commitment Schedule to be effective as of such Adjustment
Date, reflecting the Aggregate Credit Limit and the Lenders' respective
Maximum Commitments and Percentage Shares.
(2) The Agent, the Company, the assigning Lender and the
Transferee Lender shall execute and deliver an Assignment and Acceptance
Agreement, which shall constitute an amendment to this Agreement and the
other Loan Documents to the extent necessary to reflect such transfer.
(3) No later than 12:30 p.m. (Los Angeles time) on such
Adjustment Date, the Transferee Lender shall pay to the Agent an amount
equal to such Transferee Lender's Percentage Share of Loans outstanding in
excess of such Transferee Lender's previous Percentage Share thereof. The
Agent shall thereupon remit to the transferring Lender the amount thereof.
12(c) Minimum Loan Commitment. Notwithstanding anything to the
contrary contained herein, the inclusion of any Applicant Financial Institution
as a Lender hereunder pursuant to Paragraph 12(a) above and the assignment by an
existing Lender of a portion of such Lender's Maximum Commitment to a Transferee
Lender pursuant to Paragraph 12(b) above shall be subject to the following
restrictions:
(1) If an Applicant Financial Institution is acquiring a
portion of an existing Lender's Maximum Commitment by way of an assignment
from such existing Lender, then such assignment of Maximum Commitment must
be in the minimum
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amount of $5,000,000.00 (or if in a higher amount, in integral multiples
of $1,000,000.00 in excess thereof) and such existing Lender must continue
to hold a Maximum Commitment of not less than $5,000,000.00 following the
consummation of the contemplated assignment;
(2) If an existing Lender is assigning a portion of its
Maximum Commitment to a Transferee Lender, such assignment of Maximum
Commitment is in the minimum amount of $5,000,000.00 (or if in a higher
amount, in integral multiples of $1,000,000.00 in excess thereof) and such
existing Lender shall continue to hold a Maximum Commitment of not less
than $5,000,000.00 following the consummation of the contemplated
assignment.
12(d) Sub-Participations by Lenders. Any Lender may at any
time sell participating interests in any of the Obligations held by such Lender
and its Maximum Commitment hereunder; provided, however, that:
(1) No participation contemplated by this Paragraph
12(d) shall relieve such Lender from its obligations hereunder or under
any other Loan Document;
(2) Such Lender shall remain solely responsible for the
performance of such obligations;
(3) The Company, the Agent, and the other Lenders shall
continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under the Loan Documents; and
(4) The participation agreement or other document
evidencing the sale of such participating interest shall not require the
Lender to obtain the consent of the purchaser thereof to any amendment or
waiver with respect to the Loan Documents other than as to amendments and
waivers requiring the consent of one hundred percent (100%) of the Lenders
pursuant to Paragraph 13(b) below.
12(e) Federal Reserve Bank. Notwithstanding the provisions of
Paragraphs 12(a) and 12(b) above, any Lender may at any time pledge or assign
all or any portion of such Lender's rights under this Agreement and the other
Loan Documents to a Federal Reserve Bank.
13. Miscellaneous Provisions.
13(a) No Assignment. The Company may not assign its rights or
obligations under this Agreement or the other Loan Documents without the prior
written consent of one hundred percent (100%) of the Agent and the Lenders. Any
attempted assignment in violation of this Paragraph 13(a) shall be automatically
deemed null and void. Subject to the foregoing, all provisions contained in this
Agreement or any document or agreement referred to herein or relating hereto
shall inure to the benefit of each Lender, its successors and assigns, and shall
be binding upon the Company, its successors and assigns.
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13(b) Amendment. Neither this Agreement nor any other Loan
Document may be amended or terms or provisions hereof waived unless such
amendment or waiver is in writing and signed by the Majority Lenders, the Agent
and the Company; provided, however, that without the prior written consent of
one hundred percent (100%) of the Agent and the Lenders and (other than with
respect to subparagraph (3) below) the Company, no amendment or waiver shall:
(1) reduce the principal of, or rate of interest or fees on, the Loans or extend
or otherwise modify the required amount or due date for any Loan, (2) modify any
Lender's Maximum Commitment or Percentage Share (except as the result of an
assignment permitted under Paragraph 12 above), (3) modify any provision of the
Loan Documents requiring one hundred percent (100%) of the Lenders to act, (4)
modify the definition of "Majority Lenders," (5) release any Pledged Subsidiary
from its obligations under its Negative Pledge Agreement or release any
collateral at any time held for the Obligations, or (6) amend this Paragraph
13(b). It is expressly agreed and understood that the failure by the required
Lenders to elect to accelerate amounts outstanding hereunder and/or to terminate
the obligation of the Lenders to make Loans hereunder shall not constitute an
amendment or waiver of any term or provision of this Agreement.
13(c) Cumulative Rights; No Waiver. The rights, powers and
remedies of the Lenders hereunder and under the other Loan Documents are
cumulative and in addition to all rights, power and remedies provided under any
and all agreements between the Company and the Lenders relating hereto, at law,
in equity or otherwise. Any delay or failure by the Lenders to exercise any
right, power or remedy shall not constitute a waiver thereof by the Lenders, and
no single or partial exercise by the Lenders of any right, power or remedy shall
preclude other or further exercise thereof or any exercise of any other rights,
powers or remedies.
13(d) Entire Agreement. This Agreement and the other Loan
Documents embody the entire agreement and understanding between the parties
hereto and supersede all prior agreements and understandings relating to the
subject matter hereof and thereof.
13(e) Survival. All representations, warranties, covenants and
agreements contained herein and in the other Loan Documents on the part of the
Company and the Pledged Subsidiaries shall survive the termination of this
Agreement and shall be effective until the Obligations are paid and performed in
full or longer as expressly provided herein.
13(f) Notices. All notices given by any party to the others
under any of the Loan Documents shall be in writing unless otherwise provided
for herein, delivered by facsimile transmission, by personal delivery or by
overnight courier, addressed to the party as set forth on Schedule I attached
hereto, as such Schedule I may be amended from time to time. Any party may
change the address to which notices are to be sent by notice of such change to
each other party given as provided herein.
13(g) Governing Law. This Agreement and the other Loan
Documents shall be governed by and construed in accordance with the laws of the
State of California without giving effect to its choice of law rules.
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13(h) Counterparts. This Agreement and the other Loan
Documents may be executed in any number of counterparts, all of which together
shall constitute one agreement.
13(i) Sharing of Payments. If any Lender shall receive and
retain any payment, whether by setoff, application of deposit balance or
security, or otherwise, in respect of the Obligations in excess of such Lender's
Percentage Share thereof, then such Lender shall purchase from the other Lenders
for cash and at face value and without recourse, such participation in the
Obligations held by them as shall be necessary to cause such excess payment to
be shared ratably as aforesaid with each of them; provided, that if such excess
payment or part thereof is thereafter recovered from such purchasing Lender, the
related purchases from the other Lenders shall be rescinded ratably and the
purchase price restored as to the portion of such excess payment so recovered,
but without interest. Each Lender is hereby authorized by the Company to
exercise any and all rights of setoff, counterclaim or bankers' lien against the
full amount of the Obligations, whether or not held by such Lender. Each Lender
hereby agrees to exercise any such rights first against the Obligations and only
then to any other Indebtedness of the Company to such Lender.
13(j) Consent to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF CALIFORNIA OR OF THE UNITED STATES FOR THE CENTRAL
DISTRICT OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE COMPANY, THE AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE
COMPANY, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. THE COMPANY, THE AGENT AND THE LENDERS EACH WAIVE PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY CALIFORNIA LAW.
13(k) Waiver of Jury Trial. THE COMPANY, THE LENDERS AND THE
AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY,
THE LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION
SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING,
THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY
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IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
13(l) Indemnity. Whether or not the transactions contemplated
hereby are consummated, the Company shall indemnify and hold the Agent and each
Lender and each of their respective officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements (including
reasonable attorney's fees and expenses, including the documented cost of
internal counsel) of any kind or nature whatsoever which may at any time
(including at any time following repayment of the Loans and the termination,
resignation or replacement of the Agent or replacement of any Lender) be imposed
on, incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any document contemplated by or referred to
herein, or the transactions contemplated hereby, or any action taken or omitted
by any such Person under or in connection with any of the foregoing, including
with respect to any investigation, litigation or proceeding (including any
insolvency proceeding or appellate proceeding) related to or arising out of this
Agreement or the Loans or the use of the proceeds thereof, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, however, that the Company shall have no
obligation hereunder to any Indemnified Person with respect to Indemnified
Liabilities resulting from the gross negligence or willful misconduct of such
Indemnified Person. The agreements in this Paragraph 13(l) shall survive payment
of all other Obligations.
13(m) Marshalling; Payments Set Aside. Neither the Agent nor
the Lenders shall be under any obligation to xxxxxxxx any assets in favor of the
Company or any other Person or against or in payment of any or all of the
Obligations. To the extent that the Company makes a payment or payments to the
Agent or the Lenders (through the Agent), or the Agent on behalf of the Lenders
enforces their Liens or exercises their rights of set-off, and such payment or
payments or the proceeds of such enforcement or set-off or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the Agent in
its discretion) to be repaid to a trustee, receiver or any other party in
connection with any insolvency proceeding, or otherwise, then (1) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or set-off had not occurred, and
(2) each Lender severally agrees to pay to the Agent upon demand its ratable
share of the total amount so recovered from or repaid by the Agent.
13(n) Set-off. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists, each Lender is
authorized at any time and from
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time to time, without prior notice to the Company, any such notice being waived
by the Company to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held by, and other indebtedness at any time owing to, such Lender to or
for the credit or the account of the Company against any and all Obligations
owing to such Lender, now or hereafter existing, irrespective of whether or not
the Agent or such Lender shall have made demand under this Agreement or any Loan
Document and although such Obligations may be contingent or unmatured. Each
Lender agrees promptly to notify the Company and the Agent after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application.
13(o) Severability. The illegality or unenforceability of any
provision of this Agreement or any other Loan Document or any instrument or
agreement required hereunder or thereunder shall not in any way affect or impair
the legality or enforceability of the remaining provisions hereof or thereof.
13(p) No Third Parties Benefited. This Agreement and the other
Loan Documents are made and entered into for the sole protection and legal
benefit of the Company, the Lenders and the Agent, and their permitted
successors and assigns, and no other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Agreement or any of the other Loan Documents. Neither the
Agent nor any Lender shall have any obligation to any Person not a party to this
Agreement or other Loan Documents.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
FIDELITY NATIONAL FINANCIAL, INC.
a Delaware corporation
By: /s/ A. D. Xxxxxxx
Name: Xxxxx x. Xxxxxxx
Title: EVP & CFO
SANWA BANK CALIFORNIA, as Agent
and as a Lender
By: /s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx, Vice President
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COMERICA BANK - CALIFORNIA, as a Lender
By: /s/ Xxxxx XxXxxxxxxx
Name: Xxxxx XxXxxxxxxx
Title: Assistant Vice President
By: _________________________________
Name: _________________________________
Title: _________________________________
FIRST BANK & TRUST, as a Lender
By: /s/ X. X. Xxxxxxxxxx
Name: X.X. Xxxxxxxxxx
Title: Senior Vice President
SUN TRUST BANK, CENTRAL FLORIDA, N.A.,
as a Lender
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Vice President
THE SUMITOMO BANK, LIMITED, LOS ANGELES
BRANCH, as a Lender
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
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Title: General Manager
XXXXX FARGO BANK, N.A., as a Lender
By: /s/ Xxxxxxx X. XxXxxxxx
Name: Xxxxxxx X. XxXxxxxx
Title: Vice President
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President
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TABLE OF EXHIBITS AND SCHEDULES
Exhibit A Schedule of Litigation
Exhibit B Schedule of Subsidiaries
Schedule I Schedule of Addresses for Notice Purposes
Annex 1 Glossary, with Exhibits
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ANNEX 1: GLOSSARY
THIS GLOSSARY is attached to and incorporated by reference in that
certain Credit Agreement dated as of August 1, 1998 by and among FIDELITY
NATIONAL FINANCIAL, INC. (the "Company"), the Lenders from time to time party
thereto (the "Lenders") and SANWA BANK CALIFORNIA, as Agent for the Lenders. For
purposes of the Credit Agreement and the other Loan Documents, the following
capitalized terms shall have the following meanings:
"Adjusted Cash Flow" shall mean for any fiscal period: (a)
consolidated Cash Flow of the Company for such fiscal period, less (b)
amortization of the original issue discount on the XXXXx during such fiscal
period, and plus (c) provision for claim losses and provision for credit losses,
determined in accordance with GAAP for such period.
"Adjusted Scheduled Principal Payments" shall mean for any fiscal
period: (a) all regularly scheduled payments of principal required to be made on
account of Indebtedness of the Company and its Subsidiaries during such fiscal
period, less (b) principal payments required to be made on GFI Warehouse Debt
(whether as a result of the maturity thereof or otherwise), and less (c)
principal payments on the GFI Class A Notes.
"Adjustment Date" shall mean the date as of which the addition of
a new Lender or assignment among existing Lenders is to be effective as provided
more particularly in Paragraph 12 of the Agreement.
"Affiliate" shall mean, as to any Person, any other Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with, such Person. "Control" as used herein means with respect to
any business entity the power to direct the management and policies of such
business entity.
"Agent" shall have the meaning given such term in the
introductory paragraph of the Agreement and shall include any successor to Sanwa
as the initial "Agent" under the Agreement.
"Agent's Fee Letter" shall mean a fee letter in form and
substance satisfactory to the Agent setting forth the fees to be paid to the
Agent with respect to the credit facility evidenced by the Agreement.
"Aggregate Credit Limit" shall mean $100,000,000.00, as such
amount may be increased or decreased by written agreement of the Agent, the
Company and one hundred percent (100%) of the Lenders.
"Applicable Eurodollar Rate" shall mean, with respect to any
Eurodollar Loan for the Interest Period applicable to such Eurodollar Loan, the
rate per annum
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(rounded upward, if necessary, to the next higher 1/16 of one percent)
calculated as of the first day of such Interest Period in accordance with the
following formula:
Applicable Eurodollar Rate = ER + 1.15
----
1-ERP
where
ER = Eurodollar Rate
ERP = Eurodollar Reserve Percentage
"Applicable Insurance Regulatory Authority" shall mean, when used
with respect to any Significant Insurance Subsidiary, the insurance department
or similar administrative agency or authority located in the jurisdiction in
which such Significant Insurance Subsidiary is domiciled.
"Applicant Financial Institution" shall have the meaning given
such term in Paragraph 12(a) of the Agreement.
"Assigning Lender" shall have the meaning given such term in
Paragraph 12(a) of the Agreement.
"Assignment and Acceptance Agreement" shall mean an agreement in
the form of that attached hereto as Exhibit A.
"Authorized Officer" shall mean any of the chief financial
officer, executive vice president - finance, president, chief executive officer
or chief operating officer of the Company.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which banks in Los Angeles, California are authorized or obligated
to close their regular banking business.
"Capital Expenditures" shall mean, for any period, the aggregate
of all expenditures by the Company and its Subsidiaries for the acquisition or
leasing of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements during such period) which
should be capitalized under GAAP on a consolidated balance sheet of the Company
and its Subsidiaries. For the purpose of this definition, the purchase price of
equipment which is purchased simultaneously with the trade-in of existing
equipment owned by the Company or any of its Subsidiaries or with insurance
proceeds shall be included in Capital Expenditures only to the extent of the
gross amount of such purchase price less the credit granted by the seller of
such equipment for such equipment being traded in at such time, or the amount of
such proceeds, as the case may be.
"Cash Flow" shall mean for any period the sum of (a) net income
(or net loss) plus (b) all amounts treated as expenses for interest,
amortization and depreciation.
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"Change of Control" shall mean any of the following:
(a) The acquisition by any other entity, individual or group
(within the meaning of Sections 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") of beneficial ownership (as defined
in Rule 13d-3 promulgated under the Exchange Act) of more than twenty percent
(20%) of the common stock of the Company and/or other securities which have more
than twenty percent (20%) of the combined voting power of the securities of the
Company entitled to vote in the election of directors; or
(b) The sale of all or substantially all of the assets of the
Company to any other entity, individual or group except in a transaction whereby
the holders of the common stock and/or other securities entitled to vote in the
election of directors immediately prior to such transaction own, directly or
indirectly, at least eight percent (80%) of all such securities immediately
after giving effect to such transaction; or
(c) If the Company shall cease to own directly one hundred
percent (100%) of the outstanding capital stock of each of the Pledged
Subsidiaries.
"Closing Certificate" shall mean a certificate in the form of
that attached hereto as Exhibit B.
"Commitment Schedule" shall mean a schedule setting forth the
current Aggregate Credit Limit and, for each Lender, such Lender's Maximum
Commitment and Percentage Share, as such schedule may be modified from time to
time consistent with the Loan Documents.
"Commonly Controlled Entity" of a Person shall mean a Person,
whether or not incorporated, which is under common control with such Person
within the meaning of Section 414(c) of the Internal Revenue Code.
"Contact Office" shall mean the office of the Agent located at
000 Xxxxx Xxxxxxxx Xxxxxx, X0-00, Xxx Xxxxxxx, Xxxxxxxxxx 00000 or such other
office as the Agent may notify the Company and the Lenders from time to time in
writing.
"Contractual Obligation" as to any Person shall mean any
provision of any security issued by such Person or of any agreement, instrument
or undertaking to which such Person is a party or by which it or any of its
property is bound.
"Debt" shall mean at any date: (a) consolidated Total Liabilities
of the Company, less (b) Total Liabilities of GFI, less (c) reserves for claim
losses established in conformity with GAAP, and less (d) Subordinated Debt of
the Company and its Subsidiaries.
"Effective Fed Funds Rate" shall mean for any day, the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve
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System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York or, if such rate is not so published for any day that
is a Business Day, the average of quotations for such day on such transactions
received by the Agent from three Federal Funds brokers of recognized standing
selected by the Agent.
"Effective Date" shall mean the date on which all conditions
precedent to the funding of the first Loan set forth in Paragraph 6(a) of the
Agreement have been met to the satisfaction of the Agent and the Lenders.
"Effective Tangible Net Worth" shall mean on any date: (a) the
consolidated Tangible Net Worth of the Company, plus (b) Subordinated Debt of
the Company and its consolidated Subsidiaries, less (c) the Tangible Net Worth
of GFI, determined in accordance with GAAP.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may from time to time be supplemented or amended.
"Eurodollar Business Day" shall mean a Business Day upon which
commercial banks in London, England are open for domestic and international
business.
"Eurodollar Rate" shall mean, with respect to any Eurodollar Loan
for the Interest Period applicable to such Eurodollar Loan, the rate for the
applicable Interest Period shown on Page 1701 of the Xxxxxx-Xxxxxx screen for
the corresponding deposits of U.S. dollars three Business Days prior to the
first day of such Interest Period or such rate as is otherwise determined by the
Agent with reference to the British Banker's Association, or, if such rates are
not available, the arithmetic average as determined by the Agent of the rates at
which deposits in immediately available U.S. dollars in an amount equal to the
amount of such Eurodollar Loan having a maturity approximately equal to such
Interest Period are offered to three reference banks to be selected by the Bank
in the London interbank market, at approximately 11:00 a.m. (London time) three
Eurodollar Business Days prior to the first day of such Interest Period.
"Eurodollar Rate Loans" shall mean Loans outstanding under the
Agreement at such time as they are made and/or being maintained at a rate of
interest based upon the Eurodollar Rate.
"Eurodollar Reserve Percentage" shall mean with respect to an
Interest Period for a Eurodollar Loan, the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves and taking into
account any transitional adjustments) which is imposed under Regulation D on
eurocurrency liabilities.
"Event of Default" shall have the meaning given such term in
Paragraph 10 of the Agreement.
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"Existing Bridge Facility" shall mean the credit facility
extended by Sanwa to the Company and evidenced by that certain Bridge Loan Note
dated as of March 24, 1998 executed by the Company in favor of Sanwa.
"Financial Covenant Compliance Certificate" shall mean a
certificate in the form of that attached hereto as Exhibit C, demonstrating
compliance by the appropriate Persons with the requirements of Paragraphs
9(g)(3), 9(g)(4), 9(g)(5), 9(g)(7), 9(g)(8), 9(j), 9(k), 9(l), 9(m), 9(n), 9(o)
and 9(p) of the Agreement.
"Floating Rate" shall mean on any day the higher of: (a) the rate
of interest publicly announced by Sanwa from time to time as its "reference
rate" as in effect at Sanwa's principal office in Los Angeles, California on
such day, and (b) the Effective Fed Funds Rate on such day plus one half of one
percent (0.50%).
"Floating Rate Loans" shall mean Loans outstanding under the
Agreement during such time as they are made and/or being maintained at a rate of
interest based upon the Floating Rate.
"FNNEW" shall mean Fidelity National Title Insurance Company of
New York, a New York corporation.
"FNTIC" shall mean Fidelity National Title Insurance Company, a
California corporation.
"FNTC" shall mean Fidelity National Title Company, a California
corporation.
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time consistently applied.
"GFI" shall mean Granite Financial, Inc., a Delaware corporation.
"GFI Class A Notes" shall mean 6.33% Class A Lease-Backed Term
Notes, Series 1996-1 Due November 20, 2001 issued pursuant to an Indenture dated
as of april 1, 1996 among GF Funding Corp. I, Norwest Bank Minnesota, National
Association, and Granite Financial, LLC.
"GFI Warehouse Debt' shall mean Indebtedness of GFI consisting of
short term working capital lines of credit.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Hazardous Materials" shall mean any flammable materials
(excluding wood products normally used in construction), explosives, radioactive
materials, hazardous wastes, toxic substances or related materials, including,
without limitation, any
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48
substances defined as or included in the definitions of "hazardous substances,"
"Hazardous wastes," "hazardous materials," or toxic substances" under any
applicable federal, state, or local laws or regulations.
"Hazardous Materials Claims" shall mean any enforcement, cleanup,
removal or other governmental or regulatory action or order with respect to the
Property, pursuant to any Hazardous Materials Laws, and/or any claim asserted in
writing by any third party relating to damage, contribution, cost recovery
compensation, loss or injury resulting from any Hazardous Materials.
"Hazardous Materials Laws" shall mean any applicable federal,
state or local laws, ordinances or regulations relating to Hazardous Materials.
"Indebtedness" of any Person shall mean all items of indebtedness
which, in accordance with GAAP and practices, would be included in determining
liabilities as shown on the liability side of a statement of condition of such
Person as of the date as of which indebtedness is to be determined, including,
without limitation, all obligations for money borrowed and capitalized lease
obligations, and shall also include all indebtedness and liabilities of others
assumed or guaranteed by such Person or in respect of which such Person is
secondarily or contingently liable (other than by endorsement of instruments in
the course of collection) whether by reason of any agreement to acquire such
indebtedness or to supply or advance sums or otherwise.
"Initial Collateral Documents" shall have the meaning given such
term in Paragraph 5(a) of the Agreement.
"Insurance Subsidiary" shall mean any Subsidiary of the Company
which is a licensed insurance company or a licensed underwritten title company.
"Interest Period" shall mean with respect to any Loan which is
being maintained as a Eurodollar Rate Loan, the period commencing on the date
such Loan is advanced and ending one, two, three, four or six months thereafter,
as designated in the related Loan Request; provided, however, that: (a) any
Interest Period which would otherwise end on a day which is not a Eurodollar
Business Day shall be extended to the next succeeding Eurodollar Business Day
unless by such extension it would fall in another calendar month, in which case
such Interest Period shall end on the immediately preceding Eurodollar Business
Day, (b) any Interest Period which begins on a day for which there is no
numerically corresponding day in the calendar month in which such Interest
Period is to end shall, subject to the provisions of clause (a) of the
Agreement, end on the last day of such calendar month, and (c) no Interest
Period shall end after the Maturity Date or.
"Interim Date" shall mean June 30, 1998.
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49
"Licenses" shall mean any licenses or certificates of authority
from any Applicable Insurance Regulatory Authority or permits or authorizations
to transact title insurance business or to act as an insurance agent or broker.
"Lien" shall mean any security interest, mortgage, pledge, lien,
claim on property, charge or encumbrance (including any conditional sale or
other title retention agreement), any lease in the nature thereof, and the
filing of or agreement to give any financial statement under the Uniform
Commercial Code of any jurisdiction.
"Loan Documents" shall mean the Agreement, the Stock Pledge
Agreement, the Negative Pledge Agreements and each other document, instrument or
agreement executed by the Company in connection herewith or therewith, as any of
the same may be amended, extended or replaced from time to time.
"Loan Request" shall mean a request for a Loan in substantially
the form of Exhibit D attached hereto.
"Loans" shall mean, collectively and severally, the Revolving
Loans and the Term Loan.
"XXXXx" shall mean those certain Liquid Yield Option Notes issued
by the Company pursuant to the Subordinated XXXXx Debt Indenture.
"Majority Lenders" shall mean the Lenders holding not less than
sixty-six and two thirds percent (66.667%) of the Percentage Shares.
"Maturity Date" shall mean the earlier of: (a) July 31, 2001, as
such date may be extended from time to time in writing by one hundred percent
(100%) of the Lenders, in their sole discretion, and (b) the date the Lenders
terminate their obligation to make further Loans under the Agreement pursuant to
Paragraph 10 of the Agreement.
"Maximum Commitment" shall mean , with respect to any Lender on
any date, the dollar amount specified as such Lender's "Maximum Commitment" on
the current Commitment Schedule, as such amount may be increased pursuant to an
assignment of additional Maximum Commitment to such Lender pursuant to Paragraph
13(b) of the Agreement or otherwise increased or decreased by written agreement
of the Company, the Agent and one hundred percent (100%) of the Lenders.
"Multiemployer Plan" as to any Person shall mean a Plan of such
Person which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"NAIC" shall mean the National Association of Insurance
Commissioners and any successor thereto.
"Negative Pledge Agreement" shall mean an agreement in the form
of that attached hereto as Exhibit E.
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"Net Profit After Taxes" shall mean for any Person for any fiscal
period, the pre-tax net income (or net loss) of such Person for such period,
determined in accordance with GAAP, less all accrued taxes on or measured by
income to the extent included in the determination of such net income (or loss);
provided, however, that net income (or loss) shall be computed without giving
effect to extraordinary losses or extraordinary gains, as determined under GAAP.
"Obligations" shall mean any and all debts, obligations and
liabilities of the Company to the Lenders (whether now existing or hereafter
arising, voluntary or involuntary, whether or not jointly owed with others,
direct or indirect, absolute or contingent, liquidated or unliquidated, and
whether or not from time to time decreased or extinguished and later increased,
created or incurred), arising out of or related to the Loan Documents.
"Other Permitted Secured and Unsecured Debt" shall mean
Indebtedness described on Exhibit F attached hereto.
"Other Permitted Secured Debt" shall mean Indebtedness described
as such on Exhibit F attached hereto.
"PBGC" shall mean the Pension Benefit Negative Pledge Agreement
Corporation established pursuant to Subtitle A of Title IV of ERISA and any
successor thereto.
"Percentage Share" shall mean, for any Lender at any date that
percentage which the Maximum Commitment of such Lender at such date bears to the
Aggregate Credit Limit on such date, as set forth in the most recent Commitment
Schedule delivered by the Agent to the Company and the Lenders.
"Permitted Acquisition" shall mean an acquisition by the Company
or one of its Subsidiaries as to which each of the following statements is
accurate and complete (and the Company by consummating such acquisition being
automatically deemed to so represent and warrant to the Agent and the Lenders):
(a) The acquisition is of an equity interest in or assets of a
company which meets each of the following criteria:
(1) The company's principal line of business is providing
financial services to the public or, if the company's principal line of
business is not providing financial services to the public, the total
consideration to be paid by the Company or such Subsidiary for the
subject equity interests or assets did not exceed the following
limitations:
(i) If the consideration is to be paid through the
issuance of stock or warrants or other securities convertible
into stock, the book value of such stock (or the stock into which
such warrants or
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51
other securities are convertible), when taken together with the
aggregate book value of all stock (or the stock into which such
warrants or other securities are convertible) issued by the
Company and its Subsidiaries in connection with the acquisition
of equity interests in or assets of other non-financial services
companies from and after December 31, 1997, will not exceed
$25,000,000.00, or
(ii) If the consideration is to be paid in cash,
the dollar amount thereof when taken together with the aggregate
dollar amount of cash consideration paid by the Company and its
Subsidiaries in connection with the acquisition of equity
interests in or assets of other non-financial services companies
from and after December 31, 1997, will not exceed $10,000,000.00;
(2) The company's ratio of Cash Flow to scheduled
principal and interest payments required to be made on account of
Indebtedness of such company as of the end of the most recent fiscal
quarter of the company for such quarter and the immediately preceding
three fiscal quarters was not less than 1.20:1.00; and
(3) The company's ratio of Total Liabilities to Tangible
Net Worth as of the end of the most recent fiscal quarter of the company
was not more than 3.00:1.00.
(b) If the consideration paid by the Company included the
issuance of stock of the Company (or warrants or other securities convertible
into stock of the Company), the book value of such stock (or the stock into
which such warrants or other securities are convertible), when taken in the
aggregate with the book value of all stock (and warrants or other convertible
securities) issued by the Company in connection with acquisitions of all or
substantially all of the stock or assets of companies after December 31, 1997
(other than GFI) did not exceed fifty percent (50%) of the Company's Effective
Tangible Net Worth at the date of consummation of the subject acquisition.
(c) The cash consideration paid by the Company in connection with
such acquisition, when taken in the aggregate with the cash consideration paid
by the Company in connection with acquisitions of all or substantially all of
the stock or assets of companies after December 31, 1997 (other than GFI) did
not exceed twenty five percent (25%) of the Company's Effective Tangible Net
Worth at the date of consummation of the subject acquisition.
(d) The book value of stock (or warrants or other convertible
securities) to be issued or cash to be paid in connection with the subject
acquisition, when taken in the aggregate book value of all stock (or warrants or
other convertible securities) issued by the Company and its Subsidiaries and
cash consideration paid by the Company and its Subsidiaries in consideration of
acquisitions of all or substantially all of the stock or assets of companies
after December 31, 1997 (other than GFI) did not exceed fifty
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percent (50%) of the Company's Effective Tangible Net Worth at the date of
consummation of the subject acquisition.
(e) Following the consummation of such acquisition and after
giving effect thereto there does not exist an Event of Default or Potential
Default.
"Person" shall mean any corporation, natural person, firm, joint
venture, partnership, limited liability company, trust, unincorporated
organization, government or any department or agency of any government.
"Plan" shall mean as to any Person, any pension plan that is
covered by Title IV of ERISA and in respect of which such Person or a Commonly
Controlled Entity of such Person is an "employer" as defined in Section 3(5) of
ERISA.
"Pledged Stock" shall have the meaning given such term in
Paragraph 5(a) of the Agreement.
"Pledged Subsidiaries" shall mean each of FNNEW, FNTIC and FNTC.
"Potential Default" shall mean an event which but for the lapse
of time or the giving of notice, or both, would constitute an Event of Default.
"Primary Quality Investments" shall mean any of the following:
(a) Operating deposit accounts maintained in the Company's name
alone with FDIC member institutions;
(b) Direct obligations of the United States of America or any
agency thereof;
(c) Certificates of deposit issued by FDIC member institutions
rated at least A- by Standard and Poor's Corporation (or bearing an equivalent
rating of another nationally recognized rating agency) with a maturity not to
exceed ninety (90) days and in an aggregate dollar amount not to exceed
$5,000,000.00 per issuing institution;
(d) Commercial paper issued by obligors rated at least A- by
Standard and Poor's Corporation (or bearing an equivalent rating of another
nationally recognized rating agency) with a maturity not to exceed ninety (90)
days and in an aggregate dollar amount not to exceed $5,000,000.00 per
issuer/obligor;
(e) Shares of money market funds in which the underlying
investments are rated at investment grade by Standard and Poor's Corporation (or
bearing an equivalent rating of another nationally recognized rating agency);
and
(f) Bonds and preferred stock rated at investment grade by
Standard and Poor's Corporation (or bearing an equivalent rating of another
nationally recognized
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rating agency) in an aggregate dollar amount not to exceed in any single
issuer/obligor ten percent (10%) of the Company's Effective Tangible Net Worth.
"Property" shall mean, collectively and severally, any and all
real property, including all improvements and fixtures thereon, owned or
occupied by the Company or any of its Subsidiaries.
"Reference Rate" shall mean the fluctuating per annum rate
announced from time to time by the Agent in Los Angeles, California, as its
"Reference Rate". The Reference Rate is a rate set by the Agent based upon
various factors including the Agent's costs and desired return, general economic
conditions, and other factors, and is used as a reference point for pricing some
loans, which may be priced at, of the Agreement or below the Reference Rate.
"Regulation D" shall mean Regulation D of the Board of Governors
of the Federal Reserve System (12 C.F.R. Section 221), as the same may from time
to time be amended, supplemented or superseded.
"Reportable Event" shall mean a reportable event as defined in
Title IV of ERISA, except actions of general applicability by the Secretary of
Labor under Section 110 of ERISA.
"Requirements of Law" shall mean as to any Person the Certificate
of Incorporation and ByLaws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation, or a final and binding
determination of an arbitrator or a determination of a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Revolving Loan" shall have the meaning given such term in
Paragraph 1(a) of the Agreement.
"SAP" shall mean with respect to any Significant Insurance
Subsidiary, the accounting procedures and practices prescribed or permitted by
the Applicable Insurance Regulatory Authority for such Significant Insurance
Subsidiary, applied on a consistent basis.
"Secondary Quality Investments" shall mean debt and equity
investments which are traded in recognized public markets but which do not
qualify as Primary Quality Investments.
"Significant Insurance Subsidiary" shall mean any of those
Subsidiaries of the Company listed on Exhibit G attached hereto and any
Subsidiary formed or acquired following the Effective Date which the Agent has
designated as such.
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"Single Employer Plan" shall mean as to any Person any Plan of
such Person which is not a Multiemployer Plan.
"Statement Date" shall mean December 31, 1997.
"Statutory Statement" shall mean with respect to any Significant
Insurance Subsidiary, a statement of the condition and affairs of such
Significant Insurance Subsidiary, prepared in accordance with SAP and filed with
the Applicable Insurance Regulatory Authority for such Significant Insurance
Subsidiary.
"Statutory Surplus" shall mean with respect to any Significant
Insurance Subsidiary at any date, the amount, determined in accordance with SAP,
of such Significant Insurance Subsidiary's surplus as regards policy holders as
of the last day of the fiscal quarter of such Significant Insurance Subsidiary
ending on or most recently ended prior to such date.
"Stock Pledge Agreement" shall mean an agreement in the form of
that attached hereto as Exhibit H.
"Subordinated Debt" shall mean Indebtedness of the Company
subordinated to the Obligations pursuant to written subordination agreements in
form and substance satisfactory to the Agent and the Majority Lenders, it being
agreed and understood that Indebtedness of the Company evidenced by the XXXXx
shall constitute "Subordinated Debt" for all purposes of the Loan Documents.
"Subordinated XXXXx Debt Indenture" shall mean that certain
Indenture dated as of February 1, 1995 by and between the Company and Chemical
Bank, as Trustee, as the same may be amended from time to time.
"Subsidiary" shall mean with respect to any Person: (a) any
corporation more than fifty percent (50%) of the stock of which having by the
terms thereof ordinary voting power to elect the board of directors, managers or
trustees of such corporation shall, at the time as of which any determination is
being made, be owned by such Person, either directly or through Subsidiaries of
such Person (irrespective of whether or not at the time stock of any other class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency), and (b) any Person other than a
corporation, including, without limitation, any partnership, joint venture or
other business combination, whose management and policies are controlled by or
under common control with such Person or any of the Subsidiaries of such Person.
"Tangible Net Worth" shall mean for any Person at any time of
determination, total assets (exclusive of equity investments in Subsidiaries and
other Persons, notes receivable from Affiliates, goodwill, patents, trademarks,
trade names, organization expense, treasury stock, unamortized debt discount and
premium, deferred charges and other like intangibles) less Total Liabilities
(including accrued and deferred income taxes but excluding Subordinated Debt),
at such time.
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"Total Liabilities" shall mean for any Person at any time of
determination, all liabilities of such Person which in accordance with GAAP
would be shown on the liability side of a balance sheet of such Person but
excluding Subordinated Debt, as determined in accordance with GAAP.
"Transferee Lender" shall have the meaning given such term in
Paragraph 12(b) of the Agreement.
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TABLE OF EXHIBITS TO GLOSSARY
Exhibit A Form of Assignment and Acceptance Agreement
Exhibit B Form of Closing Certificate
Exhibit C Form of Financial Covenant Compliance Certificate
Exhibit D Form of Loan Request
Exhibit E Form of Negative Pledge Agreement
Exhibit F Schedule of Permitted Other Secured and Unsecured Debt
Exhibit G Schedule of Significant Insurance Subsidiaries
Exhibit H Form of Stock Pledge Agreement
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STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (the "Stock Pledge Agreement") is made and
dated as of the 1st day of August, 1998 by and between FIDELITY NATIONAL
FINANCIAL, INC. a Delaware corporation (the "Company"), and SANWA BANK
CALIFORNIA, acting in its capacity as agent for the Lenders from time to time
party to (and as the term "Lenders" and capitalized terms not otherwise defined
herein are defined in) that certain Credit Agreement dated as of August 1, 1998
(as the same may be amended, extended and replaced from time to time, the
"Credit Agreement") (Sanwa acting in such capacity being referred to herein as
the "Agent").
RECITALS
A. Pursuant to the Credit Agreement, the Lenders have agreed to extend
credit to the Company and the Agent has agreed to act as agent for the Lenders
in connection with such credit extension.
B. As a condition precedent to the agreement of the Lenders to enter
into the Credit Agreement, the Company is required, among other things, to
execute and deliver to the Agent for the benefit of the Lenders this Stock
Pledge Agreement.
NOW, THEREFORE, in consideration of the above Recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. Appointment. By executing the Credit Agreement or otherwise becoming
a Lender thereunder, each Lender shall automatically be deemed to have appointed
the Agent to act as secured party, agent, custodian and bailee for the exclusive
benefit of Lenders with respect to the Collateral (as defined in Paragraph 3
below). The Agent hereby accepts such appointment and agrees to maintain and
hold all Collateral as secured party, agent, custodian and bailee for the
exclusive benefit of the Lenders. The Agent agrees to act in accordance with
this Stock Pledge Agreement and acknowledges and agrees that the Agent is not,
and shall not at any time in the future be, subject with respect to the
Collateral, in any manner or to any extent, to the direction or control of the
Company except as expressly permitted hereunder and under the other Loan
Documents.
2. Grant of Security Interest. The Company hereby pledges, mortgages,
assigns and grants to the Agent for the equal, ratable benefit of the Lenders
and to each of the Lenders in
58
accordance with their respective Percentage Shares, a first priority perfected
security interest in the property described in Paragraph 3 below (collectively
and severally, the "Collateral") to secure payment and performance of the
Obligations.
3. Collateral. The Collateral shall consist of all now existing and
hereafter arising right, title and interest of the Company in each of the
following:
(a) All now existing and hereafter outstanding capital stock of
the Pledged Subsidiaries, and all new substituted and additional documents,
instruments, and general intangibles issued with respect thereto (collectively
and severally, the "Pledged Shares") and all now existing and hereafter arising
rights of the holder of the Pledged Shares, including, without limitation, all
voting and rights to and interest in all cash and noncash dividends and all
other property now or hereafter distributable on account of or receivable with
respect to any of the foregoing; and
(b) All proceeds of the foregoing Collateral. For purposes of
this Stock Pledge Agreement, the term "proceeds" shall mean whatever is
receivable or received when Collateral or proceeds are sold, collected,
exchanged or otherwise disposed of, whether such disposition is voluntary or
involuntary, and includes, without limitation, all rights to payment, including
return premiums, with respect to any insurance relating thereto.
4. Representations and Warranties. In addition to all representations
and warranties of the Company set forth in the Loan Documents, which are
incorporated herein by this reference, the Company hereby represents and
warrants that:
(a) The Company is the sole owner of and has good and marketable
title to the Collateral (or, in the case of after-acquired Collateral, at the
time the Company acquires rights in the Collateral, will be the sole owner
thereof) and is the record and beneficial owner of the Pledged Shares;
(b) Except for the security interest in favor of the Agent for
the benefit of the Lenders granted pursuant hereto, no person has (or, in the
case of after-acquired Collateral, at the time the Company acquires rights
therein, will have) any right, title, claim or interest (by way of security
interest or other lien or charge) in, against or to the Collateral;
(c) All information heretofore, herein or hereafter supplied to
the Agent or any Lender by or on behalf of the Company with respect to the
Collateral is accurate and complete;
(d) The Company has delivered to the Agent all instruments,
chattel paper and other items of Collateral in which a security interest is or
may be perfected by possession, and any certificate Pledged Shares together with
such additional writings, including, without limitation, assignments and stock
powers, with respect thereto as the Agent shall request; and
(e) The Pledged Shares in the aggregate constitute all of the
issued and outstanding shares of the Subsidiaries, have been validly issued and
are fully paid and
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nonassessable, and there are no outstanding options, warrants or other
agreements with respect thereto.
5. Covenants and Agreements of the Company. In addition to all covenants
and agreements of the Company set forth in the Loan Documents, which are
incorporated herein by this reference, the Company hereby agrees:
(a) To do all acts that may be necessary to maintain, preserve
and protect the Collateral;
(b) Not to use or permit any Collateral to be used unlawfully or
in violation of any provision of this Stock Pledge Agreement, any other
agreement with the Agent and/or the Lenders related hereto, or any Requirement
of Law or Contractual Obligation affecting the Collateral;
(c) To pay promptly when due all taxes, assessments, charges,
encumbrances and Liens now or hereafter imposed upon or affecting any
Collateral;
(d) To appear in and defend any action or proceeding which may
affect its title to or the Agent's interest on behalf of the Lenders in the
Collateral;
(e) Not to surrender or lose possession of (other than to the
Agent), sell, encumber, lease, rent, or otherwise dispose of or transfer any
Collateral or right or interest therein and to keep the Collateral free of all
levies and security interests or other Liens or charges except the security
interest in favor of the Agent for the benefit of the Lenders granted hereunder;
(f) To account fully for and promptly deliver to the Agent, in
the form received, all documents, chattel paper, instruments and agreements
constituting Collateral hereunder and all proceeds of the Collateral received,
all endorsed to the Agent or in blank, as requested by the Agent, and
accompanied by such stock powers as appropriate and until so delivered all such
documents, instruments, agreements and proceeds shall be held by the Company in
trust for the Lenders, separate from all other property of the Company;
(g) To keep separate, accurate and complete records of the
Collateral and to provide the Agent and each of the Lenders with such records
and such other reports and information relating to the Collateral as the Agent
or any Lender may request from time to time;
(h) To keep the records concerning the Collateral at the
location referred to in Paragraph 8 below and not to remove such records from
such location without the prior written consent of the Agent; and
(i) To account fully for and promptly deliver to the Agent, in
the form received, any dividend or any other distribution on account of the
Pledged Shares whether in securities or property by way of stock-split,
spin-off, split-up or reclassification, combination of shares or the like, or in
case of any reorganization, consolidation or merger; provided, however,
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60
that until there shall have occurred an Event of Default, the Company shall be
entitled to retain any cash dividends paid on account of the Pledged Shares.
6. Authorized Action by Secured Party. The Company hereby agrees that
from time to time, without presentment, notice or demand, and without affecting
or impairing in any way the rights of the Agent with respect to the Collateral,
the obligations of the Company hereunder or the Obligations, the Agent may, but
shall not be obligated to and shall incur no liability to the Company, any
Lender or any third party for failure to, take any action which the Company is
obligated by this Stock Pledge Agreement to do and to exercise such rights and
powers as the Company might exercise with respect to the Collateral, and the
Company hereby irrevocably appoints the Agent as its attorney-in-fact to
exercise such rights and powers, including without limitation, to: (a) collect
by legal proceedings or otherwise and endorse, receive and receipt for all
dividends, interest, payments, proceeds and other sums and property now or
hereafter payable on or on account of the Collateral; (b) enter into any
extension, reorganization, deposit, merger, consolidation or other agreement
pertaining to, or deposit, surrender, accept, hold or apply other property in
exchange for the Collateral; (c) insure, process and preserve the Collateral;
(d) transfer the Collateral to its own or its nominee's name; (e) make any
compromise or settlement, and take any action it deems advisable, with respect
to the Collateral; and (f) notify any obligor on any Collateral to make payment
directly to the Agent. The Company hereby grants to the Agent for the benefit of
the Lenders an exclusive, irrevocable power of attorney, with full power and
authority in the place and stead of the Company to take all such action
permitted under this Paragraph 6.
7. Remedies. Upon the occurrence of an Event of Default the Agent may,
without notice to or demand on the Company and in addition to all rights and
remedies available to the Agent and the Lenders under the Loan Documents, at
law, in equity or otherwise, do any one or more of the following:
(a) Foreclose or otherwise enforce the Agent's security interest
in any manner permitted by law, or provided for in this Stock Pledge Agreement;
(b) Sell, lease or otherwise dispose of any Collateral at one or
more public or private sales at the Agent's place of business or any other place
or places, including, without limitation, any broker's board or securities
exchange, whether or not such Collateral is present at the place of sale, for
cash or credit or future delivery, on such terms and in such manner as the Agent
may determine;
(c) Recover from the Company all costs and expenses, including,
without limitation, reasonable attorneys' fees (including the allocated cost of
internal counsel), incurred or paid by the Agent or any Lender in exercising any
right, power or remedy provided by this Stock Pledge Agreement;
(d) Vote or consent, and in connection therewith the Company
hereby grants to the Agent a proxy to vote or to consent, with respect to
Pledged Shares; and
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(e) Restrict the prospective bidders or purchasers of Pledged
Shares to persons or entities who (1) will represent and agree that they are
purchasing for their own account, for investment, and not with a view to the
distribution or sale of any of the Pledged Shares; and (2) satisfy the offeree
and purchaser requirements for a valid private placement transaction under
Section 4(2) of the Securities Act of 1933, as amended (the "Act"), and under
Securities and Exchange Commission Release Nos. 33-6383; 34-18524; 35-22407;
39-700; IC-12264; AS-306, or under any similar statute, rule or regulation. The
Company agrees that disposition of the Pledged Shares pursuant to any private
sale made as provided above may be at prices and on other terms less favorable
than if the Pledged Shares were sold at public sale, and that the Agent has no
obligation to delay the sale of any Pledged Shares for public sale under the
Act. The Company agrees that a private sale or sales made under the foregoing
circumstances shall be deemed to have been made in a commercially reasonable
manner. In the event that the Agent elects to sell the Pledged Shares, or part
of them, and there is a public market for the Pledged Shares, in a public sale,
the Company shall use its best efforts to register and qualify the Pledged
Shares, or applicable part thereof, under the Act and all state Blue Sky or
securities laws required by the proposed terms of sale, and all expenses thereof
shall be payable by the Company, including, but not limited to, all costs of (i)
registration or qualification of, under the Act or any state Blue Sky or
securities laws or pursuant to any applicable rule or regulation issued pursuant
thereto, any Pledged Shares, and (ii) sale of such Pledged Shares, including,
but not limited to, brokers' or underwriters' commissions, fees or discounts,
accounting and legal fees (including the allocated cost of internal counsel) and
disbursements, costs of printing and other expenses of transfer and sale. If any
consent, approval or authorization of any state, municipal or other governmental
department, agency or authority shall be necessary to effectuate any sale or
other disposition of Pledged Shares, or any part thereof, the Company will
execute such applications and other instruments as may be required in connection
with securing any such consent, approval or authorization, and will otherwise
use its best efforts to secure the same.
The Company shall be given five (5) business days' prior notice of the time and
place of any public sale or of the time after which any private sale or other
intended disposition of Collateral other than Pledged Shares is to be made,
which notice the Company hereby agrees shall be deemed reasonable notice
thereof. Upon any sale or other disposition pursuant to this Stock Pledge
Agreement, the Agent shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral or portion thereof so sold or disposed of. Each
purchaser at any such sale or other disposition (including the Agent) shall hold
the Collateral free from any claim or right of whatever kind, including any
equity or right of redemption of the Company and the Company specifically waives
(to the extent permitted by law) all rights of redemption, stay or appraisal
which it has or may have under any rule of law or statute now existing or
hereafter adopted.
Notwithstanding the foregoing, none of the above remedies can be exercised
either directly as to FNTIC or indirectly as to FNTIC, by way of actions as to
direct or indirect holding companies of FINTIC, without first filing for and
obtaining written prior approval from the California Insurance Department
pursuant to California Insurance Code Section 1215.2.
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8. Residence; Collateral Location; Records Location. The Company
represents that its chief place of business is located at 0000 Xxxxx Xxxxxx,
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000 and that the Company's records concerning the
Collateral are located at its chief place of business.
EXECUTED as of the day and year first above written.
FIDELITY NATIONAL FINANCIAL, INC.,
a Delaware corporation
By: /s/ A. D. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: EVP & CFO
SANWA BANK CALIFORNIA, a California
banking corporation, as Agent
By: /s/ X. X. Xxxxxxxx
Name: X.X. Xxxxxxxx
Title: Vice President/Manager
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