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$50,000,000
CREDIT AGREEMENT
DATED AS OF OCTOBER 3, 1997
AMONG
INTERNATIONAL ALLIANCE SERVICES, INC.
BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION
AS AGENT
AND
LETTER OF CREDIT ISSUING BANK
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
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TABLE OF CONTENTS
Section Page
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ARTICLE I DEFINITIONS.........................................................................1
1.01 Certain Defined Terms...................................................................1
1.02 Other Interpretive Provisions..........................................................21
1.03 Accounting Principles...............................................................21
ARTICLE II THE CREDITS.......................................................................22
2.01 Amounts and Terms of Commitment........................................................22
2.02 Loan Accounts..........................................................................22
2.03 Procedure for Borrowing................................................................23
2.04 Conversion and Continuation Elections..................................................23
2.05 Voluntary Termination or Reduction of Commitments......................................25
2.06 Optional Prepayments...................................................................25
2.07 Mandatory Prepayments of Loans.........................................................25
(b) General 26
2.08 Repayment..............................................................................26
2.09 Interest...............................................................................26
2.10 Fees...................................................................................26
(a) Agency Fees....................................................................27
(b) Commitment Fees................................................................27
2.11 Computation of Fees and Interest.......................................................27
2.12 Payments by the Company................................................................27
2.13 Payments by the Banks to the Agent.....................................................28
2.14 Sharing of Payments, Etc...............................................................29
ARTICLE III THE LETTERS OF CREDIT............................................................29
3.01 The Letter of Credit Subfacility.......................................................29
3.02 Issuance, Amendment and Renewal of Letters of Credit...................................30
3.03 Risk Participations, Drawings and Reimbursements.......................................32
3.04 Repayment of Participations............................................................33
3.05 Role of the Issuing Bank...............................................................34
3.06 Obligations Absolute...................................................................34
3.07 Cash Collateral Pledge.................................................................35
3.08 Letter of Credit Fees..................................................................36
3.09 Uniform Customs and Practice...........................................................36
ARTICLE IV TAXES, YIELD PROTECTION AND ILLEGALITY............................................36
4.01 Taxes..................................................................................36
4.02 Illegality.............................................................................37
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4.03 Increased Costs and Reduction of Return................................................38
4.04 Funding Losses.........................................................................39
4.05 Inability to Determine Rates...........................................................39
4.06 Reserves on Offshore Rate Loans........................................................40
4.07 Certificates of Banks..................................................................40
4.08 Survival...............................................................................40
ARTICLE V CONDITIONS PRECEDENT...............................................................40
5.01 Conditions of Initial Credit Extensions................................................40
(a) Credit Agreement and Notes 0
(b) Resolutions; Incumbency 0
(c) Organization Documents; Good Standing 1
(d) Legal Opinions 1
(e) Payment of Fees 1
(f) Certificate 1
(g) Collateral Documents 2
(h) Bank Payoff Letter 2
(i) Solvency Certificate 2
(j) Other Documents 2
5.02 Conditions to All Credit Extensions....................................................42
(b) Continuation of Representations and Warranties 2
(c) No Existing Default 3
ARTICLE VI REPRESENTATIONS AND WARRANTIES....................................................43
6.01 Corporate Existence and Power..........................................................43
6.02 Corporate Authorization; No Contravention..............................................43
6.03 Governmental Authorization.............................................................44
6.04 Binding Effect.........................................................................44
6.05 Litigation.............................................................................44
6.06 No Default.............................................................................44
6.07 ERISA Compliance.......................................................................44
6.08 Use of Proceeds; Margin Regulations....................................................45
6.09 Title to Properties....................................................................45
6.10 Taxes..................................................................................45
6.11 Financial Condition....................................................................45
6.12 Environmental Matters..................................................................46
6.13 Collateral Documents...................................................................46
6.14 Regulated Entities.....................................................................47
6.15 No Burdensome Restrictions.............................................................47
6.16 Solvency...............................................................................47
6.17 Labor Relations........................................................................47
6.18 Copyrights, Patents, Trademarks, etc...................................................47
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6.19 Subsidiaries...........................................................................47
6.20 Broker's; Transaction Fees.............................................................48
6.21 Insurance..............................................................................48
6.22 Swap Obligations.......................................................................48
6.23 Full Disclosure........................................................................48
6.24 Insurance Licenses.....................................................................48
ARTICLE VII AFFIRMATIVE COVENANTS............................................................48
7.01 Financial Statements...................................................................49
7.02 Certificates; Other Information........................................................50
7.03 Notices................................................................................50
7.04 Preservation of Corporate Existence, Etc...............................................52
7.05 Maintenance of Property................................................................52
7.06 Insurance..............................................................................52
7.07 Payment of Obligations.................................................................53
7.08 Compliance with Laws...................................................................53
7.09 Compliance with ERISA..................................................................53
7.10 Inspection of Property and Books and Records...........................................53
7.11 Environmental Laws.....................................................................54
7.12 Use of Proceeds........................................................................54
7.13 Solvency...............................................................................54
7.14 Further Assurances.....................................................................54
ARTICLE VIII NEGATIVE COVENANTS..............................................................55
8.01 Limitation on Liens....................................................................55
8.02 Disposition of Assets..................................................................57
8.03 Consolidations and Mergers.............................................................57
8.04 Loans and Investments..................................................................58
8.05 Limitation on Indebtedness.............................................................59
8.06 Transactions with Affiliates...........................................................60
8.07 Use of Proceeds........................................................................60
8.08 Contingent Obligations.................................................................60
8.09 Joint Ventures.........................................................................61
8.10 Lease Obligations......................................................................61
8.11 Restricted Payments....................................................................61
8.12 ERISA..................................................................................62
8.13 Change in Business.....................................................................62
8.14 Accounting Changes.....................................................................62
8.15 Minimum Net Worth......................................................................62
8.16 Leverage Ratio.........................................................................62
8.17 Interest Coverage Ratio................................................................63
8.18 Statutory Surplus......................................................................63
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ARTICLE IX EVENTS OF DEFAULT.................................................................63
9.01 Event of Default.......................................................................63
(a) Non-Payment 3
(b) Representation or Warranty 4
(c) Specific Defaults 4
(d) Other Defaults 4
(e) Cross-Default 4
(f) Insolvency; Voluntary Proceedings 4
(g) Involuntary Proceedings 5
(h) ERISA 5
(i) Monetary Judgments 5
(j) Non-Monetary Judgments 5
(k) Collateral 5
(l) Change of Control 5
(m) Guarantor Defaults.............................................................66
9.02 Remedies...............................................................................66
9.03 Rights Not Exclusive...................................................................67
ARTICLE X THE AGENT..........................................................................67
10.01 Appointment and Authorization; "Agent"................................................67
10.02 Delegation of Duties..................................................................68
10.03 Liability of Agent....................................................................68
10.04 Reliance by Agent.....................................................................68
10.05 Notice of Default.....................................................................69
10.06 Credit Decision.......................................................................69
10.07 Indemnification of Agent..............................................................69
10.08 Agent in Individual Capacity..........................................................70
10.09 Successor Agent.......................................................................70
10.10 Withholding Tax.......................................................................70
ARTICLE XI MISCELLANEOUS.....................................................................72
11.01 Amendments and Waivers................................................................72
11.02 Notices...............................................................................73
11.03 No Waiver; Cumulative Remedies........................................................73
11.04 Costs and Expenses....................................................................73
11.05 Company Indemnification...............................................................74
11.06 Payments Set Aside....................................................................74
11.07 Successors and Assigns................................................................75
11.08 Assignments, Participations, etc......................................................75
11.09 Confidentiality.......................................................................76
11.10 Set-off...............................................................................77
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11.11 Automatic Debits of Fees..............................................................77
11.12 Notification of Addresses, Lending Offices, Etc.......................................77
11.13 Counterparts..........................................................................78
11.14 Severability..........................................................................78
11.15 No Third Parties Benefited............................................................78
11.16 Governing Law and Jurisdiction........................................................78
11.17 Waiver of Jury Trial..................................................................78
11.18 Entire Agreement......................................................................79
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SCHEDULES
Schedule 1.01 Existing Letters of Credit
Schedule 2.01 Commitments
Schedule 6.11 Permitted Liabilities
Schedule 6.19 Subsidiaries and Minority Interests
Schedule 6.24 Licenses
Schedule 8.01 Existing Liens
Schedule 8.04 Existing Investments
Schedule 8.05 Existing Indebtedness
Schedule 8.08 Contingent Obligations
Schedule 11.02 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Legal Opinion of Company's Counsel
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Note
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CREDIT AGREEMENT
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This CREDIT AGREEMENT is entered into as of October 3, 1997, among
International Alliance Services, Inc., a Delaware corporation (the "COMPANY"),
the several financial institutions from time to time party to this Agreement
(collectively, the "BANKS"; individually, a "BANK"), and Bank of America
National Trust & Savings Association, as agent for the Banks (the "Agent").
WHEREAS, the Banks have agreed to make available to the Company a
revolving credit facility with a letter of credit subfacility upon the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
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I.1 CERTAIN DEFINED TERMS. The following terms have the following
meanings:
"ACQUISITION" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly,
in (a) the acquisition of all or substantially all of the assets of a
Person, or of any business or division of a Person, (b) the acquisition
of in excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person, or otherwise causing any
Person to become a Subsidiary, or (c) a merger or consolidation or any
other combination with another Person (other than a Person that is a
Subsidiary) provided that the Company or the Subsidiary is the
surviving entity.
"AFFILIATE" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. A Person shall be deemed to control
another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the
ownership of voting securities, membership interests, by contract, or
otherwise.
"AGENT" means B of A in its capacity as agent for the Banks
hereunder, and any successor agent arising under Section 10.09.
"AGENT-RELATED PERSONS" means B of A and any successor agent
arising under Section 10.09 and any successor letter of credit issuing
bank hereunder, together with their respective Affiliates, and the
officers, directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.
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"AGENT'S PAYMENT OFFICE" means the address for payments set
forth on Schedule 11.02 or such other address as the Agent may from
time to time specify.
"AGREEMENT" means this Credit Agreement.
"ANNUAL STATEMENT" means the annual statutory financial
statement of any Insurance Subsidiary required to be filed with the
insurance commissioner (or similar authority) of its jurisdiction of
incorporation, which statement shall be in the form required by the
such Insurance Subsidiary's jurisdiction of incorporation or, if no
specific form is so required, in the form of financial statements
permitted by such insurance commissioner (or such similar authority) to
be used for filing annual statutory financial statements and shall
contain the type of information permitted by such insurance
commissioner (or such similar authority) to be disclosed therein,
together with all exhibits or schedules filed therewith.
"APPLICABLE MARGIN" shall mean on any date the applicable
percentage set forth below based upon the Level as shown in the
Compliance Certificate then most recently delivered to the Banks:
Revolving Loans Letters Of Credit
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Offshore Commitment
Level Rate Non-Financial Financial Fee
----- -------- ------------- -------- ----------
I 1.750% .875% 1.750% .500%
II 1.500% .750% 1.500% .375%
III 1.250% .625% 1.250% .375%
IV 1.000% .500% 1.000% .250%
; PROVIDED, HOWEVER that for the period from the date hereof until the
date that is 3 Business Days after the date the first Compliance
Certificate is delivered to the Banks pursuant to Section 7.02(b), the
Applicable Margin shall be deemed to be the Level determined pursuant
to the certificate referred to in Section 5.01(n); PROVIDED FURTHER
that, if the Company shall have failed to deliver to the Banks by the
date required hereunder any Compliance Certificate pursuant to Section
7.02(b), then from the date such Compliance Certificate was required to
be delivered until the date of such delivery the Applicable Margin
shall be deemed to be Level I. Each change in the Applicable Margin
shall take effect with respect to all outstanding Loans on the third
Business Day immediately succeeding the day on which such Compliance
Certificate is received by the Agent. Notwithstanding the foregoing, no
reduction in the Applicable Margin shall be effected if a Default or an
Event of Default shall have occurred and be continuing on the date when
such change would otherwise occur, it
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being understood that on the third Business Day immediately succeeding
the day on which such Default or Event of Default is either waived or
cured (assuming no other Default or Event of Default shall be then
pending), the Applicable Margin shall be reduced (on a prospective
basis) in accordance with the then most recently delivered Compliance
Certificate.
"ASSIGNEE" has the meaning specified in Section 11.08(a).
"ATTORNEY COSTS" means and includes all reasonable and
customary fees and disbursements of any law firm or other external
counsel, the allocated cost of internal legal services and all
disbursements of internal counsel.
"B OF A" means Bank of America National Trust & Savings
Association, a national banking association.
"BANK" has the meaning specified in the introductory clause
hereto. References to the "Banks" shall include B of A, including in
its capacity as Issuing Bank; for purposes of clarification only, to
the extent that B of A may have any rights or obligations in addition
to those of the Banks due to its status as Issuing Bank, its status as
such will be specifically referenced.
"BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act of
1978 (11 U.S.C. ss.101, ET SEQ.).
"BASE RATE" means, for any day, the higher of (a) 0.50% per
annum above the latest Federal Funds Rate; and (b) the rate of interest
in effect for such days as publicly announced from time to time by B of
A in San Francisco, California as its "reference rate." The "reference
rate" is a rate set by B of A based upon various factors including B of
A'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, above or below such announced rate. Any change in the
reference rate announced by B of A shall take effect at the opening of
business on the day specified in the public announcement of such
change.
"BASE RATE LOAN" means a Revolving Loan, or an L/C Advance,
that bears interest based on the Base Rate.
"BORROWING" means a borrowing hereunder consisting of Loans of
the same Type made to the Company on the same day by the Banks under
Article II, and, in the case of Offshore Rate Loans, having the same
Interest Period.
"BORROWING DATE" means any date on which a Borrowing occurs
under Section 2.03.
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"BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which commercial banks in Chicago or San Francisco are
authorized or required by law to close and, if the applicable Business
Day relates to any Offshore Rate Loan, means such a day on which
dealings are carried on in the applicable offshore interbank market.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"CAPITAL EXPENDITURES" means, for any period and with respect
to any Person, the aggregate of all expenditures by such Person 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 such Person and its
Subsidiaries.
"CAPITAL LEASE" has the meaning specified in the definition of
"Capital Lease Obligations."
"CAPITAL LEASE OBLIGATIONS" means all monetary obligations of
the Company or any of its Subsidiaries under any leasing or similar
arrangement which, in accordance with GAAP, is classified as a capital
lease ("CAPITAL LEASE").
"CASH COLLATERALIZE" means to pledge and deposit with or
deliver to the Agent, for the benefit of the Agent, the Issuing Bank
and the Banks, as additional collateral for the L/C Obligations, cash
or deposit account balances pursuant to documentation in form and
substance satisfactory to the Agent and the Issuing Bank (which
documents are hereby consented to by the Banks). Derivatives of such
terms shall have corresponding meaning. The Company hereby grants the
Agent, for the benefit of the Agent, the Issuing Bank and the Banks, a
security interest in all such cash and deposit account balances. Cash
collateral shall be maintained in blocked deposit accounts at B of A.
"CASH EQUIVALENTS" means:
(a) securities issued or fully guaranteed or insured
by the United States Government or any agency thereof and
backed by the full faith and credit of the United States
having maturities of not more than six months from the date of
acquisition;
(b) certificates of deposit, time deposits,
Eurodollar time deposits, repurchase agreements, reverse
repurchase agreements, or bankers' acceptances, having in each
case a tenor of not more than six months, issued by any Bank,
or by any U.S.
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commercial bank having combined capital and surplus of not
less than $100,000,000 whose short term securities are rated
at least A-1 by Standard & Poor's Corporation and P-1 by
Xxxxx'x Investors Service, Inc.;
(c) commercial paper of an issuer rated at least A-1
by Standard & Poor's Corporation or P-1 by Xxxxx'x Investors
Service Inc. and in either case having a tenor of not more
than three months.
"CHANGE OF CONTROL" means (a) any Person or any two or more
Persons acting in concert acquiring beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under
the Exchange Act), directly or indirectly, of capital stock of the
Company (or other securities convertible into such capital stock)
representing 25% or more of the combined voting power of all capital
stock of the Company entitled to vote in the election of directors,
other than capital stock having such power only by reason of the
happening of a contingency, or (b) during any period of twelve
consecutive calendar months, individuals who at the beginning of such
period constituted the Company's board of directors (together with any
new directors whose election by the Company's board of directors or
whose nomination for election by the Company's stockholders was
approved by a vote of at least a majority of the directors then still
in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved)
cease for any reasons other than death or disability to constitute a
majority of the directors then in office, or (c) during any period of
twelve consecutive calendar months, the ceasing of more than 25% of the
individuals (i) who hold an office possessing the title Vice President
or Executive Vice President or such title that ranks senior thereto of
the Company, the Company's direct Subsidiaries and parent Insurance
Subsidiaries and (ii) who are the principal operating manager or
manager, or such other title possessing equivalent duties of
Subsidiaries not described in clause (i) (collectively, "Senior
Management"), on the first day of each such period to be part of the
Senior Management of the Company and its Subsidiaries taken as a whole.
"CLOSING DATE" means the date on which all conditions
precedent set forth in Section 5.01 are satisfied or waived by all
Banks.
"CODE" means the Internal Revenue Code of 1986, as amended,
and regulations promulgated thereunder.
"COLLATERAL" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by the Company or any
Guarantor in or upon which a Lien now
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or hereafter exists in favor of the Banks, or the Collateral Agent on
behalf of the Banks, whether under this Agreement or under any other
documents executed by any such Persons and delivered to the Collateral
Agent.
"COLLATERAL AGENT" means the Agent acting in its capacity as
Collateral Agent pursuant to the Collateral Documents (other than the
Guaranty).
"COLLATERAL DOCUMENTS" means, collectively, (a) the Guaranty,
the Pledge Agreements, and other similar agreements between the Company
or its Subsidiaries and the Banks or the Collateral Agent for the
benefit of the Banks now or hereafter delivered to the Banks or the
Collateral Agent pursuant to or in connection with the transactions
contemplated hereby and (b) any amendments, supplements, modifications,
renewals, replacements, consolidations, substitutions and extensions of
any of the foregoing.
"COMMITMENT", as to each Bank, has the meaning specified in
Section 2.01.
"COMMITMENT FEE" has the meaning specified in Section 2.10(b).
"COMPANY" means International Alliance Services, Inc.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of EXHIBIT C.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, gross
consolidated interest expense for the period (including all
commissions, discounts, fees and other charges in connection with
standby letters of credit and similar instruments) for the Company and
its Subsidiaries, PLUS the portion of the upfront costs and expenses
for Swap Contracts (to the extent not included in gross interest
expense) fairly allocated to such Swap Contracts as expenses for such
period, as determined in accordance with GAAP and after giving effect
to any Swap Contract then in effect.
"CONTINGENT OBLIGATION" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with or
without recourse, (a) with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary
obligations") of another Person (the "primary obligor"), including any
obligation of that Person (i) to purchase, repurchase or otherwise
acquire such primary obligations or any security therefor, (ii) to
advance or provide funds for the payment or discharge of any such
primary obligation, or to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency
or any balance sheet item, level of income or
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financial condition of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation, or (iv) otherwise to assure or
hold harmless the holder of any such primary obligation against loss in
respect thereof (each, a "GUARANTY OBLIGATION"); (b) with respect to
any Surety Instrument (other than any Letter of Credit) issued for the
account of that Person or as to which that Person is otherwise liable
for reimbursement of drawings or payments; (c) to purchase any
materials, supplies or other property from, or to obtain the services
of, another Person if the relevant contract or other related document
or obligation requires that payment for such materials, supplies or
other property, or for such services, shall be made regardless of
whether delivery of such materials, supplies or other property is ever
made or tendered, or such services are ever performed or tendered, or
(d) in respect of any Swap Contract; PROVIDED, HOWEVER, that neither
the term "CONTINGENT OBLIGATION" nor the term "GUARANTY OBLIGATION"
shall include obligations in respect of insurance, reinsurance, surety
or fidelity contracts, bonds or policies entered into or issued in the
ordinary course of business. The amount of any Contingent Obligation
shall, in the case of Guaranty Obligations, be deemed equal to the
stated or determinable amount of the primary obligation in respect of
which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect
thereof, and in the case of other Contingent Obligations other than in
respect of Swap Contracts, shall be equal to the maximum reasonably
anticipated liability in respect thereof and, in the case of Contingent
Obligations in respect of Swap Contracts, shall be equal to the Swap
Termination Value.
"CONTRACTUAL OBLIGATION" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other
instrument, document or agreement to which such Person is a party or by
which it or any of its property is bound.
"CONVERSION/CONTINUATION DATE" means any date on which, under
Section 2.04, the Company (a) converts Loans of one Type to another
Type, or (b) continues as Loans of the same Type, but with a new
Interest Period, Loans having Interest Periods expiring on such date.
"CREDIT EXTENSION" means and includes (a) the making of any
Loans hereunder, and (b) the Issuance of any Letters of Credit
hereunder.
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"DEFAULT" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or
otherwise remedied during such time) constitute an Event of Default.
"DISPOSITION" means (a) the sale, lease, conveyance or other
disposition of Property in excess of $100,000, other than sales or
other dispositions expressly permitted under Section 8.02, and (b) the
sale or transfer by the Company or any Subsidiary of the Company of any
equity securities issued by any Subsidiary of the Company and held by
such transferor Person.
"DOLLARS", "DOLLARS" and "$" each mean lawful money of the
United States.
"EBIT" means, for any period, for the Company and its
Subsidiaries on a consolidated basis, determined in accordance with
GAAP, the sum of (a) Net Income (or net loss) for such period PLUS (b)
all amounts treated as expenses for interest to the extent included in
the determination of such Net Income (or loss), PLUS (c) 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 for these purposes without giving
effect to extraordinary losses or extraordinary gains; and PROVIDED
FURTHER, that for the purpose of computations under Sections 8.16 and
8.17 for any business acquired during the period of determination, EBIT
for such period if positive may, at the Company's option, and, if
negative, shall be determined on a pro forma basis as if such
acquisition had occurred as of the beginning of such period
notwithstanding the definition of Net Income.
"EBITDA" means, for any period, for the Company and its
Subsidiaries on a consolidated basis, determined in accordance with
GAAP, the sum of (a) the Net Income (or net loss) for such period PLUS
(b) all amounts treated as expenses for depreciation and interest and
the amortization of intangibles of any kind (including without
limitation, deferred policy acquisition costs) to the extent included
in the determination of such Net Income (or loss), PLUS (c) 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 for these purposes without giving
effect to extraordinary losses or extraordinary gains; and PROVIDED
FURTHER, that for the purpose of computations under Sections 8.16 and
8.17 for any business acquired during the period of determination,
EBITDA for such period if positive may, at the Company's option, and,
if negative, shall be determined on a pro forma basis as if such
acquisition had occurred as of the beginning of such period
notwithstanding the definition of Net Income.
"EFFECTIVE AMOUNT" means (a) with respect to any Revolving
Loans on any date, the aggregate outstanding principal amount thereof
after giving effect to any Borrowings and prepayments or repayments of
Revolving Loans occurring on
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such date and (b) with respect to any outstanding L/C Obligations on
any date, the amount of such L/C Obligations on such date after giving
effect to any Issuances of Letters of Credit occurring on such date and
any other changes in the aggregate amount of the L/C Obligations as of
such date, including as a result of any reimbursements of outstanding
unpaid drawings under any Letters of Credit or any reductions in the
maximum amount available for drawing under Letters of Credit taking
effect on such date. For purposes of Section 2.07, the Effective Amount
shall be determined without giving effect to any mandatory prepayments
to be made under said Section.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having a
combined capital and surplus of at least $100,000,000; (b) a commercial
bank organized under the laws of any other country which is a member of
the Organization for Economic Cooperation and Development (the "OECD"),
or a political subdivision of any such country, and having a combined
capital and surplus of at least $100,000,000, PROVIDED that such bank
is acting through a branch or agency located in the United States; and
(c) a Person that is primarily engaged in the business of commercial
banking (other than a non-bank affiliate of such Person) and that is
(i) a Subsidiary of a Bank, (ii) a Subsidiary of a Person of which a
Bank is a Subsidiary, or (iii) a Person of which a Bank is a
Subsidiary.
"ENVIRONMENTAL CLAIMS" means all claims, however asserted, by
any Governmental Authority or other Person alleging potential liability
or responsibility for violation of any Environmental Law, or for
release or injury to the environment.
"ENVIRONMENTAL LAWS" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental,
health, safety and land use matters.
"ENVIRONMENTAL PERMITS" has the meaning specified in Section
6.12(b).
"ERISA" means the Employee Retirement Income Security Act of
1974, and regulations promulgated thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with the Company within the meaning
of Section 414(b) or (c) of the Code (and Sections
-9-
17
414(m) and (o) of the Code for purposes of provisions relating to
Section 412 of the Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Company or any ERISA Affiliate
from a Pension Plan subject to Section 4063 of ERISA during a plan year
in which it was a substantial employer (as defined in Section
4001(a)(2) of ERISA) or a cessation of operations which is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Company or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or
4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event or
condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan or Multiemployer Plan; or
(f) the imposition of any liability under Title IV of ERISA, other than
PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
the Company or any ERISA Affiliate.
"EURODOLLAR RESERVE PERCENTAGE" has the meaning specified in
the definition of "Offshore Rate".
"EVENT OF DEFAULT" means any of the events or circumstances
specified in Section 9.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"EXCLUDED SUBSIDIARY" means, at any time, any Subsidiary whose
capital stock may not be pledged under a Pledge Agreement without
violating federal, state and/or local laws or regulations applicable to
such Subsidiary, or, in the case of an Insurance Subsidiary, causing an
adverse economic effect upon such Subsidiary's capital or surplus, it
being understood that (a) all Excluded Subsidiaries existing on the
date of this Agreement are listed on Schedule 6.19, Part B and (b) an
Excluded Subsidiary may not own the capital stock of any Subsidiary
which is not an Excluded Subsidiary.
"EXISTING LETTER OF CREDIT" means each letter of credit listed
on SCHEDULE 1.01.
"FDIC" means the Federal Deposit Insurance Corporation, and
any Governmental Authority succeeding to any of its principal
functions.
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"FEDERAL FUNDS RATE" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Bank of New
York (including any such successor, "H.15(519)") on the preceding
Business Day opposite the caption "Federal Funds (Effective)"; or, if
for any relevant day such rate is not so published on any such
preceding Business Day, the rate for such day will be the arithmetic
mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City
time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
"FEE LETTER" has the meaning specified in Section 2.10(a).
"FINANCIAL LETTERS OF CREDIT" means any Letter of Credit which
either the Agent or the Issuing Bank determines is required under
applicable law (including regulations and guidelines established by
banking regulators) relating to reserve requirements to be classified
as a financial letter of credit.
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its
principal functions.
"FURTHER TAXES" means any and all present or future taxes,
levies, assessments, imposts, duties, deductions, fees, withholdings or
similar charges (including, without limitation, net income taxes and
franchise taxes), and all liabilities with respect thereto, imposed by
any jurisdiction on account of amounts payable or paid pursuant to
Section 4.01.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date
of determination; PROVIDED, however, that for purposes of all
computations required to be made with respect to compliance by the
Company with SECTIONS 8.15, 8.16, and 8.17, such term shall mean
generally accepted accounting principles as in effect on the date of
this Agreement, applied in a manner consistent with those used in
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preparing the financial statements referred to in SECTION 6.11 (X) and
(Y).
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government (including,
without limitation, any board of insurance, insurance department or
insurance commissioner and any taxing authority or political
subdivision), and any corporation or other entity owned or controlled,
through stock or capital ownership or otherwise, by any of the
foregoing.
"GUARANTOR" means each Subsidiary of the Company that is not
an Excluded Subsidiary.
"GUARANTY" means the Guaranty, dated as of the date hereof,
duly executed and delivered by each Guarantor in favor of the Agent, on
behalf of the Banks, as the same may be amended, supplemented or
otherwise modified from time to time.
"GUARANTY OBLIGATION" has the meaning specified in the
definition of "Contingent Obligation."
"HAZARDOUS MATERIALS" means any toxic or hazardous waste,
substance or chemical or any pollutant, contaminant, chemical or other
substance defined or regulated pursuant to any Environmental Law,
including, without limitation, asbestos, petroleum, crude oil or any
fraction thereof.
"IBOR" has the meaning specified in the definition of
"Offshore Rate".
"INDEBTEDNESS" of any Person means, without duplication, (a)
all indebtedness for borrowed money; (b) all obligations issued,
undertaken or assumed as the deferred purchase price of property or
services (other than trade payables entered into in the ordinary course
of business on ordinary terms); (c) all non-contingent reimbursement or
payment obligations with respect to Surety Instruments and all L/C
Obligations; (d) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses; (e)
all indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case
with respect to property acquired by the Person (even though the rights
and remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property); (f) all
obligations with respect to capital leases;
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(g) all indebtedness referred to in clauses (a) through (f) above
secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien
upon or in property (including accounts and contracts rights) owned by
such Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness; and (h) all Guaranty Obligations
in respect of indebtedness or obligations of others of the kinds
referred to in clauses (a) through (g) above.
"INDEMNIFIED LIABILITIES" has the meaning specified in Section
11.05.
"INDEMNIFIED PERSON" has the meaning specified in Section
11.05.
"INDEPENDENT AUDITOR" has the meaning specified in Section
7.01(a).
"INSOLVENCY PROCEEDING" means, with respect to any Person, (a)
any case, action or proceeding with respect to such Person before any
court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshaling of assets for creditors,
or other, similar arrangement in respect of its creditors generally or
any substantial portion of its creditors; undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code.
"INSURANCE SUBSIDIARY" means any Subsidiary which is engaged
in the insurance business other than as a licensed agency.
"INTEREST PAYMENT DATE" means, as to any Offshore Rate Loan,
the last day of each Interest Period applicable to such Offshore Rate
Loan and, as to any Base Rate Loan, the last Business Day of each
March, June, September and December and each date such Loan is
converted into another Type of Loan; PROVIDED, HOWEVER, that if any
Interest Period exceeds three months, the date that falls three months
after the beginning of such Interest Period and after each Interest
Payment Date thereafter is also an Interest Payment Date.
"INTEREST COVERAGE RATIO" means, with respect to any period,
the ratio of EBIT for that period to Consolidated Interest Expense for
that period.
"INTEREST PERIOD" means, as to any Offshore Rate Loan, the
period commencing on the Borrowing Date of such Loan or on
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the Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date ONE, TWO,
THREE or SIX months thereafter as selected by the Company in its Notice
of Borrowing or Notice of Conversion/Continuation;
PROVIDED that:
(a) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be
extended to the following Business Day unless the result of
such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period
shall end on the preceding Business Day;
(b) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest
Period; and
(c) no Interest Period for any Revolving Loan shall
extend beyond the Revolving Termination Date.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"ISSUANCE DATE" has the meaning specified in Section 3.01(a).
"ISSUE" means, with respect to any Letter of Credit, to issue
or to extend the expiry of, or to renew or increase the amount of, such
Letter of Credit; and the terms "ISSUED," "ISSUING" and "ISSUANCE" have
corresponding meanings.
"ISSUING BANK" means B of A in its capacity as issuer of one
or more Letters of Credit hereunder together with any replacement
letter of credit issuer arising under Section 10.01(b) or Section
10.09.
"JOINT VENTURE" means a single-purpose corporation,
partnership, limited liability company, joint venture or other similar
legal arrangement (whether created by contract or conducted through a
separate legal entity) now or hereafter formed by the Company or any of
its Subsidiaries with another Person in order to conduct a common
venture or enterprise with such Person.
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"LENDING OFFICE" means, as to any Bank, the office or offices
of such Bank specified as its "Lending Office" or "Domestic Lending
Office" or "Offshore Lending Office", as the case may be, on SCHEDULE
11.02, or such other office or offices as such Bank may from time to
time notify the Company and the Agent.
"L/C ADVANCE" means each Bank's participation in any L/C
Borrowing in accordance with its Pro Rata Share.
"L/C AMENDMENT APPLICATION" means an application form for
amendment of outstanding standby or commercial documentary letters of
credit as shall at any time be in use at the Issuing Bank, as the
Issuing Bank shall request.
"L/C APPLICATION" means an application form for issuances of
standby or commercial documentary letters of credit as shall at any
time be in use at the Issuing Bank, as the Issuing Bank shall request.
"L/C BORROWING" means an extension of credit resulting from a
drawing under any Letter of Credit which shall not have been reimbursed
on the date when made nor converted into a Borrowing of Revolving Loans
under Section 3.03(c).
"L/C COMMITMENT" means the commitment of the Issuing Bank to
Issue, and the commitment of the Banks severally to participate in,
Letters of Credit from time to time Issued or outstanding under Article
III, in an aggregate amount not to exceed on any date the amount of
$5,000,000, as the same shall be reduced as a result of a reduction in
the L/C Commitment pursuant to Section 2.06; PROVIDED that the L/C
Commitment is a part of the combined Commitments, rather than a
separate, independent commitment.
"L/C OBLIGATIONS" means at any time the sum of (a) the
aggregate undrawn amount of all Letters of Credit then outstanding,
plus (b) the amount of all unreimbursed drawings under all Letters of
Credit, including all outstanding L/C Borrowings.
"L/C-RELATED DOCUMENTS" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document
relating to any Letter of Credit, including any of the Issuing Bank's
standard form documents for letter of credit issuances.
"LENDING OFFICE" means, as to any Bank, the office or offices
of such Bank specified as its "Lending Office" or "Domestic Lending
Office" or "Offshore Lending Office", as the case may be, on Schedule
11.02, or such other office or
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offices as such Bank may from time to time notify the Company and the
Agent.
"LETTER OF CREDIT" means any letter of credit (whether
Financial Letters of Credit or Non-Financial Letters of Credit) that is
Issued by the Issuing Bank pursuant to Article III.
"LEVEL" means, and includes, Level I, Level II, Level III,
Level IV, whichever is in effect at the relevant time.
"LEVEL I" shall exist at any time the Leverage Ratio is equal
to or greater than 2.50:1.0.
"LEVEL II" shall exist at any time the Leverage Ratio is
greater than or equal to 2.00:1.0 but less than 2.50:1.0.
"LEVEL III" shall exist at any time the Leverage Ratio is
greater than or equal to 1.50:1.0 but less than 2.00:1.0.
"LEVEL IV" shall exist at any time the Leverage Ratio is less
than or equal to 1.50:1.0.
"LEVERAGE RATIO" means, with respect to any period, the ratio
of total consolidated Indebtedness as of the end of that period to
EBITDA for that period.
"LICENSE" means any license, certificate or authority, permit
or other authorization which is required to be obtained from any
Governmental Authority in connection with the operation, ownership or
transaction of insurance business by an Insurance Subsidiary.
"LIEN" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preferential arrangement of
any kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional sale or
other title retention agreement, the interest of a lessor under a
capital lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any financing
statement naming the owner of the asset to which such lien relates as
debtor, under the Uniform Commercial Code or any comparable law) and
any contingent or other agreement to provide any of the foregoing, but
not including the interest of a lessor under an operating lease.
"LOAN" means an extension of credit by a Bank to the Company
under Article II or Article III in the form of a Revolving Loan or L/C
Borrowing.
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"LOAN DOCUMENTS" means this Agreement, any Notes, the Fee
Letters, the L/C Related Documents, the Collateral Documents and all
other documents delivered to the Agent or any Bank in connection
herewith.
"MAJORITY BANKS" means (a) at any time two Banks are party to
this Agreement, both Banks, and (b) at any other time, prior to the
termination of the Commitment, Banks holding at least 66-2/3% of
the then aggregate Commitments or, if the Commitments have been
terminated, Banks holding at least 66-2/3% of the then unpaid principal
amount of Loans and L/C Obligations.
"MARGIN STOCK" means "margin stock" as such term is defined in
Regulation G, T, U or X of the FRB.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business,
properties, condition (financial or otherwise) or prospects of the
Company and its Subsidiaries taken as a whole or as to the Insurance
Subsidiaries and their Subsidiaries taken as a whole; (b) a material
impairment of the ability of the Company or any Subsidiary to perform
under any Loan Document and to avoid any Event of Default; or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against the Company or any Subsidiary of any Loan
Document.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", within the
meaning of Section 4001(a)(3) of ERISA, to which the Company or any
ERISA Affiliate makes, is making, or is obligated to make contributions
or, during the preceding three calendar years, has made, or been
obligated to make, contributions.
"NAIC" means the National Association of Insurance
Commissioners or any successor thereto, or in lieu thereof, any other
association, agency or other organization performing advisory,
coordination or other like functions among insurance departments,
insurance commissioners and similar Governmental Authorities of the
various states of the United States toward the promotion of uniformity
in the practices of such Governmental Authorities.
"NET INCOME" shall mean for any period, the net income (or
loss) of the Company and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in
conformity with GAAP; PROVIDED, that there shall be excluded (i) the
income (or loss) of any entity accrued prior to the date it becomes a
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Subsidiary (or such other date as provided in the relevant acquisition
agreement) of the Company or is merged into or consolidated with the
Company or any Subsidiary or on which its assets are acquired by the
Company or any Subsidiary of the Company and (ii) the income of any
Subsidiary of the Company (including, without limitation, any Insurance
Subsidiary) to the extent that the declaration or payment of dividends
or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of, or without any
third-party consent required by, its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary.
"NET WORTH" means shareholders' equity as determined in
accordance with GAAP.
"NON-FINANCIAL LETTERS OF CREDIT" means Letters of Credit
which are not Financial Letters of Credit.
"NOTE" means a promissory note executed by the Company in
favor of a Bank pursuant to Section 2.02(b), in substantially the form
of EXHIBIT F.
"NOTICE OF BORROWING" means a notice in substantially the form
of EXHIBIT A.
"NOTICE OF CONVERSION/CONTINUATION" means a notice in
substantially the form of EXHIBIT B.
"OBLIGATIONS" means all advances, debts, liabilities,
obligations, covenants and duties arising under any Loan Document owing
by the Company to any Bank, the Agent, the Collateral Agent, or any
Indemnified Person, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due,
now existing or hereafter arising.
"OFFSHORE RATE" means, for any Interest Period, with respect
to Offshore Rate Loans comprising part of the same Borrowing, the rate
of interest per annum (rounded upward to the next 1/16th of 1%)
determined by the Agent as follows:
Offshore Rate = IBOR
--------------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"EURODOLLAR RESERVE PERCENTAGE" means for any day for any
Interest Period the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect
on such day (whether or not applicable to any
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26
Bank) under regulations issued from time to time by the FRB
for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"); and
"IBOR" means the rate of interest per annum
determined by the Agent as the rate at which dollar deposits
in the approximate amount of B of A's Offshore Rate Loan for
such Interest Period would be offered by B of A's Grand Cayman
Branch, Grand Cayman B.W.I. (or such other office as may be
designated for such purpose by B of A), to major banks in the
offshore dollar interbank market at their request at
approximately 10:00 a.m. (Chicago time) two Business Days
prior to the commencement of such Interest Period.
The Offshore Rate shall be adjusted automatically as to all
Offshore Rate Loans then outstanding as of the effective date of any
change in the Eurodollar Reserve Percentage.
"OFFSHORE RATE LOAN" means a Loan that bears interest based on
the Offshore Rate.
"ORGANIZATION DOCUMENTS" means, for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate
of determination or instrument relating to the rights of preferred
shareholders of such corporation, any shareholder rights agreement, and
all applicable resolutions of the board of directors (or any committee
thereof) of such corporation.
"OTHER TAXES" means any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, this Agreement or any other Loan Documents.
"PARTICIPANT" has the meaning specified in Section 11.08(d).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions
under ERISA.
"PENSION PLAN" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which the Company sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a
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27
multiple employer plan (as described in Section 4064(a) of ERISA) has
made contributions at any time during the immediately preceding five
(5) plan years.
"PERMITTED ACQUISITION THRESHOLD" means either (a) the total
consideration to be paid by the Company or any of its Subsidiaries in
connection with an Acquisition (as determined by the Company) is equal
to or in excess of $25,000,000 or (b) the total cash consideration to
be paid by the Company or any of its Subsidiaries in connection with an
Acquisition is equal to or in excess of $10,000,000.
"PERMITTED FOREIGN SUBSIDIARY INDEBTEDNESS" has the meaning
specified in Section 8.05(f).
"PERMITTED LIENS" has the meaning specified in Section 8.01.
"PERMITTED SELLER DEBT" has the meaning specified in Section
8.05(i).
"PERMITTED SWAP OBLIGATIONS" means all obligations (contingent
or otherwise) of the Company or any Subsidiary existing or arising
under Swap Contracts, provided that each of the following criteria is
satisfied: (a) such obligations are (or were) entered into by such
Person in the ordinary course of business for the purpose of directly
mitigating risks associated with liabilities, commitments or assets
held or reasonably anticipated by such Person, or changes in the value
of securities issued by such Person in conjunction with a securities
repurchase program not otherwise prohibited hereunder, and not for
purposes of speculation or taking a "market view;" (b) such Swap
Contracts do not contain (i) any provision ("walk-away" provision)
exonerating the non-defaulting party from its obligation to make
payments on outstanding transactions to the defaulting party, or (ii)
any provision creating or permitting the declaration of an event of
default, termination event or similar event upon the occurrence of an
Event of Default hereunder (other than an Event of Default under
Section 9.01(a)).
"PERSON" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
"PLAN" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Company sponsors or maintains or to which the
Company makes, is making, or is obligated to make contributions and
includes any Pension Plan.
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"PLEDGE AGREEMENTS" means, collectively, those certain Pledge
Agreements, duly executed and delivered by each of the Company and the
Guarantors pledging the stock of its Subsidiaries (other than Excluded
Subsidiaries) to the Collateral Agent, for the benefit of itself and
the Banks, as the same may be amended, supplemented or otherwise
modified from time to time.
"PLEDGED COLLATERAL" has the meaning specified in the relevant
Pledge Agreement.
"PROPERTY" means any interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or
intangible.
"PRO RATA SHARE" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth
decimal place) at such time of such Bank's Commitment divided by the
combined Commitments of all Banks.
"QUARTERLY STATEMENT" means the quarterly statutory financial
statement of any Insurance Subsidiary required to be filed with the
insurance commissioner (or similar authority) of its jurisdiction of
incorporation or, if no specific form is so required, in the form of
financial statements permitted by such insurance commissioner (or such
similar authority) to be used for filing quarterly statutory financial
statements and shall contain the type of financial information
permitted by such insurance commissioner (or such similar authority) to
be disclosed therein, together with all exhibits or schedules filed
therewith.
"REPORTABLE EVENT" means, any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, other than any
such event for which the 30-day notice requirement under ERISA has been
waived in regulations issued by the PBGC.
"REQUIREMENT OF LAW" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of
an arbitrator or of a Governmental Authority not subject to a stay
order issued by a court of competent jurisdiction, in each case
applicable to or binding upon the Person or any of its property or to
which the Person or any of its property is subject.
"RESPONSIBLE OFFICER" means the chief executive officer or the
president of the Company, or any other officer having substantially the
same authority and responsibility; or, with respect to compliance with
financial covenants, the chief financial officer or the treasurer of
the Company, or any
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29
other officer having substantially the same authority and
responsibility.
"REVOLVING LOAN" has the meaning specified in Section 2.01.
"REVOLVING TERMINATION DATE" means the earlier to occur of:
(a) October 3, 2000; and
(b) the date on which the Commitments terminate in
accordance with the provisions of this Agreement.
"SAP" means, with respect to any Insurance Subsidiary, the
statutory accounting practices prescribed or permitted by the insurance
commissioner (or other similar authority) in the jurisdiction of such
Person for the preparation of annual statements and other financial
reports by insurance companies of the same type as such Person in
effect from time to time; PROVIDED, HOWEVER, that for purposes of all
computations required to be made with respect to compliance by the
Company with Sections 8.18 and 8.19, such term shall mean statutory
accounting practices as in effect on the date of this Agreement,
applied in a manner consistent with those used in preparing the
financial statements referred to in SECTION 6.11(z).
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"SOLVENT" means, when used with respect to a Person, that (a)
the fair saleable value of the assets of such Person is in excess of
the total amount of the present value of its liabilities (including for
purposes of this definition all liabilities (including loss reserves as
determined by such Person), whether or not reflected on a balance sheet
prepared in accordance with GAAP and whether direct or indirect, fixed
or contingent, secured or unsecured, disputed or undisputed), (b) such
Person is able to pay its debts or obligations in the ordinary course
as they mature and (c) such Person does not have unreasonably small
capital to carry out its business as conducted and as proposed to be
conducted. "Solvency" shall have a correlative meaning.
"STATUTORY SURPLUS" means, with respect to any Insurance
Subsidiary at any time, the statutory capital and surplus of such
Insurance Subsidiary at such time, as determined in accordance with SAP
("Liabilities, Surplus and Other Funds" statement page, __, line __ of
the Annual Statement).
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"SUBSIDIARY" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business
entity of which more than 50% of the voting stock, membership interests
or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the
Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of the
Company.
"SURETY INSTRUMENTS" means all letters of credit (including
standby and documentary), banker's acceptances, bank guaranties,
shipside bonds, surety bonds and similar instruments.
"SWAP CONTRACT" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or
equity index swap or option, bond, note or xxxx option, interest rate
option, forward foreign exchange transaction, cap, collar or floor
transaction, currency swap, cross-currency rate swap, swaption,
currency option or any other, similar transaction (including any option
to enter into any of the foregoing) or any combination of the
foregoing, and, unless the context otherwise clearly requires, any
master agreement relating to or governing any or all of the foregoing.
"SWAP TERMINATION VALUE" means, in respect of any one or more
Swap Contracts, after taking into account the effect of any legally
enforceable netting agreement relating to such Swap Contracts, (a) for
any date on or after the date such Swap Contracts have been closed out
and termination value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior to the date referenced
in clause (a) the amount(s) determined as the xxxx-to-market value(s)
for such Swap Contracts, as determined by the Company based upon one or
more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include any Bank).
"TAXES" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the
case of each Bank and the Agent, respectively, taxes imposed on or
measured by its net income by the jurisdiction (or any political
subdivision thereof) under the laws of which such Bank or the Agent, as
the case may be, is organized or maintains a lending office.
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"TYPE" means, with respect to any Borrowing, its nature as a
Base Rate Loan or an Offshore Rate Loan.
"UNFUNDED PENSION LIABILITY" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the
current value of that Plan's assets, determined in accordance with the
assumptions used for funding the Pension Plan pursuant to Section 412
of the Code for the applicable plan year.
"UNITED STATES" and "U.S." each means the United States of
America.
"WHOLLY-OWNED SUBSIDIARY" means any corporation, association,
partnership, limited liability company, joint venture or other business
entity in which (other than directors' or other qualifying shares
required by law) 100% of the equity interests of each class having
ordinary voting power, and 100% of the equity interests of every other
class, in each case, at the time as of which any determination is being
made, is owned, beneficially and of record, by the Company, or by one
or more of the other Wholly-Owned Subsidiaries, or both.
I.2 OTHER INTERPRETIVE PROVISIONS. (a) The meanings of defined terms
are equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from
and including"; the words "to" and "until" each mean "to but
excluding", and the word "through" means "to and including."
(d) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent
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amendments and other modifications thereto, and (ii) references to any statute
or regulation are to be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting the
statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to the Agent, the
Company and the other parties, and are the products of all parties. Accordingly,
they shall not be construed against the Banks or the Agent merely because of the
Agent's or Banks' involvement in their preparation.
I.3 ACCOUNTING PRINCIPLES. (a) Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP and SAP, as the case may be, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter"
refer to such fiscal periods of the Company.
ARTICLE II
THE CREDITS
-----------
II.1 AMOUNTS AND TERMS OF COMMITMENT. Each Bank severally agrees, on
the terms and conditions set forth herein, to make loans to the Company (each
such loan, a "REVOLVING LOAN") from time to time on any Business Day during the
period from the Closing Date to the Revolving Termination Date, in an aggregate
amount not to exceed at any time outstanding the amount set forth on SCHEDULE
2.01 (such amount, as the same may be reduced under Section 2.05 or as a result
of one or more assignments under Section 10.08, the Bank's "COMMITMENT");
PROVIDED, HOWEVER, that, after giving effect to any Borrowing of Revolving Loans
(exclusive of Revolving Loans which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans), the Effective Amount of all outstanding Revolving Loans, and the
Effective Amount of all L/C Obligations, shall not at any time
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exceed the combined Commitments; AND PROVIDED FURTHER, that the Effective Amount
of the Revolving Loans of any Bank plus the participation of such Bank in the
Effective Amount of all L/C Obligations shall not at any time exceed such Bank's
Commitment. Within the limits of each Bank's Commitment, and subject to the
other terms and conditions hereof, the Company may borrow under this Section
2.01, prepay under Section 2.06 and reborrow under this Section 2.01.
II.2 LOAN ACCOUNTS.
(a The Loans made by each Bank and the Letters of Credit
Issued by the Issuing Bank shall be evidenced by one or more accounts or records
maintained by such Bank or Issuing Bank, as the case may be, in the ordinary
course of business. The accounts or records maintained by the Agent, the Issuing
Bank and each Bank shall be prima facie evidence of the amount of the Loans made
by the Banks to the Company, and the Letters of Credit issued for the account of
the Company, and the interest and payments thereon. Any failure so to record or
any error in doing so shall not, however, limit or otherwise affect the
obligation of the Company hereunder to pay any amount owing with respect to the
Loans or any Letter of Credit.
(b Upon the request of any Bank made through the Agent, the
Loans made by such Bank may be evidenced by one or more Notes, instead of or in
addition to loan accounts. Each such Bank shall record on the schedules annexed
to its Note(s) the date, amount and maturity of each Loan made by it and the
amount of each payment of principal made by the Company with respect thereto.
Each such Bank is irrevocably authorized by the Company to make such
recordations on its Note(s) and each Bank's record shall be deemed prima facie
correct; PROVIDED, HOWEVER, that the failure of a Bank to make, or an error in
making, a notation thereon with respect to any Loan shall not limit or otherwise
affect the obligations of the Company hereunder or under any such Note to such
Bank.
II.3 PROCEDURE FOR BORROWING.
(a Each Borrowing (other than on L/C Borrowing) shall be made
upon the Company's irrevocable written notice delivered to the Agent in the form
of a Notice of Borrowing (which notice must be received by the Agent prior to
10:00 a.m. (Chicago time) (i) two Business Days prior to the requested Borrowing
Date, in the case of Offshore Rate Loans and (ii) on the date of the requested
Borrowing Date, in the case of Base Rate Loans, specifying:
(i) the amount of the Borrowing, which shall be in an
aggregate minimum amount of $500,000, or any multiple of
$100,000 in excess thereof, in the case of Base Rate
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Loans, and $500,000, or any multiple of $100,000 in excess
thereof, in the case of Offshore Rate Loans;
(ii) the requested Borrowing Date, which shall be a
Business Day;
(iii) the Type of Loans comprising the Borrowing; and
(iv) the duration of the Interest Period applicable
to such Offshore Rate Loans included in such notice. If the
Notice of Borrowing fails to specify the duration of the
Interest Period for any Borrowing comprised of Offshore Rate
Loans, such Interest Period shall be one month;
PROVIDED, HOWEVER, that with respect to the Borrowing to be made on the Closing
Date, the Notice of Borrowing shall be delivered to the Agent not later than
10:00 a.m. (Chicago time) on the Closing Date and such Borrowing will consist of
Base Rate Loans only.
(b The Agent will promptly notify each Bank of its receipt of
any Notice of Borrowing and of the amount of such Bank's Pro Rata Share of that
Borrowing.
(c Each Bank will make the amount of its Pro Rata Share of
each Borrowing available to the Agent for the account of the Company at the
Agent's Payment Office by 2:00 p.m. (Chicago time) on the Borrowing Date
requested by the Company in funds immediately available to the Agent. The
proceeds of all such Loans will then be made available to the Company by the
Agent at such office by crediting the account of the Company on the books of B
of A with the aggregate of the amounts made available to the Agent by the Banks
and in like funds as received by the Agent.
(d After giving effect to any Borrowing, unless the Agent
shall otherwise consent, there may not be more than five different Interest
Periods in effect.
II.4 CONVERSION AND CONTINUATION ELECTIONS.
(a The Company may, upon irrevocable written notice to the Agent
in accordance with Section 2.04(b):
(i) elect, as of any Business Day, in the case of
Base Rate Loans, or as of the last day of the applicable Interest
Period, in the case of Offshore Rate Loans, to convert any such Loans
(or any part thereof in an aggregate minimum amount of $500,000, or any
multiple of $100,000 in excess thereof, in the case of Base Rate Loans,
and $500,000,
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or any multiple of $100,000 in excess thereof, in the case of Offshore
Rate Loans) into Loans of any other Type; or
(ii) elect as of the last day of the applicable
Interest Period, to continue any Loans having Interest Periods expiring
on such day (or any part thereof in an amount not less than $500,000,
or that is in an integral multiple of $100,000 in excess thereof);
PROVIDED, that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $500,000, such Offshore Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Company to continue such Loans as, and convert such Loans into, Offshore
Rate Loans shall terminate.
(b The Company shall deliver a Notice of
Conversion/Continuation to be received by the Agent not later than 10:00 a.m.
(Chicago time) at least (i) two Business Days in advance of the Conversion/
Continuation Date, if the Loans are to be converted into or continued as
Offshore Rate Loans and (ii) on the date of the Conversion/Continuation Date, if
the Loans are to be converted into Base Rate Loans, specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the aggregate amount of Loans to be converted or
continued;
(iii) the Type of Loans resulting from the proposed
conversion or continuation; and
(iv) other than in the case of conversions into Base
Rate Loans, the duration of the requested Interest Period.
(c If upon the expiration of any Interest Period applicable to
Offshore Rate Loans, the Company has failed to select a new Interest Period to
be applicable to such Offshore Rate Loans by the time specified in Section
2.04(b), or if any Default or Event of Default then exists, the Company shall be
deemed to have elected to convert such Offshore Rate Loans into an Offshore Rate
Loan with an Interest Period of one month effective as of the expiration date of
such Interest Period.
(d The Agent will promptly notify each Bank of its receipt of
a Notice of Conversion/Continuation, or, if no timely notice is provided by the
Company, the Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made ratably
according to
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the respective outstanding principal amounts of the Loans, with respect to which
the notice was given, held by each Bank.
(e Unless the Majority Banks otherwise consent, during the
existence of a Default or Event of Default, the Company may not elect to have a
Loan converted into or continued as an Offshore Rate Loan.
(f After giving effect to any conversion or continuation of
Offshore Rate Loans, unless the Agent shall otherwise consent, there may not be
more than five different Interest Periods in effect.
II.5 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS. The Company
may, upon not less than three Business Days' prior notice to the Agent,
terminate the Commitments, or permanently reduce the Commitments by an aggregate
minimum amount of $500,000 or any multiple of $500,000 in excess thereof;
UNLESS, after giving effect thereto and to any prepayments of Revolving Loans
made on the effective date thereof, (a) the Effective Amount of all Revolving
Loans and L/C Obligations would exceed the amount of the combined Commitments
then in effect or (b) the Effective Amount of all L/C Obligations thus
outstanding would exceed the L/C Commitment. If and to the extent specified by
the Company in the notice to the Agent, some or all of the reduction in the
combined Commitments shall be applied to reduce the L/C Commitment. Once reduced
in accordance with this Section, the Commitments may not be increased. Any
reduction of the Commitments shall be applied to each Bank according to its Pro
Rata Share. All accrued commitment and letter of credit fees to, but not
including, the effective date of any reduction or termination of the Commitments
shall be paid on the effective date of such reduction or termination.
II.6 OPTIONAL PREPAYMENTS. Subject to Section 4.04, the Company may, at
any time or from time to time, upon irrevocable notice to the Agent by 10:00
a.m. Chicago time, prepay Loans ratably among the Banks in whole or in part, in
minimum amounts of $500,000, or any multiple of $100,000 in excess thereof, in
the case of Base Rate Loans, and $500,000, or any multiple of $100,000 in excess
thereof, in the case of Offshore Rate Loans. Such notice of prepayment shall
specify the date and amount of such prepayment and the Type(s) of Loans to be
prepaid. The Agent will promptly notify each Bank of its receipt of any such
notice, and of such Bank's Pro Rata Share of such prepayment. If such notice is
given by the Company, the Company shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein, together with accrued interest to each such date on the amount prepaid
and any amounts required pursuant to Section 4.04.
II.7 MANDATORY PREPAYMENTS OF LOANS.
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(a If on any date the Effective Amount of L/C Obligations
exceeds the L/C Commitment, the Company shall Cash Collateralize on such date
the outstanding Letters of Credit in an amount equal to the excess of the
maximum amount then available to be drawn under the Letters of Credit over the
Aggregate L/C Commitment. Subject to Section 4.04, if on any date after giving
effect to any Cash Collateralization made on such date pursuant to the preceding
sentence, the Effective Amount of all Revolving Loans then outstanding plus the
Effective Amount of all L/C Obligations exceeds the combined Commitments, the
Company shall immediately, and without notice or demand, prepay the outstanding
principal amount of the Revolving Loans and L/C Advances by an amount equal to
the applicable excess.
(b GENERAL. Any prepayments pursuant to this Section 2.07 shall
be applied first to any Base Rate Loans then outstanding and then to Offshore
Rate Loans with the shortest Interest Periods remaining. The Company shall pay,
together with each prepayment under this Section 2.07, accrued interest on the
amount prepaid and any amounts required pursuant to Section 3.04.
II.8 REPAYMENT. The Company shall repay to the Banks on the Revolving
Termination Date the aggregate principal amount of Revolving Loans outstanding
on such date.
II.9 INTEREST.
(a) Each Loan shall bear interest on the outstanding principal
amount thereof from the applicable Borrowing Date at a rate per annum equal to
either the Offshore Rate PLUS the Applicable Margin or the Base Rate, as the
case may be (and subject to the Company's right to convert to other Types of
Loans under Section 2.04).
(b) Interest on each Loan shall be paid in arrears on each
Interest Payment Date. Interest shall also be paid on the date of any prepayment
of Loans under Section 2.06 or 2.07 for the portion of the Loans so prepaid and
upon payment (including prepayment) in full thereof and, during the existence of
any Event of Default, interest shall be paid on demand of the Agent at the
request or with the consent of the Majority Banks.
(c) Notwithstanding Section 2.09(a), while any Event of Default
exists or after acceleration, the Company shall pay interest (after as well as
before entry of judgment thereon to the extent permitted by law) on the
principal amount of all outstanding Obligations, at a rate per annum which is
determined by adding 2% per annum to the Applicable Margin then in effect for
such Loans; and in the case of Obligations not subject to an Applicable Margin,
at a rate per annum equal to the Base Rate plus 2%; PROVIDED, HOWEVER, that, on
and after the expiration of any
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Interest Period applicable to any Offshore Rate Loan outstanding on the date of
occurrence of such Event of Default or acceleration, the principal amount of
such Loan shall, during the continuation of such Event of Default or after
acceleration, bear interest at a rate per annum equal to the Base Rate plus 2%.
(d) Anything herein to the contrary notwithstanding, the
obligations of the Company to any Bank hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by such Bank would be contrary to
the provisions of any law applicable to such Bank limiting the highest rate of
interest that may be lawfully contracted for, charged or received by such Bank,
and in such event the Company shall pay such Bank interest at the highest rate
permitted by applicable law.
II.10 FEES.
(a) AGENCY FEES. The Company shall pay the fees to the Agent
for the Agent's own account, as required by the letter agreement ("FEE LETTER")
between the Company and the Agent, dated October 3, 1997.
(b) COMMITMENT FEES. The Company shall pay to the Agent for the
account of each Bank a commitment fee ("Commitment Fee") on the average daily
unused portion of such Bank's Commitment, computed on a quarterly basis in
arrears on the last Business Day of each calendar quarter based upon the daily
utilization for that quarter as calculated by the Agent, at the Applicable
Margin per annum. For purposes of calculating utilization under this Section,
the Commitments shall be deemed used to the extent of the Effective Amount of
Revolving Loans then outstanding, plus the Effective Amount of L/C Obligations
then outstanding. Such commitment fee shall accrue from the Closing Date to the
Revolving Termination Date and shall be due and payable quarterly in arrears on
the last Business Day of each March, June, September and December through the
Revolving Termination Date, with the final payment to be made on the Revolving
Termination Date; PROVIDED that, in connection with any reduction or termination
of Commitments under Section 2.05, the accrued commitment fee calculated for the
period ending on such date shall also be paid on the date of such reduction or
termination, with the following quarterly payment being calculated on the basis
of the period from such reduction or termination date to such quarterly payment
date. The commitment fees provided in this Section shall accrue at all times
after the above-mentioned commencement date, including at any time during which
one or more conditions in Article V are not met.
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II.11 COMPUTATION OF FEES AND INTEREST.
(a All computations of interest for Base Rate Loans when the
Base Rate is determined by B of A's "reference rate" shall be made on the basis
of a year of 365 or 366 days, as the case may be, and actual days elapsed. All
other computations of fees and interest shall be made on the basis of a 360-day
year and actual days elapsed (which results in more interest being paid than if
computed on the basis of a 365-day year). Interest and fees shall accrue during
each period during which interest or such fees are computed from the first day
thereof to the last day thereof.
(b Each determination of an interest rate by the Agent shall be
conclusive and binding on the Company and the Banks and shall be prima facie
evidence of such interest rate. The Agent will, at the request of the Company or
any Bank, deliver to the Company or the Bank, as the case may be, a statement
showing the quotations used by the Agent in determining any interest rate and
the resulting interest rate.
II.12 PAYMENTS BY THE COMPANY.
(a All payments to be made by the Company shall be made without
set-off, recoupment or counterclaim. Except as otherwise expressly provided
herein, all payments by the Company shall be made to the Agent for the account
of the Banks at the Agent's Payment Office, and shall be made in dollars and in
immediately available funds, no later than 12:00 Noon (Chicago time) on the date
specified herein. The Agent will promptly distribute to each Bank its Pro Rata
Share (or other applicable share as expressly provided herein) of such payment
in like funds as received. Any payment received by the Agent later than 12:00
Noon (Chicago time) shall be deemed to have been received on the following
Business Day and any applicable interest or fee shall continue to accrue for the
day actually received.
(b Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
(c Unless the Agent receives notice from the Company prior to
the date on which any payment is due to the Banks that the Company will not make
such payment in full as and when required, the Agent may assume that the Company
has made such payment in full to the Agent on such date in immediately available
funds and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent the
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Company has not made such payment in full to the Agent, each Bank shall repay to
the Agent on demand such amount distributed to such Bank, together with interest
thereon at the Federal Funds Rate for each day from the date such amount is
distributed to such Bank until the date repaid.
II.13 PAYMENTS BY THE BANKS TO THE AGENT.
(a Unless the Agent receives notice from a Bank on or prior to
the Closing Date or, with respect to any Borrowing after the Closing Date, at
least one Business Day prior to the date of such Borrowing, that such Bank will
not make available as and when required hereunder to the Agent for the account
of the Company the amount of that Bank's Pro Rata Share of the Borrowing, the
Agent may assume that each Bank has made such amount available to the Agent in
immediately available funds on the Borrowing Date and the Agent may (but shall
not be so required), in reliance upon such assumption, make available to the
Company on such date a corresponding amount. If and to the extent any Bank shall
not have made its full amount available to the Agent in immediately available
funds and the Agent in such circumstances has made available to the Company such
amount, that Bank shall on the Business Day following such Borrowing Date make
such amount available to the Agent, together with interest at the Federal Funds
Rate for each day during such period. A notice of the Agent submitted to any
Bank with respect to amounts owing under this clause (a) shall be conclusive,
absent manifest error. If such amount is so made available, such payment to the
Agent shall constitute such Bank's Loan on the date of Borrowing for all
purposes of this Agreement. If such amount is not made available to the Agent on
the Business Day following the Borrowing Date, the Agent will notify the Company
of such failure to fund and, upon demand by the Agent, the Company shall pay
such amount to the Agent for the Agent's account, together with interest thereon
for each day elapsed since the date of such Borrowing, at a rate per annum equal
to the interest rate applicable at the time to the Loans comprising such
Borrowing.
(b The failure of any Bank to make any Loan on any Borrowing
Date shall not relieve any other Bank of any obligation hereunder to make a Loan
on such Borrowing Date, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on any Borrowing Date.
II.14 SHARING OF PAYMENTS, ETC. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Bank shall immediately (a) notify the Agent of
such fact, and (b) purchase from the other Banks such
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participations in the Loans made by them as shall be necessary to cause such
purchasing Bank to share the excess payment pro rata with each of them;
PROVIDED, HOWEVER, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Bank, such purchase shall to that
extent be rescinded and each other Bank shall repay to the purchasing Bank the
purchase price paid therefor, together with an amount equal to such paying
Bank's ratable share (according to the proportion of (i) the amount of such
paying Bank's required repayment to (ii) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Company agrees
that any Bank so purchasing a participation from another Bank may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off, but subject to Section 11.10) with respect to such
participation as fully as if such Bank were the direct creditor of the Company
in the amount of such participation. The Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Banks following
any such purchases or repayments.
ARTICLE III
THE LETTERS OF CREDIT
---------------------
III.1 THE LETTER OF CREDIT SUBFACILITY.
(a On the terms and conditions set forth herein (i) the Issuing
Bank agrees, (A) from time to time on any Business Day during the period from
the Closing Date to the Revolving Termination Date to issue Letters of Credit
for the account of the Company, and to amend or renew Letters of Credit
previously issued by it, in accordance with Sections 3.02(c) and (d), and (B) to
honor drafts under the Letters of Credit; and (ii) the Banks severally agree to
participate in Letters of Credit Issued for the account of the Company;
PROVIDED, that the Issuing Bank shall not be obligated to Issue, and no Bank
shall be obligated to participate in, any Letter of Credit if as of the date of
Issuance of such Letter of Credit (the "ISSUANCE DATE") (1) the Effective Amount
of all L/C Obligations plus the Effective Amount of all Revolving Loans exceeds
the combined Commitments, (2) the participation of any Bank in the Effective
Amount of all L/C Obligations plus the Effective Amount of the Revolving Loans
of such Bank exceeds such Bank's Commitment or (3) the Effective Amount of L/C
Obligations exceeds the L/C Commitment. Within the foregoing limits, and subject
to the other terms and conditions hereof, the Company's ability to obtain
Letters of Credit shall be fully revolving, and, accordingly, the Company may,
during the foregoing period, obtain Letters of Credit to replace Letters of
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Credit which have expired or which have been drawn upon and reimbursed.
(b The Issuing Bank is under no obligation to Issue any Letter of
Credit if:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or restrain
the Issuing Bank from Issuing such Letter of Credit, or any Requirement
of Law applicable to the Issuing Bank or any request or directive
(whether or not having the force of law) from any Governmental Authority
with jurisdiction over the Issuing Bank shall prohibit, or request that
the Issuing Bank refrain from, the Issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon
the Issuing Bank with respect to such Letter of Credit any restriction,
reserve or capital requirement (for which the Issuing Bank is not
otherwise compensated hereunder) not in effect on the Closing Date, or
shall impose upon the Issuing Bank any unreimbursed loss, cost or
expense which was not applicable on the Closing Date and which the
Issuing Bank in good xxxxx xxxxx material to it;
(ii) the Issuing Bank has received written notice from
any Bank, the Agent or the Company, on or prior to the Business Day
prior to the requested date of Issuance of such Letter of Credit, that
one or more of the applicable conditions contained in Article V is not
then satisfied;
(iii) the expiry date of any requested Letter of Credit
is after the Revolving Termination Date, unless the Company has Cash
Collateralized, in form and substance satisfactory to the Issuing Bank,
its L/C Obligations under such Letter of Credit on or prior to the date
of the Issuance of such Letter of Credit;
(iv) any requested Letter of Credit does not provide
for drafts, or is not otherwise in form and substance reasonably
acceptable to the Issuing Bank, or the Issuance of a Letter of Credit
shall violate any applicable policies of the Issuing Bank; or
(v) such Letter of Credit is in a face amount less than
$25,000, unless such lesser amount is approved by the Agent and the
Issuing Bank, or is to be denominated in a currency other than Dollars.
III.2 ISSUANCE, AMENDMENT AND RENEWAL OF LETTERS OF CREDIT.
(a Each Letter of Credit shall be issued upon the irrevocable
written request of the Company received by the Issuing
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Bank (with a copy sent by the Company to the Agent) at least three days (or such
shorter time as the Issuing Bank may agree in a particular instance in its sole
discretion) prior to the proposed date of issuance. Each such request for
issuance of a Letter of Credit shall be by facsimile, confirmed immediately in
an original writing, in the form of an L/C Application, and shall specify in
form and detail satisfactory to the Issuing Bank: (i) the proposed date of
issuance of the Letter of Credit (which shall be a Business Day); (ii) the face
amount of the Letter of Credit; (iii) the expiry date of the Letter of Credit;
(iv) the name and address of the beneficiary thereof; (v) the documents to be
presented by the beneficiary of the Letter of Credit in case of any drawing
thereunder; (vi) the full text of any certificate to be presented by the
beneficiary in case of any drawing thereunder; and (vii) such other matters as
the Issuing Bank may require.
(b Prior to the Issuance of any Letter of Credit, the Issuing
Bank will confirm with the Agent (by telephone or in writing) that the Agent has
received a copy of the L/C Application or L/C Amendment Application from the
Company and, if not, the Issuing Bank will provide the Agent with a copy
thereof. Unless the Issuing Bank has received notice on or before the Business
Day the Issuing Bank is to issue a requested Letter of Credit from the Agent (A)
directing the Issuing Bank not to issue such Letter of Credit because such
issuance is not then permitted under Section 3.01(a) as a result of the
limitations set forth in clauses (1) through (3) thereof or Section 3.01(b)(ii);
or (B) that one or more conditions specified in Article V are not then
satisfied; then, subject to the terms and conditions hereof, the Issuing Bank
shall, with the written approval of the Agent, on the requested date, issue a
Letter of Credit for the account of the Company in accordance with the Issuing
Bank's usual and customary business practices.
(c From time to time while a Letter of Credit is outstanding and
prior to the Revolving Termination Date, the Issuing Bank will, upon the written
request of the Company received by the Issuing Bank (with a copy sent by the
Company to the Agent) at least three days (or such shorter time as the Issuing
Bank may agree in a particular instance in its sole discretion) prior to the
proposed date of amendment, amend any Letter of Credit issued by it. Each such
request for amendment of a Letter of Credit shall be made by facsimile,
confirmed immediately in an original writing, made in the form of an L/C
Amendment Application and shall specify in form and detail satisfactory to the
Issuing Bank: (i) the Letter of Credit to be amended; (ii) the proposed date of
amendment of the Letter of Credit (which shall be a Business Day); (iii) the
nature of the proposed amendment; and (iv) such other matters as the Issuing
Bank may require. The Issuing Bank shall be under no obligation to amend any
Letter of Credit if: (A) the Issuing Bank would have no obligation at such time
to issue such Letter of
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Credit in its amended form under the terms of this Agreement; or (B) the
beneficiary of any such letter of Credit does not accept the proposed amendment
to the Letter of Credit. The Agent will promptly notify the Banks of the receipt
by it of any L/C Application or L/C Amendment Application.
(d The Issuing Bank and the Banks agree that, while a Letter of
Credit is outstanding and prior to the Revolving Termination Date, at the option
of the Company and upon the written request of the Company received by the
Issuing Bank (with a copy sent by the Company to the Agent) at least five days
(or such shorter time as the Issuing Bank may agree in a particular instance in
its sole discretion) prior to the proposed date of notification of renewal, the
Issuing Bank shall be entitled to authorize the automatic renewal of any Letter
of Credit issued by it. Each such request for renewal of a Letter of Credit
shall be made by facsimile, confirmed immediately in an original writing, in the
form of an L/C Amendment Application, and shall specify in form and detail
satisfactory to the Issuing Bank: (i) the Letter of Credit to be renewed; (ii)
the proposed date of notification of renewal of the Letter of Credit (which
shall be a Business Day); (iii) the revised expiry date of the Letter of Credit;
and (iv) such other matters as the Issuing Bank may require. The Issuing Bank
shall be under no obligation so to renew any Letter of Credit if: (A) the
Issuing Bank would have no obligation at such time to issue or amend such Letter
of Credit in its renewed form under the terms of this Agreement; or (B) the
beneficiary of any such Letter of Credit does not accept the proposed renewal of
the Letter of Credit. If any outstanding Letter of Credit shall provide that it
shall be automatically renewed unless the beneficiary thereof receives notice
from the Issuing Bank that such Letter of Credit shall not be renewed, and if at
the time of renewal the Issuing Bank would be entitled to authorize the
automatic renewal of such Letter of Credit in accordance with this clause (d)
upon the request of the Company but the Issuing Bank shall not have received any
L/C Amendment Application from the Company with respect to such renewal or other
written direction by the Company with respect thereto, the Issuing Bank shall
nonetheless be permitted to allow such Letter of Credit to renew, and the
Company and the Banks hereby authorize such renewal, and, accordingly, the
Issuing Bank shall be deemed to have received an L/C Amendment Application from
the Company requesting such renewal.
(e The Issuing Bank may, at its election (or as required by the
Agent at the direction of the Majority Banks), deliver any notices of
termination or other communications to any Letter of Credit beneficiary or
transferee, and take any other action as necessary or appropriate, at any time
and from time to time, in order to cause the expiry date of such Letter of
Credit to be a date not later than the Revolving Termination Date.
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(f This Agreement shall control in the event of any conflict
with any L/C-Related Document (other than any Letter of Credit).
(g The Issuing Bank will also deliver to the Agent, concurrently
or promptly following its delivery of a Letter of Credit, or amendment to or
renewal of a Letter of Credit, to an advising bank or a beneficiary, a true and
complete copy of each such Letter of Credit or amendment to or renewal of a
Letter of Credit.
III.3 RISK PARTICIPATIONS, DRAWINGS AND REIMBURSEMENTS.
(a Immediately upon the Issuance of each Letter of Credit, each
Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Issuing Bank a participation in such Letter of Credit and each
drawing thereunder in an amount equal to the product of (i) the Pro Rata Share
of such Bank, times (ii) the maximum amount available to be drawn under such
Letter of Credit and the amount of such drawing, respectively. For purposes of
Section 2.01(b), each Issuance of a Letter of Credit shall be deemed to utilize
the Commitment of each Bank by an amount equal to the amount of such
participation.
(b In the event of any request for a drawing under a Letter of
Credit by the beneficiary or transferee thereof, the Issuing Bank will promptly
notify the Company. The Company shall reimburse the Issuing Bank (by an L/C
Borrowing or otherwise) prior to 12:00 Noon (Chicago time), on each date that
any amount is paid by the Issuing Bank under any Letter of Credit (each such
date, an "HONOR DATE"), in an amount equal to the amount so paid by the Issuing
Bank. In the event the Company fails to reimburse the Issuing Bank for the full
amount of any drawing under any Letter of Credit by 12:00 Noon (Chicago time) on
the Honor Date, the Issuing Bank will promptly notify the Agent and the Agent
will promptly notify each Bank thereof, and the Company shall be deemed to have
requested that Base Rate Loans in an aggregate amount equal to the unreimbursed
drawing be made by the Banks to be disbursed on the Honor Date under such Letter
of Credit, subject to the amount of the unutilized portion of the Revolving
Commitment and subject to the conditions set forth in Section 5.02. Any notice
given by the Issuing Bank or the Agent pursuant to this clause (b) may be oral
if immediately confirmed in writing (including by facsimile); PROVIDED that the
lack of such an immediate confirmation shall not affect the conclusiveness or
binding effect of such notice.
(c Each Bank shall upon any notice pursuant to Section 3.03(b)
make available to the Agent for the account of the relevant Issuing Bank an
amount in Dollars and in immediately available funds equal to its Pro Rata Share
of the amount of the drawing, whereupon the participating Banks shall (subject
to Section 3.03(d)) each be deemed to have made a Revolving Loan consisting of
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a Base Rate Loan to the Company in that amount. If any Bank so notified fails
to make available to the Agent for the account of the Issuing Bank the amount of
such Bank's Pro Rata Share of the amount of the drawing by no later than 2:00
p.m. (Chicago time) on the Honor Date, then interest shall accrue on such Bank's
obligation to make such payment, from the Honor Date to the date such Bank makes
such payment, at a rate per annum equal to the Federal Funds Rate in effect from
time to time during such period. The Agent will promptly give notice of the
occurrence of the Honor Date, but failure of the Agent to give any such notice
on the Honor Date or in sufficient time to enable any Bank to effect such
payment on such date shall not relieve such Bank from its obligations under this
Section 3.03.
(d Each Bank's obligation in accordance with this Agreement to
make the Revolving Loans or L/C Advances, as contemplated by this Section 3.03,
as a result of a drawing under a Letter of Credit, shall be absolute and
unconditional and without recourse to the Issuing Bank and shall not be affected
by any circumstance, including (i) any set-off, counterclaim, recoupment,
defense or other right which such Bank may have against the Issuing Bank, the
Company or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default, an Event of Default or a Material Adverse Effect; or
(iii) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing; PROVIDED, however, that each Bank's obligation
to make Revolving Loans under this Section 3.03 is subject to the conditions set
forth in Section 5.02.
III.4 REPAYMENT OF PARTICIPATIONS.
(a Upon (and only upon) receipt by the Agent for the account of
the Issuing Bank of immediately available funds from the Company (i) in
reimbursement of any payment made by the Issuing Bank under the Letter of Credit
with respect to which any Bank has paid the Agent for the account of the Issuing
Bank for such Bank's participation in the Letter of Credit pursuant to Section
3.03 or (ii) in payment of interest thereon, the Agent will pay to each Bank, in
the same funds as those received by the Agent for the account of the Issuing
Bank, the amount of such Bank's Pro Rata Share of such funds, and the Issuing
Bank shall receive the amount of the Pro Rata Share of such funds of any Bank
that did not so pay the Agent for the account of the Issuing Bank.
(b If the Agent or the Issuing Bank is required at any time to
return to the Company, or to a trustee, receiver, liquidator, custodian, or any
official in any Insolvency Proceeding, any portion of the payments made by the
Company to the Agent for the account of the Issuing Bank pursuant to Section
3.04(a) in reimbursement of a payment made under the Letter of Credit or
interest or fee thereon, each Bank shall, on demand of
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the Agent, forthwith return to the Agent or the Issuing Bank the amount of its
Pro Rata Share of any amounts so returned by the Agent or the Issuing Bank plus
interest thereon from the date such demand is made to the date such amounts are
returned by such Bank to the Agent or the Issuing Bank, at a rate per annum
equal to the Federal Funds Rate in effect from time to time.
III.5 ROLE OF THE ISSUING BANK.
(a Each Bank and the Company agree that, in paying any drawing
under a Letter of Credit, the Issuing Bank shall not have any responsibility to
obtain any document (other than any sight draft and certificates expressly
required by the Letter of Credit) or to ascertain or inquire as to the validity
or accuracy of any such document which on its face appears valid or the
authority of the Person executing or delivering any such document.
(b No Agent-Related Person nor any of the respective
correspondents, participants or assignees of the Issuing Bank shall be liable to
any Bank for: (i) any action taken or omitted in connection herewith at the
request or with the approval of the Banks (including the Majority Banks, as
applicable); (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any L/C-Related Document.
(c The Company hereby assumes all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of
Credit; PROVIDED, however, that this assumption is not intended to, and shall
not, preclude the Company's pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. No
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the Issuing Bank, shall be liable or responsible for any of the
matters described in clauses (i) through (vii) of Section 3.06; PROVIDED,
however, anything in such clauses to the contrary notwithstanding, that the
Company may have a claim against the Issuing Bank, and the Issuing Bank may be
liable to the Company, to the extent, but only to the extent, of any direct, as
opposed to consequential or exemplary, damages suffered by the Company which the
Company proves were caused by the Issuing Bank's willful misconduct or gross
negligence or the Issuing Bank's willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing: (i) the Issuing
Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) the Issuing Bank shall not be responsible
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or
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the rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason.
III.6 OBLIGATIONS ABSOLUTE. The obligations of the Company under this
Agreement and any L/C-Related Document to reimburse the Issuing Bank for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any drawing
under a Letter of Credit converted into Revolving Loans, shall be unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement and each such other L/C-Related Document under all circumstances,
including the following:
(i) any lack of validity or enforceability of this
Agreement or any L/C-Related Document;
(ii) any permitted change in the time, manner or place
of payment of, or in any other term of, all or any of the obligations of
the Company in respect of any Letter of Credit or any other amendment or
waiver of or any consent to departure from all or any of the L/C-Related
Documents;
(iii) the existence of any claim, set-off, defense or
other right that the Company may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any Person for
whom any such beneficiary or any such transferee may be acting), the
Issuing Bank or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by the L/C-Related
Documents or any unrelated transaction;
(iv) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under any Letter of Credit;
(v) any payment by the Issuing Bank under any Letter of
Credit against presentation of a draft or certificate that does not
strictly comply with the terms of any Letter of Credit; or any permitted
payment made by the Issuing Bank under any Letter of Credit to any
Person purporting to be a trustee in bankruptcy, debtor-in-possession,
assignee for the benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any transferee of
any Letter of Credit, including any arising in connection with any
Insolvency Proceeding;
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(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any other guarantee, for all or any of the obligations of
the Company in respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or
a discharge of, the Company or a guarantor.
III.7 CASH COLLATERAL PLEDGE. Upon (i) the request of the Agent or the
Majority Banks, (A) if the Issuing Bank has honored any full or partial drawing
request on any Letter of Credit and such drawing has resulted in an L/C
Borrowing hereunder, or (B) if, as of the Revolving Termination Date, any
Letters of Credit may for any reason remain outstanding and partially or wholly
undrawn, or (ii) the occurrence of the circumstances described in Section
2.07(a) requiring the Company to Cash Collateralize Letters of Credit, then, the
Company shall immediately Cash Collateralize the L/C Obligations in an amount
equal to such L/C Obligations.
III.8 LETTER OF CREDIT FEES.
(a) The Company shall pay to the Agent for the account of each
of the Banks a letter of credit fee with respect to the Letters of Credit equal
to the Applicable Margin per annum of the average daily maximum amount available
to be drawn of the outstanding Letters of Credit, computed on a quarterly basis
in arrears on the last Business Day of each March, June, September and December
based upon Letters of Credit outstanding for that quarter as calculated by the
Agent. Such letter of credit fees shall be due and payable quarterly in arrears
on the last Business Day of each calendar quarter during which Letters of Credit
are outstanding, commencing on the first such quarterly date to occur after the
Closing Date, through the Revolving Termination Date (or such later date upon
which the outstanding Letters of Credit shall expire), with the final payment to
be made on the Revolving Termination Date (or such later expiration date).
(b) The Company shall pay to the Issuing Bank a letter of credit
fronting fee for each Letter of Credit Issued by the Issuing Bank equal to.250%
per annum of the face amount (or increased face amount, as the case may be) of
such Letter of Credit. Such Letter of Credit fronting fee shall be due and
payable quarterly in arrears on the last Business Day of each calendar quarter
during which such Letter of Credit is outstanding, commencing on the first such
quarterly date to occur after such Letter of Credit is issued, through the
Revolving Termination Date (or such later date upon which such Letter of Credit
shall expire),
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with the final payment to be made on the Revolving Termination Date (or such
later expiration date).
(c) The Company shall pay to the Issuing Bank from time to time
on demand the normal issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the Issuing Bank relating to
letters of credit as from time to time in effect.
III.9 UNIFORM CUSTOMS AND PRACTICE. The Uniform Customs and Practice
for Documentary Credits as published by the International Chamber of Commerce
most recently at the time of issuance of any Letter of Credit shall (unless
otherwise expressly provided in the Letters of Credit) apply to the Letters of
Credit.
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
--------------------------------------
IV.1 TAXES.
(a) Any and all payments by the Company to each Bank or the
Agent under this Agreement and any other Loan Document shall be made free and
clear of, and without deduction or withholding for, any Taxes. In addition, the
Company shall pay all Other Taxes.
(b) If the Company shall be required by law to deduct or
withhold any Taxes, Other Taxes or Further Taxes from or in respect of any sum
payable hereunder to any Bank or the Agent, then:
(i) the sum payable shall be increased as necessary so
that, after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable under
this Section), such Bank or the Agent, as the case may be, receives and
retains an amount equal to the sum it would have received and retained
had no such deductions or withholdings been made;
(ii) the Company shall make such deductions and
withholdings;
(iii) the Company shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) the Company shall also pay to each Bank or the
Agent for the account of such Bank, at the time interest is paid,
Further Taxes in the amount that the respective Bank specifies as
necessary to preserve the after-tax yield the Bank
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would have received if such Taxes, Other Taxes or Further Taxes had not
been imposed.
(c) The Company agrees to indemnify and hold harmless each Bank
and the Agent for the full amount of i) Taxes, ii) Other Taxes, and iii) Further
Taxes in the amount that the respective Bank specifies as necessary to preserve
the after-tax yield the Bank would have received if such Taxes, Other Taxes or
Further Taxes had not been imposed, and any liability (including penalties,
interest, additions to tax and expenses) arising therefrom or with respect
thereto, whether or not such Taxes, Other Taxes or Further Taxes were correctly
or legally asserted. Payment under this indemnification shall be made within 30
days after the date the Bank or the Agent makes written demand therefor.
(d) Within 30 days after the date of any payment pursuant to
this Section by the Company of Taxes, Other Taxes or Further Taxes, the Company
shall furnish to each Bank or the Agent the original or a certified copy of a
receipt evidencing payment thereof, or other evidence of payment satisfactory to
such Bank or the Agent.
(e) If the Company is required to pay any amount to any Bank or
the Agent pursuant to clauses (b) or (c) of this Section, then such Bank shall
use reasonable efforts (consistent with legal and regulatory restrictions) to
change the jurisdiction of its Lending Office so as to eliminate any such
additional payment by the Company which may thereafter accrue, if such change in
the sole judgment of such Bank is not otherwise disadvantageous to such Bank.
IV.2 ILLEGALITY.
(a) If any Bank determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its applicable Lending Office to make
Offshore Rate Loans, then, on notice thereof by the Bank to the Company through
the Agent, any obligation of that Bank to make Offshore Rate Loans shall be
suspended until the Bank notifies the Agent and the Company that the
circumstances giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful to maintain any
Offshore Rate Loan, the Company shall, upon its receipt of notice of such fact
and demand from such Bank (with a copy to the Agent), prepay in full such
Offshore Rate Loans of that Bank then outstanding, together with interest
accrued thereon and amounts required under Section 4.04, either on the last day
of the Interest
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Period thereof, if the Bank may lawfully continue to maintain such Offshore Rate
Loans to such day, or immediately, if the Bank may not lawfully continue to
maintain such Offshore Rate Loan. If the Company is required to so prepay any
Offshore Rate Loan, then concurrently with such prepayment, the Company may
borrow from the affected Bank, in the amount of such repayment, a Base Rate
Loan.
(c) If the obligation of any Bank to make or maintain Offshore
Rate Loans has been so terminated or suspended, the Company may elect, by giving
notice to the Bank through the Agent that all Loans which would otherwise be
made by the Bank as Offshore Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Agent under this Section,
the affected Bank shall designate a different Lending Office with respect to its
Offshore Rate Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Bank, be
illegal or otherwise disadvantageous to the Bank.
IV.3 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Bank determines that, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance by that Bank with any guideline or request
from any central bank or other Governmental Authority (whether or not having the
force of law), there shall be any increase in the cost to such Bank of agreeing
to make or making, funding or maintaining any Offshore Rate Loans, or
participating in Letters of Credit, or, in the case of the Issuing Bank, any
increase in the cost to the Issuing Bank of agreeing to issue, issuing or
maintaining any Letter of Credit or of agreeing to make or making, funding or
maintaining any unpaid drawing under any Letter of Credit, then the Company
shall be liable for, and shall from time to time, upon demand (with a copy of
such demand to be sent to the Agent), pay to the Agent for the account of such
Bank, additional amounts as are sufficient to compensate such Bank for such
increased costs.
(b) If any Bank shall have determined that (i) the introduction
of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or (iv) compliance by
the Bank (or its Lending Office) or any corporation controlling the Bank with
any Capital Adequacy Regulation, affects or would affect the amount of capital
required or expected to be maintained by the Bank or any corporation controlling
the Bank and (taking into consideration such Bank's or such corporation's
policies with respect to capital adequacy and such Bank's desired return on
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capital) determines that the amount of such capital is increased as a
consequence of its Commitment, loans, credits or obligations under this
Agreement, then, upon demand of such Bank to the Company through the Agent, the
Company shall pay to the Bank, from time to time as specified by the Bank,
additional amounts sufficient to compensate the Bank for such increase.
IV.4 FUNDING LOSSES. The Company shall reimburse each Bank and
hold each Bank harmless from any loss or expense which the Bank may sustain or
incur as a consequence of:
(i) the failure of the Company to make on a timely basis any
payment of principal of any Offshore Rate Loan;
(ii) the failure of the Company to borrow, continue or convert
a Loan after the Company has given (or is deemed to have given) a
Notice of Borrowing or a Notice of Conversion/ Continuation;
(iii) the failure of the Company to make any prepayment in
accordance with any notice delivered under Section 2.06;
(iv) the prepayment (including pursuant to Section 2.07) or
other payment (including after acceleration thereof) of an Offshore
Rate Loan on a day that is not the last day of the relevant Interest
Period; or
(v) the automatic conversion under Section 2.04 of any
Offshore Rate Loan to a Base Rate Loan on a day that is not the last
day of the relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were obtained. For purposes of
calculating amounts payable by the Company to the Banks under this Section and
under Section 4.03(a), each Offshore Rate Loan made by a Bank (and each related
reserve, special deposit or similar requirement) shall be conclusively deemed to
have been funded at the IBOR used in determining the Offshore Rate for such
Offshore Rate Loan by a matching deposit or other borrowing in the interbank
eurodollar
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market for a comparable amount and for a comparable period, whether or not such
Offshore Rate Loan is in fact so funded.
IV.5 INABILITY TO DETERMINE RATES. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the Offshore
Rate for any requested Interest Period with respect to a proposed Offshore Rate
Loan, or that the Offshore Rate applicable pursuant to Section 2.09(a) for any
requested Interest Period with respect to a proposed Offshore Rate Loan does not
adequately and fairly reflect the cost to the Banks of funding such Loan, the
Agent will promptly so notify the Company and each Bank. Thereafter, the
obligation of the Banks to make or maintain Offshore Rate Loans hereunder shall
be suspended until the Agent revokes such notice in writing. Upon receipt of
such notice, the Company may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If the Company does not revoke
such Notice, the Banks shall make, convert or continue the Loans, as proposed by
the Company, in the amount specified in the applicable notice submitted by the
Company, but such Loans shall be made, converted or continued as Base Rate Loans
instead of Offshore Rate Loans.
IV.6 RESERVES ON OFFSHORE RATE LOANS. The Company shall pay to each
Bank, as long as such Bank shall be required under regulations of the FRB to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as "Eurocurrency
liabilities"), additional costs on the unpaid principal amount of each Offshore
Rate Loan equal to the actual costs of such reserves allocated to such Loan by
the Bank (as determined by the Bank in good faith, which determination shall be
conclusive), payable on each date on which interest is payable on such Loan,
provided the Company shall have received at least 15 days' prior written notice
(with a copy to the Agent) of such additional interest from the Bank. If a Bank
fails to give notice 15 days prior to the relevant Interest Payment Date, such
additional interest shall be payable 15 days from receipt of such notice.
IV.7 CERTIFICATES OF BANKS. Any Bank claiming reimbursement or
compensation under this Article IV shall deliver to the Company (with a copy to
the Agent) a certificate setting forth in reasonable detail the amount payable
to the Bank hereunder and such certificate shall be conclusive and binding on
the Company in the absence of manifest error. Notwithstanding anything to the
contrary contained in this Agreement, no amounts shall be payable by the Company
pursuant to SECTIONS 4.03, 4.04 or 4.06 with respect to any period commencing
more than 180 days before the delivery of the certificate contemplated by this
SECTION 4.07 unless such amounts are claimed as a result of the retroactive
effect of any newly enacted or adopted law, rule or regulation and such
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certificate is delivered within 180 days after such enactment or adoption.
IV.8 SURVIVAL. The agreements and obligations of the Company in this
Article IV shall survive the payment of all other Obligations.
ARTICLE V
CONDITIONS PRECEDENT
V.1 CONDITIONS OF INITIAL CREDIT EXTENSIONS. The obligation of each
Bank to make its initial Credit Extension hereunder is subject to the condition
that the Agent shall have received on or before the Closing Date all of the
following, in form and substance satisfactory to the Agent and each Bank, and in
sufficient copies for each Bank:
(a) CREDIT AGREEMENT AND NOTES. This Agreement and the Notes
executed by each party thereto;
(b) RESOLUTIONS; INCUMBENCY.
(i) Copies of the resolutions of the board of directors
of the Company and each Subsidiary that may become party to a Loan
Document authorizing the transactions contemplated hereby, certified as
of the Closing Date by the Secretary or an Assistant Secretary of such
Person; and
(ii) A certificate of the Secretary or Assistant
Secretary of the Company, and each Subsidiary that may become party to a
Loan Document certifying the names and true signatures of the officers
of the Company or such Subsidiary authorized to execute, deliver and
perform, as applicable, this Agreement, and all other Loan Documents to
be delivered by it hereunder;
(c) ORGANIZATION DOCUMENTS; GOOD STANDING. Each of the
following documents:
(i) the articles or certificate of incorporation, the
bylaws and board of directors resolutions of the Company and each
Guarantor as in effect on the Closing Date, certified by the Secretary
or Assistant Secretary of such Person as of the Closing Date; and
(ii) a good standing certificate for the Company and
each Guarantor from the Secretary of State (or similar, applicable
Governmental Authority) of its state of
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incorporation and each state where such Person is qualified to do
business as a foreign corporation as of a recent date, together with a
bring-down certificate by facsimile, dated the Closing Date;
(d) LEGAL OPINIONS. An opinion addressed to the Agent, the
Collateral Agent and the Banks (i) of Xxxxxx & Associates, counsel to the
Company, substantially in the form of EXHIBIT D and (ii) from local counsel in
such jurisdictions as the Agent may request, such opinion to be in form and
substance acceptable to the Agent.
(e) PAYMENT OF FEES. Evidence of payment by the Company of all
accrued and unpaid fees, costs and expenses to the extent then due and payable
on the Closing Date, together with Attorney Costs of B of A to the extent
invoiced prior to or on the Closing Date, plus such additional amounts of
Attorney Costs as shall constitute B of A's reasonable estimate of Attorney
Costs incurred or to be incurred by it through the closing proceedings (provided
that such estimate shall not thereafter preclude final settling of accounts
between the Company and B of A); including any such costs, fees and expenses
arising under or referenced in Sections 2.10 and 10.04;
(f) CERTIFICATE. A certificate signed by a Responsible Officer
of the Borrower, dated as of the Closing Date:
(i) stating that the representations and warranties
contained in Article VI are true and correct on and as of such date, as
though made on and as of such date;
(ii) stating that no Default or Event of Default exists
or would result from the Credit Extension;
(iii) stating that there has occurred since December
31, 1996, no event or circumstance that has resulted or could reasonably
be expected to result in a Material Adverse Effect; and
(iv) delineating the Applicable Margin after giving pro
forma effect to the Loans to be incurred on the Closing Date, and the
refinancing of the Indebtedness referred to in Section 5.01(h).
(g) COLLATERAL DOCUMENTS. The Collateral Documents, executed by
the Company and each Subsidiary party to such Collateral Document, in
appropriate form for recording, where necessary, together with:
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(i) all certificates and instruments representing the
Pledged Collateral, stock transfer powers executed in blank as the
Collateral Agent or the Banks may specify; and
(ii) evidence that all other actions necessary or, in
the opinion of the Collateral Agent or the Banks, desirable to perfect
and protect the first priority security interest created by the
Collateral Documents have been taken.
(h) BANK PAYOFF LETTER. A bank payoff letter, or other evidence
of satisfaction, in form and substance acceptable to the Agent from CoreStates
Bank, N.A., to the effect that the total amount due under the Company's
agreements with such lender howsoever due and owing (whether as principal,
interest or premium) shall be satisfied (and such agreements terminated) upon
payment of an amount certain, together with such lien releases and other
documents as the Agent shall require.
(i) SOLVENCY CERTIFICATE. A written solvency certificate from
the chief financial officer of the Company in form and content satisfactory to
the Banks, dated the initial Borrowing Date, with respect to the value, Solvency
and other factual information of, or relating to, as the case may be, Company,
after giving effect to the initial Borrowing.
(j) OTHER DOCUMENTS. Such other approvals, opinions, documents
or materials as the Agent or any Bank may request.
V.2 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each Bank to
make any Loan to be made by it (including its initial Loan) or to continue or
convert any Loan under Section 2.04 and the obligation of the Issuing Bank to
Issue any Letter of Credit (including the initial Letter of Credit) is subject
to the satisfaction of the following conditions precedent on the relevant
Borrowing Date or Issuance Date:
(a) NOTICE, APPLICATION. The Agent shall have received (with a
copy for each Bank) a Notice of Borrowing or, in the case of any Issuance of any
Letter of Credit, the Issuing Bank and the Agent shall have received an L/C
Application or L/C Amendment Application, as required under Section 3.02;
(b) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties in Article VI shall be true and correct on and as
of such Borrowing Date or Issuance Date with the same effect as if made on and
as of such Borrowing Date or Issuance Date (except to the extent such
representations and warranties expressly refer to an earlier date, in which case
they shall be true and correct as of such earlier date); and
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(c) NO EXISTING DEFAULT. No Default or Event of Default shall
exist or shall result from such Borrowing or continuation or conversion or
Issuance.
Each Notice of Borrowing, L/C Application or L/C Amendment Application submitted
by the Company hereunder shall constitute a representation and warranty by the
Company hereunder, as of the date of each such notice and as of each Borrowing
Date or Issuance Date, as applicable, that the conditions in this Section 5.02
are satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Bank that:
VI.1 CORPORATE EXISTENCE AND POWER. The Company and each of its
Subsidiaries:
(a) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its
business and to execute, deliver, and perform its obligations under the
Loan Documents;
(c) is duly qualified as a foreign corporation and is licensed
and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification or license; and
(d) is in compliance with all Requirements of Law; except, in
each case referred to in clause (c) or clause (d), to the extent that
the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
VI.2 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution, delivery
and performance by the Company and its Subsidiaries of this Agreement and each
other Loan Document to which such Person is party, have been duly authorized by
all necessary corporate action, and do not and will not:
(a) contravene the terms of any of such Person's Organization
Documents;
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(b) conflict with or result in any breach or contravention of,
or the creation of any Lien under, any document evidencing any material
Contractual Obligation to which such Person is a party or any order,
injunction, writ or decree of any Governmental Authority to which such
Person or its property is subject; or
(c) violate any material Requirement of Law.
VI.3 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Company or
any of its Subsidiaries of the Agreement or any other Loan Document.
VI.4 BINDING EFFECT. This Agreement and each other Loan Document to
which the Company or any of its Subsidiaries is a party constitute the legal,
valid and binding obligations of the Company and any of its Subsidiaries to the
extent it is a party thereto, enforceable against such Person in accordance with
their respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
VI.5 LITIGATION. There are no actions, suits, proceedings, claims or
disputes pending, or to the best knowledge of the Company, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, against the Company, or its Subsidiaries or any of their respective
properties which: (a) purport to affect or pertain to this Agreement or any
other Loan Document, or any of the transactions contemplated hereby or thereby;
or (b) if determined adversely to the Company or its Subsidiaries, would
reasonably be expected to have a Material Adverse Effect. No injunction, writ,
temporary restraining order or any order of any nature has been issued by any
court or other Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of this Agreement or any other Loan Document,
or directing that the transactions provided for herein or therein not be
consummated as herein or therein provided.
VI.6 NO DEFAULT. No Default or Event of Default exists or would result
from the incurring of any Obligations by the Company. As of the Closing Date,
neither the Company nor any Subsidiary is in default under or with respect to
any Contractual Obligation in any respect which, individually or together with
all such defaults, could reasonably be expected to have a Material Adverse
Effect, or that would, if such default had occurred after the Closing Date,
create an Event of Default under Section 9.01(e).
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VI.7 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law. Each
Plan which is intended to qualify under Section 401(a) of the Code has received
a favorable determination letter from the IRS and to the best knowledge of the
Company, nothing has occurred which would cause the loss of such qualification.
The Company and each ERISA Affiliate has made all required contributions to any
Plan subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of Company,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Company nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Company nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v)
neither the Company nor any ERISA Affiliate has engaged in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
VI.8 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the Loans are
to be used solely for the purposes set forth in and permitted by Section 7.12
and Section 8.07. Neither the Company nor any Subsidiary is generally engaged in
the business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock.
VI.9 TITLE TO PROPERTIES. The Company and each Subsidiary have good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, have a Material Adverse Effect. The property of the Company and
its Subsidiaries is subject to no Liens other than Permitted Liens.
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VI.10 TAXES. The Company and its Subsidiaries have filed all Federal
and other material tax returns and reports required to be filed, and have paid
all Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against the Company or
any Subsidiary.
VI.11 FINANCIAL CONDITION. (a) The (x) audited consolidated financial
statements of the Company and its Subsidiaries dated December 31, 1996, (y) the
unaudited consolidated financial statements of the Company and its Subsidiaries
dated June 30, 1997, and (z) the Annual Statement of each Insurance Subsidiary
dated December 31, 1996, in each case including the related consolidated
statements of income or operations, shareholders' equity and cash flows for the
period ended on that date:
(i) were prepared in accordance with GAAP or SAP, as
applicable, consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein (subject to ordinary, good
faith year end audit adjustments);
(ii) fairly present the financial condition of the
Company and its Subsidiaries as of the date thereof and results of
operations for the period covered thereby; and
(iii) except as specifically disclosed in SCHEDULE
6.11, show all material indebtedness and other liabilities, direct or
contingent, of the Company and its consolidated Subsidiaries as of the
date thereof, including liabilities for taxes, material commitments and
Contingent Obligations.
(b) Since December 31, 1996, there has been no Material Adverse
Effect.
VI.12 ENVIRONMENTAL MATTERS.
(a) The on-going operations of the Company and each of its
Subsidiaries comply in all material respects with all Environmental Laws, except
such non-compliance which would not (if enforced in accordance with applicable
law) result in liability in excess of $250,000 in the aggregate.
(b) The Company and each of its Subsidiaries have obtained all
licenses, permits, authorizations and registrations required under any
Environmental Law ("Environmental Permits") and necessary for their respective
ordinary course operations, all such Environmental Permits are in good standing,
and the Company and each of its Subsidiaries are in compliance with all material
terms and conditions of such Environmental Permits.
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(c) None of the Company, any of its Subsidiaries or any of their
respective present Property or operations, is subject to any outstanding written
order from or agreement with any Governmental Authority, nor subject to any
judicial or docketed administrative proceeding, respecting any Environmental
Law, Environmental Claim or Hazardous Material.
(d) There are no Hazardous Materials or other conditions or
circumstances existing with respect to any Property, or arising from operations
prior to the Closing Date, of the Company or any of its Subsidiaries that would
reasonably be expected to give rise to Environmental Claims with a potential
liability of the Company and its Subsidiaries in excess of $250,000 in the
aggregate for any such condition, circumstance or Property. In addition, (i)
neither the Company nor any of its Subsidiaries has any underground storage
tanks (x) that are not properly registered or permitted under applicable
Environmental Laws, or (y) that are leaking or disposing of Hazardous Materials
off-site, and (ii) the Company and its Subsidiaries have met all notification
requirements under Title III of CERCLA and all other Environmental Laws.
VI.13 COLLATERAL DOCUMENTS.
(a) The provisions of each Pledge Agreement are effective to
create, in favor of the Collateral Agent for the benefit of the Banks, a legal,
valid and enforceable first priority security interest in all of the collateral
described therein; and the Pledged Collateral was delivered to the Collateral
Agent or its nominee in accordance with the terms thereof. The Lien of each
Pledge Agreement constitutes a perfected, first priority security interest in
all right, title and interest of the Company or such Subsidiary, as the case may
be, in the Collateral described therein, prior and superior to all other Liens
and interests.
(b) All representations and warranties of the Company and any of
its Subsidiaries party thereto contained in the Collateral Documents are true
and correct.
VI.14 REGULATED ENTITIES. None of the Company nor any Subsidiary that
is not an Excluded Subsidiary, is an "Investment Company" within the meaning of
the Investment Company Act of 1940. None of the Company nor any Subsidiary is
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.
VI.15 NO BURDENSOME RESTRICTIONS. Neither the Company nor any
Subsidiary is a party to or bound by any Contractual Obligation, or subject to
any restriction in any Organization Document, or any
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Requirement of Law, which could reasonably be expected to have a Material
Adverse Effect.
VI.16 SOLVENCY. The Company is Solvent.
VI.17 LABOR RELATIONS. There are no strikes, lockouts or other labor
disputes against the Company or any of its Subsidiaries, or, to the best of the
Company's knowledge, threatened against or affecting the Company or any of its
Subsidiaries, and no significant unfair labor practice complaint is pending
against the Company or any of its Subsidiaries or, to the best knowledge of the
Company, threatened against any of them before any Governmental Authority which
could reasonably be expected to have a Material Adverse Effect.
VI.18 COPYRIGHTS, PATENTS, TRADEMARKS, ETC. The Company or its
Subsidiaries own or are licensed or otherwise have the right to use all of the
material patents, trademarks, service marks, trade names, copyrights,
contractual franchises, authorizations and other material rights that are
reasonably necessary for the operation of their respective businesses, 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 Subsidiary infringes upon any rights held by any
other Person, and no claim or litigation regarding any of the foregoing is
pending or threatened, and no material patent, invention, device, application,
principle or any statute, law, rule, regulation, standard or code is pending or,
to the knowledge of the Company, proposed, which, in any case, could reasonably
be expected to have a Material Adverse Effect.
VI.19 SUBSIDIARIES. As of the Closing Date, the Company has no
Subsidiaries other than those specifically disclosed in part (a) of SCHEDULE
6.19 hereto and has no equity investments in any other corporation or entity
other than those specifically disclosed in part (b) of SCHEDULE 6.19 and as
otherwise permitted pursuant to SECTION 8.04(f).
VI.20 BROKER'S; TRANSACTION FEES. Neither the Company nor any of its
Subsidiaries has any obligation to any Person in respect of any finder's,
broker's or investment banker's fee in connection with this Agreement or any
other Loan Document.
VI.21 INSURANCE. The properties of the Company and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Company, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Company or such Subsidiary operates.
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VI.22 SWAP OBLIGATIONS. Neither the Company nor any of its Subsidiaries
has incurred any outstanding obligations under any Swap Contracts, other than
Permitted Swap Obligations. The Company has undertaken its own independent
assessment of its consolidated assets, liabilities and commitments and has
considered appropriate means of mitigating and managing risks associated with
such matters and has not relied on any swap counterparty or any Affiliate of any
swap counterparty in determining whether to enter into any Swap Contract.
VI.23 FULL DISCLOSURE. None of the representations or warranties made
by the Company or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Company or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Company to the Banks prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
VI.24 INSURANCE LICENSES. SCHEDULE 6.24 hereto lists all of the
jurisdictions in which, as of the date of this Agreement, the Company and each
Insurance Subsidiary holds a License and is authorized to transact insurance
business. No License of the Company or any Insurance Subsidiary, the loss of
which could reasonably be expected to have a Material Adverse Effect, is the
subject of a proceeding for suspension or revocation. To the Company's
knowledge, there is no sustainable basis for such suspension or revocation, and
no such suspension or revocation has been threatened by any Governmental
Authority. SCHEDULE 6.24 also indicates the line or lines of insurance in which,
as of the date of this Agreement, the Company and each Insurance Subsidiary is
engaged in the states in which such Person is licensed to engage in any type of
insurance.
ARTICLE VII
AFFIRMATIVE COVENANTS
---------------------
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Banks waive compliance in writing:
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VII.1 FINANCIAL STATEMENTS. The Company shall deliver to the Agent, in
form and detail satisfactory to the Agent and the Majority Banks, with
sufficient copies for the Agent and each Bank:
(a) as soon as available, but not later than 90 days after the
end of each fiscal year (commencing with the fiscal year ended December
31, 1997), a copy of the audited consolidated and consolidating balance
sheet of the Company and its Subsidiaries as at the end of such year and
the related consolidated and consolidating statements of income or
operations and, with respect to the consolidated statements,
shareholders' equity and cash flows for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, and
accompanied by the opinion of KPMG Peat Marwick or another
nationally-recognized independent public accounting firm ("INDEPENDENT
AUDITOR") which report shall state that such consolidated financial
statements present fairly the financial position for the periods
indicated in conformity with GAAP applied on a basis consistent with
prior years. Such opinion shall not be qualified or limited because of a
restricted or limited examination by the Independent Auditor of any
material portion of the Company's or any Subsidiary's records;
(b) as soon as available, but not later than 45 days after the
end of each of the first three fiscal quarters of each fiscal year
(commencing with the fiscal quarter ended September 30, 1997), a copy of
the unaudited consolidated and consolidating balance sheet of the
Company and its Subsidiaries as of the end of such quarter and the
related consolidated and consolidating statements of income and, with
respect to the consolidated statements, shareholders' equity and cash
flows for the period commencing on the first day and ending on the last
day of such quarter, and certified by a Responsible Officer as fairly
presenting, in accordance with GAAP (subject to ordinary, good faith
year-end audit adjustments), the financial position and the results of
operations of the Company and the Subsidiaries;
(c) (i) as soon as available, but not later than 90 days after
the end of each fiscal year of each Insurance Subsidiary, a copy of the
Annual Statement of such Insurance Subsidiary, setting forth in each
case in comparative form the figures for the previous fiscal year, and
(ii) as soon as available, but not later than 180 days after the end of
each fiscal year of each Insurance Subsidiary, a copy of the audited
financial statements of such Insurance Subsidiary, setting forth in each
case in comparative form the figures of the previous fiscal year,
accompanied by the opinion of an Independent Auditor, which report shall
state that such financial statements present fairly the financial
position for the periods indicated in
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conformity with SAP applied on a basis consistent with prior years.
Such opinion shall not be qualified or limited because of a restricted
or limited examination by the Independent Auditor of any material
portion of any Subsidiary's records; and
(d) as soon as available, but not later than the earlier of (i)
ten days after the regulatory filing date or (ii) 50 days after the end
of each of the first three fiscal quarters of each fiscal year of each
Insurance Subsidiary, a copy of the Quarterly Statement of such
Insurance Subsidiary certified by a Responsible Officer of such
Insurance Subsidiary as fairly presenting, in accordance with SAP
(subject to ordinary, good faith year-end audit adjustments), the
financial position and the results of operations of such Insurance
Subsidiary.
VII.2 CERTIFICATES; OTHER INFORMATION. The Company shall furnish to the
Agent, with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial statements
referred to in SECTION 7.01(a), a certificate of the Independent Auditor
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in
such certificate;
(b) concurrently with the delivery of the financial statements
referred to in SECTIONS 7.01(a) and (b), a Compliance Certificate
executed by a Responsible Officer;
(c) promptly, copies of all financial statements and reports
that the Company sends to its shareholders, and copies of all financial
statements and regular, periodical or special reports (including Forms
10K, 10Q and 8K) that the Company or any Subsidiary may make to, or file
with, the SEC and copies of all registration statements and annual,
quarterly, monthly or other regular reports which the Company or any of
its Subsidiaries files with the NAIC or any insurance commission or
department or analogous Governmental Authority (including without
limitation, any filing made by the Company or any Subsidiary pursuant to
any insurance holding company act or related rules or regulations), but
excluding routine or non-material filings with the NAIC, any insurance
commissioner or department or analogous Governmental Authority;
(d) as soon as available, but in any event not later than the
30th day prior to the end of each fiscal year, a copy of the plan and
forecast (including a projected consolidated and consolidating balance
sheet, income statement and cash flow statement) of the Company and its
Subsidiaries for the next fiscal year;
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(e) promptly after the receipt thereof, copies of any actuarial
reports or opinions prepared with respect to any Insurance Subsidiary;
(f) Promptly and in any event within ten days after (i) learning
thereof, notification of any changes after the date hereof in the rating
given by A.M. Best & Co. in respect of any Insurance Subsidiary and (ii)
receipt thereof, copies of any ratings analysis by A.M. Best & Co.
relating to any Insurance Subsidiary; and
(g) promptly, such additional information (including, without
limitation, the annual Best's Advance Report Service report prepared
with respect to each Insurance Subsidiary rated by A.M. Best & Co.)
regarding the business, financial or corporate affairs of the Company or
any Subsidiary as the Agent, at the request of any Bank, may from time
to time request.
VII.3 NOTICES. The Company shall promptly notify the Agent and each
Bank:
(a) of the occurrence of any Default or Event of Default;
(b) of any matter that has resulted or may reasonably be
expected to result in a Material Adverse Effect, including (i) breach or
non-performance of, or any default under, a Contractual Obligation of
the Company or any Subsidiary; (ii) any dispute, litigation,
investigation, proceeding or suspension between the Company or any
Subsidiary and any Governmental Authority; or (iii) the commencement of,
or any material development in, any litigation or proceeding affecting
the Company or any Subsidiary; including pursuant to any applicable
Environmental Laws;
(c) of the occurrence of any of the following events affecting
the Company or any ERISA Affiliate (but in no event more than 10 days
after such event), and deliver to the Agent and each Bank a copy of any
notice with respect to such event that is filed with a Governmental
Authority and any notice delivered by a Governmental Authority to the
Company or any ERISA Affiliate with respect to such event:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension
Liability of any Pension Plan;
(iii) the adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the Code by the
Company or any ERISA Affiliate; or
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(iv) the adoption of any amendment to a Plan subject to
Section 412 of the Code, if such amendment results in a material
increase in contributions or Unfunded Pension Liability.
(d) of any material change in accounting policies or financial
reporting practices by the Company or any of its consolidated
Subsidiaries;
(e) upon the request from time to time of the Agent, the Swap
Termination Values, together with a description of the method by which
such values were determined, relating to any then-outstanding Swap
Contracts to which the Company or any of its Subsidiaries is party;
(f) of the receipt of any notice from any Governmental Authority
of the expiration without renewal, revocation or suspension of, or the
institution of any proceedings to revoke or suspend, any License now or
hereafter held by any Insurance Subsidiary which is required to conduct
insurance business in compliance with all applicable laws and
regulations;
(g) of the receipt of any notice from any Governmental Authority
of the institution of any disciplinary proceedings against or in respect
of any Insurance Subsidiary, or the issuance of any order, the taking of
any action or any request for an extraordinary audit for cause by any
Governmental Authority; and
(h) of any judicial or administrative order limiting or
controlling the insurance business of any Insurance Subsidiary (and not
the insurance business generally) which has been issued or adopted.
Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating what action the Company or any affected
Subsidiary proposes to take with respect thereto and at what time. Each notice
under SECTION 7.03(a) shall describe with particularity any and all clauses or
provisions of this Agreement or other Loan Document that have been (or
foreseeably will be) breached or violated.
VII.4 PRESERVATION OF CORPORATE EXISTENCE, ETC. The Company shall, and
shall cause each Subsidiary to:
(a) preserve and maintain in full force and effect its corporate
existence and good standing under the laws of its state or jurisdiction
of incorporation;
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(b) preserve and maintain in full force and effect all material
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business,
except in connection with transactions permitted by Section 8.03 and
sales of assets permitted by Section 8.02;
(c) use reasonable efforts, in the ordinary course of business,
to preserve its business organization and goodwill;
(d) preserve or renew all of its registered patents, trademarks,
trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect; and
(e) with respect to each Insurance Subsidiary, maintain its
domicile in the state it is domiciled on the Closing Date; PROVIDED,
HOWEVER that so long as (x) no Default or Event of Default shall have
occurred and be continuing both before and after giving effect to such
transaction and (y) such transaction will not result in a Material
Adverse Effect, an Insurance Subsidiary may change its state of domicile
to a state having investment, dividend, regulatory and statutory
provisions applicable to insurance companies domiciled therein
substantially similar to those of the State of Illinois and upon 30 days
prior written notice to the Agent and the Banks.
VII.5 MAINTENANCE OF PROPERTY. The Company shall maintain, and shall
cause each Subsidiary to maintain, and preserve all its property which is used
or useful in its business in good working order and condition, ordinary wear and
tear excepted and make all necessary repairs thereto and renewals and
replacements thereof.
VII.6 INSURANCE. The Company shall maintain, and shall cause each
Subsidiary to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons.
VII.7 PAYMENT OF OBLIGATIONS. The Company shall, and shall cause each
Subsidiary to, pay and discharge as the same shall become due and payable, all
their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being
contested in good faith by appropriate proceedings and adequate reserves
in accordance with GAAP are being maintained by the Company or such
Subsidiary;
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(b) all lawful claims which, if unpaid, would by law become a
Lien (other than a Permitted Lien) upon its property; and
(c) all indebtedness, as and when due and payable, but subject
to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness, unless the payment of such indebtedness is
being contested in good faith by appropriate proceedings and adequate
reserves in accordance with GAAP are being maintained by the Company or
such Subsidiary.
VII.8 COMPLIANCE WITH LAWS. The Company shall comply, and shall cause
each Subsidiary to comply, in all material respects with all Requirements of Law
of any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
VII.9 COMPLIANCE WITH ERISA. The Company shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification unless such Plan is terminated; and (c) make
all required contributions to any Plan subject to Section 412 of the Code.
VII.10 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Company shall
maintain and shall cause each Subsidiary to maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP or SAP,
as applicable, consistently applied shall be made of all financial transactions
and matters involving the assets and business of the Company and such
Subsidiary. The Company shall permit, and shall cause each Subsidiary to permit,
representatives and independent contractors of the Agent or any Bank to visit
and inspect any of their respective properties, to examine their respective
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective directors, officers, and independent public accountants, all at
the expense of the Company and at such reasonable times during normal business
hours and as often as may be reasonably desired, upon reasonable advance notice
to the Company; PROVIDED, HOWEVER, when an Event of Default exists the Agent or
any Bank may do any of the foregoing at the expense of the Company at any time
without advance notice.
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72
VII.11 ENVIRONMENTAL LAWS. The Company shall, and shall cause each
Subsidiary to, conduct its operations and keep and maintain its property in
compliance with all Environmental Laws.
VII.12 USE OF PROCEEDS. The Company shall use the proceeds of the
Revolving Loans for working capital and other general corporate purposes,
including Acquisitions other than for the purpose of financing a hostile
Acquisition, and the payment of fees and expenses relating thereto, in each case
not in contravention of any Requirement of Law or of any Loan Document.
VII.13 SOLVENCY. The Company shall at all times be Solvent.
VII.14 FURTHER ASSURANCES.
(a) The Company shall ensure that all written information,
exhibits and reports furnished to the Agent or the Banks pursuant to the Loan
Documents do not and will not contain any untrue statement of a material fact
and do not and will not omit to state any material fact or any fact necessary to
make the statements contained therein not materially misleading in light of the
circumstances in which made, and will promptly disclose to the Agent and the
Banks and correct any defect or error that may be discovered therein or in any
Loan Document or in the execution, acknowledgment or recordation thereof.
(b) Promptly upon request the Agent or the Majority Banks, the
Company shall (and shall cause any of its Subsidiaries to) do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register, any and all such further acts, deeds, conveyances, security
agreements, mortgages, assignments, estoppel certificates, financing statements
and continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments the Agent or such
Banks, as the case may be, may reasonably require from time to time in order (i)
to carry out more effectively the purposes of this Agreement or any other Loan
Document, (ii) to subject any of the properties, rights or interests covered by
any of the Collateral Documents to the Liens created by any of the Collateral
Documents, (iii) to perfect and maintain the validity, effectiveness and
priority of any of the Collateral Documents and the Liens intended to be created
thereby, and (iv) to better assure, convey, grant, assign, transfer, preserve,
protect and confirm to the Collateral Agent and Banks the rights granted or now
or hereafter intended to be granted to the Collateral Agent and the Banks under
any Loan Document or under any other document executed in connection therewith.
ARTICLE VIII
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NEGATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Banks waive compliance in writing:
VIII.1 LIMITATION ON LIENS. The Company shall not, and shall not suffer
or permit any Subsidiary to, directly or indirectly, make, create, incur, assume
or suffer to exist any Lien upon or with respect to any part of its property,
whether now owned or hereafter acquired, other than the following ("PERMITTED
LIENS"):
(a) any Lien (other than as described in SECTION 8.01(m))
existing on property of the Company or any Subsidiary on the Closing
Date and set forth in SCHEDULE 8.01 securing Indebtedness outstanding on
such date and described therein (other than Indebtedness in a principal
amount not exceeding $50,000 in the aggregate, it being understood and
agreed that any such Lien shall be permitted to exist pursuant to this
clause (a) notwithstanding the absence thereof on SCHEDULE 8.01);
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental
charges which are not delinquent or remain payable without penalty, or
to the extent that non-payment thereof is permitted by Section 7.07,
provided that no notice of lien has been filed or recorded under the
Code;
(d) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the
ordinary course of business which are not delinquent or remain payable
without penalty or which are being contested in good faith and by
appropriate proceedings, which proceedings have the effect of preventing
the forfeiture or sale of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting of
pledges or deposits required in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
social security legislation;
(f) Liens on the property of the Company or its Subsidiaries
securing (i) the non-delinquent performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, (ii)
contingent obligations on surety and appeal bonds, and (iii) other
non-delinquent obligations of a like nature; in each case, incurred in
the ordinary course of
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business, provided all such Liens in the aggregate would not (even if
enforced) cause a Material Adverse Effect;
(g) Liens consisting of judgment or judicial attachment liens,
provided that the enforcement of such Liens is effectively stayed and
all such liens in the aggregate at any time outstanding for the Company
and its Subsidiaries do not exceed $250,000;
(h) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not interfere
with the ordinary conduct of the businesses of the Company and its
Subsidiaries;
(i) Liens on assets of corporations which become Subsidiaries
after the date of this Agreement, PROVIDED, HOWEVER, that such Liens
existed at the time the respective corporations became Subsidiaries and
were not created in anticipation thereof and do not in the aggregate at
any time outstanding exceed $2,000,000;
(j) purchase money security interests on any property acquired
or held by the Company or its Subsidiaries in the ordinary course of
business, securing Indebtedness incurred or assumed for the purpose of
financing all or any part of the cost of acquiring such property;
PROVIDED THAT (i) any such Lien attaches to such property concurrently
with or within 20 days after the acquisition thereof, (ii) such Lien
attaches solely to the property so acquired in such transaction and
(iii) the principal amount of the Indebtedness secured by any and all
such purchase money security interests shall not at any time exceed,
together with Indebtedness permitted under Section 8.05(d), $2,000,000;
(k) Liens securing Capital Lease Obligations on assets subject
to such Capital Leases, provided that such Capital Leases are otherwise
permitted under Section 8.10(c);
(l) Liens arising solely by virtue of any statutory or common
law provision relating to banker's liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained
with a creditor depository institution; PROVIDED THAT (i) such deposit
account is not a dedicated cash collateral account and is not subject to
restrictions against access by the Company in excess of those set forth
by regulations promulgated by the FRB, and (ii) such deposit account is
not intended by the Company or any Subsidiary to provide collateral to
the depository institution;
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(m) Liens consisting of pledges of cash collateral or government
securities to secure on a xxxx-to-market basis Permitted Swap
Obligations only, provided that (i) the counterparty to any Swap
Contract relating to such Permitted Swap Obligations is under a similar
requirement to deliver similar collateral from time to time to the
Company or the Subsidiary party thereto on a xxxx-to-market basis, and
(ii) the aggregate value of such collateral so pledged by the Company
and the Subsidiaries together in favor of any counterparty does not at
any time exceed $1,000,000;
(n) Liens consisting of deposits made by any Insurance
Subsidiary with the insurance regulatory authority in its jurisdiction
of formation or as otherwise required by a Governmental Authority
pursuant to applicable insurance laws, or other statutory Liens or Liens
or claims imposed or required by applicable insurance law or regulation
against the assets of such Insurance Subsidiary, in each case in favor
of all policyholders of such Insurance Subsidiary and in the ordinary
course of such Insurance Subsidiary's business;
(o) Liens incurred in the ordinary course of business of an
Insurance Subsidiary with respect to reinsurance transactions or any
premium trust account or similar account; and
(p) Liens comprised of cash or Cash Equivalents with respect to
the Company's reimbursement obligations under Existing Letters of
Credit.
VIII.2 DISPOSITION OF ASSETS. The Company shall not, and shall not
suffer or permit any Subsidiary to, directly or indirectly, sell, assign, lease,
convey, transfer or otherwise dispose of (whether in one or a series of
transactions) any property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the foregoing,
except:
(a) dispositions of inventory, or used, worn-out or surplus
equipment (including, without limitation, demonstration or pilot
plants), all in the ordinary course of business;
(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied
to the purchase price of such replacement equipment; and
(c) dispositions of Investments and insurance contracts by any
Insurance Subsidiary in the ordinary course of business; and
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(d) dispositions not otherwise permitted hereunder which are
made for fair market value; PROVIDED that (i) at the time of any
disposition, no Event of Default shall exist or shall result from such
disposition, (ii) not less than 80% of the aggregate sales price from
such disposition shall be paid in cash, and (iii) the aggregate value of
all assets so sold by the Company and its Subsidiaries, together, shall
not exceed (x) 5% of the net tangible assets of the Company and its
Subsidiaries on a consolidated basis during any twelve month period with
net tangible assets to be measured as of the beginning of such period,
and (y) 10% of the net tangible assets of the Company and its
Subsidiaries on a consolidated basis during the term of this Agreement,
with net tangible assets to be measured as of the Closing Date.
VIII.3 CONSOLIDATIONS AND MERGERS. The Company shall not, and shall not
suffer or permit any Subsidiary to, merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions all or substantially all of its assets whether now owned
or hereafter acquired) to or in favor of any Person, except:
(a) any Subsidiary (other than an Excluded Subsidiary) may merge
with the Company (PROVIDED that the Company shall be the continuing or
surviving corporation), or with any one or more Subsidiaries (other than
an Excluded Subsidiary), PROVIDED that if any transaction shall be
between a Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned
Subsidiary shall be the continuing or surviving corporation it being
understood and agreed that, notwithstanding the prohibition contained in
this clause, an Excluded Subsidiary shall be permitted to constitute
part of a transaction permitted by this clause in the event that such
transaction would remove or eliminate the condition that caused such
Excluded Subsidiary to be an Excluded Subsidiary;
(b) any Subsidiary (other than an Excluded Subsidiary) may sell
all or substantially all of its assets (upon voluntary liquidation or
otherwise), to the Company or another Wholly-Owned Subsidiary (other
than an Excluded Subsidiary) it being understood and agreed that,
notwithstanding the prohibition contained in this clause, an Excluded
Subsidiary shall be permitted to constitute part of a transaction
permitted by this clause in the event that such transaction would remove
or eliminate the condition that caused such Excluded Subsidiary to be an
Excluded Subsidiary;
(c) any Subsidiary may merge with or consolidate into any Person
(other than an Excluded Subsidiary), PROVIDED that (i) at the time of
such merger or consolidation, no Default or
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Event of Default shall exist or result after giving effect to the
consummation of such merger or consolidation and (ii) either (x) such
Subsidiary shall be the continuing or surviving corporation as a
Wholly-Owned Subsidiary of the Company or (y) such Person shall become
a Subsidiary of the Company as a result thereto; it being understood
and agreed that, notwithstanding the prohibition contained in this
clause, an Excluded Subsidiary shall be permitted to constitute part of
a transaction permitted by this clause in the event that such
transaction would remove or eliminate the condition that caused such
Excluded Subsidiary to be an Excluded Subsidiary; and
(d) any Excluded Subsidiary may merge with or consolidate into
any one or more Excluded Subsidiaries.
VIII.4 LOANS AND INVESTMENTS. The Company shall not purchase or
acquire, or suffer or permit any Subsidiary to purchase or acquire, or make any
commitment therefor, any capital stock, equity interest, or any obligations or
other securities of, or any interest in, any Person, or make or commit to make
any Acquisitions, or make or commit to make any advance, loan, extension of
credit or capital contribution to or any other investment in, any Person
including any Affiliate of the Company (together, "INVESTMENTS"), except for:
(a) Investments held by the Company or Subsidiary in the form of
cash and/or Cash Equivalents;
(b) extensions of credit in the nature of accounts receivable or
notes receivable arising from the sale or lease of goods or services in
the ordinary course of business;
(c) extensions of credit by the Company to any Guarantor or by
any Guarantor to another Guarantor or the Company, PROVIDED, that any
extension of credit pursuant to this clause (c) shall be evidenced by a
promissory note, in form and substance acceptable to the Agent, and such
promissory note shall be delivered to the Collateral Agent pursuant to
the relevant Pledge Agreement;
(d) Investments, subject to Section 8.09, incurred in order to
consummate Acquisitions otherwise permitted herein, PROVIDED that (i)
any such Acquisition the aggregate consideration of which exceeds the
relevant Permitted Acquisition Threshold shall not be permitted without
the prior written approval of the Majority Banks, (ii) no Default or
Event of Default is in existence both before and after giving effect to
such Acquisition, (iii) such Acquisition is undertaken in accordance
with all applicable Requirements of Law, (iv) the prior, effective
written consent or approval to such Acquisition of the board of
directors or equivalent governing body of the acquiree is obtained, and
(v) in the case
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of the Acquisition of the capital stock of any Person, such Acquisition
shall be for 100% of the capital stock of such Person;
(e) Investments constituting Permitted Swap Obligations or
payments or advances under Swap Contracts relating to Permitted Swap
Obligations;
(f) Investments (other than pursuant to Section 8.04(c)) made by
the Company or any Guarantor after the date of this Agreement in any
Guarantor;
(g) Investments by an Insurance Subsidiary to the extent
permitted by applicable insurance laws, rules and regulations governing
such Insurance Subsidiary;
(h) other Investments existing as of the Closing Date and listed
on SCHEDULE 8.04;
(i) Investments of a Person that becomes a Subsidiary after the
date of this Agreement as a result of an Acquisition so long as (x) such
Investment existed at the time such Person became a Subsidiary and was
not created in anticipation thereof and (y) such Investment would
otherwise be permitted pursuant to this SECTION 8.04;
(j) Investments in Joint Ventures to the extent permitted by
SECTION 8.09; and
(k) Investments made by the Company or any of its Insurance
Subsidiaries in any Insurance Subsidiary; PROVIDED, that the aggregate
amount of all such Investments made after the date of this Agreement
shall not exceed an amount equal to 10% of the aggregate capital and
surplus for all Insurance Subsidiaries as determined by reference to the
most recent Annual Statement delivered pursuant to SECTION 7.01(c).
VIII.5 LIMITATION ON INDEBTEDNESS. The Company shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume, suffer to exist, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations permitted
pursuant to Section 8.08;
(c) Indebtedness existing on the Closing Date and set forth in
SCHEDULE 8.05;
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(d) other Indebtedness in an aggregate amount outstanding not to
exceed $2,000,000 (including Indebtedness secured by Liens permitted by
Section 8.01(i) and (j));
(e) Indebtedness incurred in connection with leases permitted
pursuant to Section 8.10;
(f) Indebtedness permitted to be incurred pursuant to SECTION
8.04(C);
(g) unsecured Indebtedness under notes to Sellers containing
terms satisfactory to the Agent and fully subordinated to the Loans and
the other Obligations on term satisfactory to the Agent (any such
Indebtedness, "PERMITTED SELLER DEBT");
(h) Indebtedness (other than for borrowed money) of a Person
that becomes a Subsidiary after the date of this Agreement as the result
of an Acquisition if the Company would be in compliance on a PRO FORMA
basis with Sections 8.16 and 8.17, assuming that such Acquisition and
the Indebtedness incurred in connection therewith had occurred and been
incurred, respectively, on the day which is twelve months prior to the
consummation of such Acquisition, PROVIDED that (x) such Indebtedness
existed at the time such Person became a Subsidiary and was not created
in anticipation thereof and (y) such Indebtedness is not guaranteed in
any respect by the Company or any other Subsidiary; and
(i) Existing Letters of Credit, excluding any replacements,
renewals or extensions thereof.
VIII.6 TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall
not suffer or permit any Subsidiary to, enter into any transaction with any
Affiliate of the Company (other than a Wholly-Owned Subsidiary), except upon
fair and reasonable terms no less favorable to the Company or such Subsidiary
than would obtain in a comparable arm's-length transaction with a Person not an
Affiliate of the Company or such Subsidiary.
VIII.7 USE OF PROCEEDS. The Company shall not, and shall not suffer or
permit any Subsidiary to, use any portion of the Loan proceeds or any Letter of
Credit, directly or indirectly, (i) to purchase or carry Margin Stock, (ii) to
repay or otherwise refinance indebtedness of the Company or others incurred to
purchase or carry Margin Stock, (iii) to extend credit for the purpose of
purchasing or carrying any Margin Stock, or (iv) to acquire any security in any
transaction that is subject to Section 13 or 14 of the Exchange Act.
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VIII.8 CONTINGENT OBLIGATIONS. The Company shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume or suffer to exist any
Contingent Obligations except:
(a) endorsements for collection or deposit in the ordinary
course of business;
(b) Permitted Swap Obligations;
(c) Contingent Obligations of the Company and its Subsidiaries
existing as of the Closing Date and listed in SCHEDULE 8.08;
(d) Contingent Obligations with respect to Surety Instruments
incurred in the ordinary course of business;
(e) Contingent Obligations of a Person that becomes a Subsidiary
after the date of this Agreement as a result of an Acquisition so long
as such Contingent Obligation existed at the time such Person became a
Subsidiary and was not created in anticipation thereof.
VIII.9 JOINT VENTURES. The Company shall not, and shall not suffer or
permit any Subsidiary to enter into any Joint Venture; PROVIDED, HOWEVER that
the Company and its Wholly-Owned Subsidiaries (other than Excluded Subsidiaries)
shall be permitted to make Investments in Joint Ventures so long as (x) no
Default or Event of Default has occurred and is continuing or would result
therefrom, (y) after giving effect to any such Investment, the Company and/or a
Wholly-Owned Subsidiary of the Company shall control 51% or more of the
interests in such Joint Venture and (z) after giving effect to any such
Investment, the aggregate net amount expended by the Company and/or any
Wholly-Owned Subsidiary of the Company in connection with all such Investments
made after the date of the Agreement shall not at any time exceed $2,000,000.
VIII.10 LEASE OBLIGATIONS. The Company shall not, and shall not suffer
or permit any Subsidiary to, create or suffer to exist any obligations for the
payment of rent for any property under lease or agreement to lease, except for:
(a) leases of the Company and of Subsidiaries in existence on
the Closing Date and any renewal, extension or refinancing thereof;
(b) operating leases entered into by the Company or any
Subsidiary after the Closing Date in the ordinary course of business;
PROVIDED that the aggregate annual rental payments for all such
operating leases shall not exceed in any fiscal year $2,000,000; and
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(c) Capital Leases other than those permitted under clause (a)
of this Section, entered into by the Company or any Subsidiary after the
Closing Date to finance the acquisition of equipment; PROVIDED that the
aggregate Capital Lease Obligations for all such Capital Leases shall
not at any time exceed $2,000,000.
VIII.11 RESTRICTED PAYMENTS. The Company shall not, and shall not
suffer or permit any Subsidiary to, declare or make any dividend payment or
other distribution of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of its capital stock, or
purchase, redeem or otherwise acquire for value any shares of its capital stock
or any warrants, rights or options to acquire such shares, now or hereafter
outstanding, except that any Subsidiary may declare and make dividend payments
or other distributions to the Company or a Wholly-Owned Subsidiary of the
Company.
VIII.12 ERISA. The Company shall not, and shall not suffer or permit
any of its Subsidiaries to, (i) terminate any Plan subject to Title IV of ERISA
so as to result in any material (in the opinion of the Majority Banks) liability
to the Company or any ERISA Affiliate, (ii) permit to exist any ERISA Event or
any other event or condition, which presents the risk of a material (in the
opinion of the Majority Banks) liability to any member of the Controlled Group,
(iii) make a complete or partial withdrawal (within the meaning of ERISA Section
4201) from any Multiemployer Plan so as to result in any material (in the
opinion of the Majority Banks) liability to the Company or any ERISA Affiliate,
(iv) enter into any new Plan or modify any existing Plan so as to increase its
obligations thereunder which could result in any material (in the opinion of the
Majority Banks) liability to any member of the Controlled Group, or (v) permit
the present value of all nonforfeitable accrued benefits under any Plan (using
the actuarial assumptions utilized by the PBGC upon termination of a Plan)
materially (in the opinion of the Majority Banks) to exceed the fair market
value of Plan assets allocable to such benefits, all determined as of the most
recent valuation date for each such Plan.
VIII.13 CHANGE IN BUSINESS. The Company shall not, and shall not suffer
or permit any Subsidiary to, engage in any material line of business
substantially different from those lines of business carried on by the Company
and its Subsidiaries taken as whole on the date hereof.
VIII.14 ACCOUNTING CHANGES. The Company shall not, and shall not suffer
or permit any Subsidiary to, make any significant change in accounting treatment
or reporting practices, except as required by GAAP or SAP, as the case may be,
or change the fiscal year of the Company or of any Subsidiary.
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VIII.15 MINIMUM NET WORTH. The Company shall not permit its
consolidated Net Worth at any time to be less than an amount equal to the sum of
(a) $88,000,000 PLUS (b) 70% of the Company's positive Net Income, if any, for
each fiscal quarter ending after the date hereof and prior to the date of
determination PLUS (c) an amount equal to 100% of the cash and non-cash proceeds
of any equity securities issued by the Company after the date of this Agreement.
VIII.16 LEVERAGE RATIO. The Company shall not permit, at any time
during a period listed below, its Leverage Ratio at such time for the twelve
month period (taken as one accounting period) last ended prior to the date of
determination, to be greater than the ratio set forth below opposite the
respective period in which the determination is being made:
PERIOD RATIO
------ -----
From and including the Closing Date 2.75:1.00
to but excluding the last day of the
fiscal quarter ended on December 31, 1998
Thereafter, from and including the last day of the 2.50:1.00
fiscal quarter ended on December 31, 1998 to but
excluding the last day of the fiscal quarter ended
on December 31, 1999
Thereafter 2.25:1.0
VIII.17 INTEREST COVERAGE RATIO. The Company shall not permit, at any time
during a period listed below, its Interest Coverage Ratio at such time for the
twelve month period (taken as one accounting period) last ended prior to the
date of determination, to be less than the ratio set forth below opposite the
respective period in which the determination is being made:
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PERIOD RATIO
------ -----
From and including the Closing Date 4.50:1.00
to but excluding the last day of the fiscal
quarter ended on December 31, 1998
Fromand including the last day of the fiscal 4.75:1.00
quarter ended on December 31, 1998 to but excluding the
last day of the fiscal quarter ended on December 31, 1999
Thereafter 5.00:1.00
VIII.18 STATUTORY SURPLUS. The Company shall not at any time after the date
of this Agreement permit Statutory Surplus of Century Surety Company to be an
amount less than $22,000,000.
VIII.19 RISK-BASED CAPITAL. The Company shall cause Century Surety Company,
as of the end of each fiscal year, to maintain a ratio of (a) Total Adjusted
Capital (as defined in the Risk-Based Capital Act or in the rules and procedures
prescribed from time to time by the NAIC with respect thereto) to (b) the
Company Action Level RBC (as defined in the Risk-Based Capital Act or in the
rules and procedures prescribed from time to time by the NAIC with respect
thereto) of at least one hundred fifty percent (150%).
ARTICLE IX
EVENTS OF DEFAULT
IX.1 EVENT OF DEFAULT. Any of the following shall constitute an "EVENT OF
DEFAULT":
(a) NON-PAYMENT. The Company fails to pay, (i) when and as
required to be paid herein, any amount of principal of any Loan or of any L/C
Obligation, or (ii) within five days after the same becomes due, any interest,
fee or any other amount payable hereunder or under any other Loan Document; or
(b) REPRESENTATION OR WARRANTY. Any representation or
warranty by the Company or any Subsidiary made or deemed made herein, in any
other Loan Document, or which is contained in any certificate, document or
financial or other statement by the Company, any Subsidiary, or any Responsible
Officer, furnished at any time under this Agreement, or in or under any other
Loan
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Document, is incorrect in any material respect on or as of the date made or
deemed made; or
(c) SPECIFIC DEFAULTS. The Company fails to perform or
observe any term, covenant or agreement contained in any of Section 7.01, 7.02,
7.03, 7.08 or 7.09 or in Article VIII; or
(d) OTHER DEFAULTS. The Company or any Subsidiary party
thereto fails to perform or observe any other term or covenant contained in this
Agreement or any other Loan Document, and such default shall continue unremedied
for a period of 30 days after the earlier of (i) the date upon which a
Responsible Officer knew or reasonably should have known of such failure or (ii)
the date upon which written notice thereof is given to the Company by the Agent
or any Bank; or
(e) CROSS-DEFAULT. (i) The Company or any Subsidiary (A)
fails to make any payment in respect of any Indebtedness or Contingent
Obligation (other than in respect of Swap Contracts), having an aggregate
principal amount (including undrawn committed or available amounts and including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $1,000,000 when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) and such failure
continues after the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure; or (B) fails to perform or
observe any other condition or covenant, or any other event shall occur or
condition exist with respect to the obligations of the Company or such
Subsidiary, under any agreement or instrument relating to any Indebtedness or
Contingent Obligation of more than $1,000,000, and such failure continues after
the applicable grace or notice period, if any, specified in the relevant
document on the date of such failure if the effect of such failure, event or
condition is to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause such
Indebtedness to be declared to be due and payable prior to its stated maturity,
or such Contingent Obligation to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (1) any event
of default under such Swap Contract as to which the Company or any Subsidiary is
the Defaulting Party (as defined in such Swap Contract) or (2) any Termination
Event (as so defined) as to which the Company or any Subsidiary is an Affected
Party (as so defined), and, in either event, the Swap Termination Value owed by
the Company or such Subsidiary as a result thereof is greater than $1,000,000;
or
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(f) INSOLVENCY; VOLUNTARY PROCEEDINGS. The Company or any
Subsidiary (i) ceases or fails to be solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise; (ii)
voluntarily ceases to conduct its business in the ordinary course; (iii)
commences any Insolvency Proceeding with respect to itself; or (iv) takes any
action to effectuate or authorize any of the foregoing; or
(g) INVOLUNTARY PROCEEDINGS. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Company or any Subsidiary, or any
writ, judgment, warrant of attachment, execution or similar process, is issued
or levied against a substantial part of the Company's or any Subsidiary's
properties, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement, filing or
levy; (ii) the Company or any Subsidiary admits the material allegations of a
petition against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or
(iii) the Company or any Subsidiary acquiesces in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar Person for itself or a substantial portion of its
property or business; or
(h) ERISA. (i) An ERISA Event shall occur with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Company under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
$250,000 the aggregate amount of Unfunded Pension Liability among all Pension
Plans at any time exceeds $250,000; or (iii) the Company or any ERISA Affiliate
shall fail to pay when due, after the expiration of any applicable grace period,
any installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$250,000; or
(i) MONETARY JUDGMENTS. One or more non-interlocutory
judgments, non-interlocutory orders, decrees or arbitration awards is entered
against the Company or any Subsidiary involving in the aggregate a liability (to
the extent not covered by independent third-party insurance or reinsurance as to
which the insurer does not dispute coverage) as to any single or related series
of transactions, incidents or conditions, of $500,000 or more, and the same
shall remain unsatisfied, unvacated and unstayed pending appeal for a period of
30 days after the entry thereof; or
(j) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order
or decree is entered against the Company or any
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Subsidiary which does or would reasonably be expected to have a Material Adverse
Effect, and there shall be any period of 10 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(k) COLLATERAL. (i) any provision of any Collateral Document
shall for any reason cease to be valid and binding on or enforceable against the
Company or any Subsidiary of the Company party thereto or the Company or any
Subsidiary of the Company shall so state in writing or bring an action to limit
its obligations or liabilities thereunder; or (ii) any Collateral Document shall
for any reason (other than pursuant to the terms thereof or as a result of the
failure of the Collateral Agent to file appropriate continuation statements or
to take other required actions) cease to create a valid security interest in the
Collateral purported to be covered thereby or such security interest shall for
any reason cease to be a perfected and first priority security interest subject
only to Permitted Liens; or
(l) CHANGE OF CONTROL. there occurs any Change of Control; or
(m) GUARANTOR DEFAULTS. any Guarantor fails in any material
respect to perform or observe any term, covenant or agreement in the Guaranty or
the Guaranty is for any reason partially (including with respect to future
advances) or wholly revoked or invalidated, or otherwise ceases to be in full
force and effect, or any Guarantor or any other Person contests in any manner
the validity or enforceability thereof or denies that it has any further
liability or obligation thereunder; or any event described at clauses (f) or (g)
of this Section occurs with respect to such Guarantor; or
(n) any License of any Insurance Subsidiary (a) shall be
revoked by the Governmental Authority which issued such License, or any action
(administrative or judicial) to revoke such License shall have been commenced
against such Insurance Subsidiary and shall not have been dismissed within
thirty (30) days after the commencement thereof, (b) shall be suspended by such
Governmental Authority for a period in excess of thirty (30) days or (c) shall
not be reissued or renewed by such Governmental Authority upon the expiration
thereof following application for such reissuance or renewal of such Insurance
Subsidiary, which loss of License, in any case, could reasonably be expected to
have a Material Adverse Effect; or
(o) any Insurance Subsidiary shall be the subject of a final
non-appealable order imposing a fine by or at the request of any state insurance
regulatory agency as a result of the violation by such Insurance Subsidiary of
such state's applicable
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insurance laws or the regulations promulgated in connection therewith which
could reasonably be expected to have a Material Adverse Effect; or
(p) any Insurance Subsidiary shall become subject to any
conservation, rehabilitation or liquidation order, directive or mandate issued
by any Governmental Authority or any Insurance Subsidiary shall become subject
to any other directive or mandate issued by any Governmental Authority in either
case which could reasonably be expected to have a Material Adverse Effect and
which is not stayed within thirty (30) days.
IX.2 REMEDIES. If any Event of Default occurs, the Agent shall, at the
request of, or may, with the consent of, the Majority Banks:
(a) declare the commitment of each Bank to make Loans and any
obligation of the Issuing Bank to Issue Letters of Credit to be
terminated, whereupon such commitments and obligation shall be
terminated;
(b) declare an amount equal to the maximum aggregate amount
that is or at any time thereafter may become available for drawing
under any outstanding Letters of Credit (whether or not any beneficiary
shall have presented, or shall be entitled at such time to present, the
drafts or other documents required to draw under such Letters of
Credit) to be immediately due and payable, and declare the unpaid
principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Banks all rights and
remedies available to it and the Banks under the Loan Documents or
applicable law;
PROVIDED, HOWEVER, that upon the occurrence of any event specified in Sections
9.01(f) or (g) (in the case of clause (i) of Section 9.01 (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each Bank
to make Loans and any obligation of the Issuing Bank to Issue Letters of Credit
shall automatically terminate and the unpaid principal amount of all outstanding
Loans and all interest and other amounts as aforesaid shall automatically become
due and payable without further act of the Agent, the Issuing Bank or any Bank.
IX.3 RIGHTS NOT EXCLUSIVE. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies
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provided by law or in equity, or under any other instrument, document or
agreement now existing or hereafter arising.
ARTICLE X
THE AGENT
---------
X.1 APPOINTMENT AND AUTHORIZATION; "AGENT".
(a) Each Bank hereby irrevocably (subject to Section 10.09)
appoints, designates and authorizes the Agent (including, without limitation, in
its capacity as Collateral Agent) to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent. Without limiting the generality
of the foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
(b) The Issuing Bank shall act on behalf of the Banks with
respect to any Letters of Credit issued by it and the documents associated
therewith until such time and except for so long as the Agent may agree at the
request of the Majority Lenders to act for such Issuing Bank with respect
thereto; provided, however, that the Issuing Bank shall have all of the benefits
and immunities (i) provided to the Agent in this Article X with respect to any
acts taken or omissions suffered by the Issuing Bank in connection with Letters
of Credit issued by it or proposed to be issued by it and the application and
agreements for letters of credit pertaining to the Letters of Credit as fully as
if the term "Agent", as used in this Article X, included the Issuing Bank with
respect to such acts or omissions, and (ii) as additionally provided in this
Agreement with respect to the Issuing Bank.
X.2 DELEGATION OF DUTIES. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or
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through agents, employees 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 agent or attorney-in-fact
that it selects with reasonable care.
X.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall (i) be
liable to the Banks for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Banks for any
recital, statement, representation or warranty made by the Company or any
Subsidiary or Affiliate of the Company, or any officer thereof, contained in
this Agreement or in any other Loan Document, 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, this Agreement or any other Loan Document, or
the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of the Company or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Company or any
of the Company's Subsidiaries or Affiliates.
X.4 RELIANCE BY AGENT.
(a) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation 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 counsel to the
Company), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Majority Banks as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the Majority
Banks and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Banks.
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(b) For purposes of determining compliance with the conditions
specified in Section 5.01, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Bank.
X.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Agent for the account of the Banks, unless the Agent shall have
received written notice from a Bank or the Company referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". The Agent will notify the Banks of its receipt of any such
notice. The Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Majority Banks in accordance with Article
IX; PROVIDED, HOWEVER, that unless and until the Agent has received any such
request, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Banks.
X.6 CREDIT DECISION. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company and its Subsidiaries
hereunder. Each Bank also represents that it will, independently and without
reliance upon any Agent-Related Person 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 the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Company.
Except for notices, reports and other documents expressly herein required to be
furnished to the Banks by the Agent, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other
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information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of the Company which may come into the
possession of any of the Agent-Related Persons.
X.7 INDEMNIFICATION OF AGENT. Whether or not the transactions
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), pro rata,
from and against any and all Indemnified Liabilities; PROVIDED, HOWEVER, that no
Bank shall be liable for the payment to the Agent-Related Persons of any portion
of such Indemnified Liabilities resulting solely from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each Bank
shall reimburse the Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Company. The undertaking in
this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of the Agent.
X.8 AGENT IN INDIVIDUAL CAPACITY. B of A and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though B of A were not the Agent or the Issuing
Bank hereunder and without notice to or consent of the Banks. The Banks
acknowledge that, pursuant to such activities, B of A or its Affiliates may
receive information regarding the Company or its Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Company or such Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to its Loans, B of
A shall have the same rights and powers under this Agreement as any other Bank
and may exercise the same as though it were not the Agent.
X.9 SUCCESSOR AGENT. The Agent may, and at the request of the Majority
Banks shall, resign as Agent upon 30 days' notice to the Banks. If the Agent
resigns under this Agreement, the Majority Banks shall appoint from among the
Banks a successor agent for the Banks which successor agent shall be approved by
the Company. If no successor agent is appointed prior to the effective date of
the
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resignation of the Agent, the Agent may appoint, after consulting with the Banks
and the Company, a successor agent from among the Banks. Upon the acceptance of
its appointment as successor agent hereunder, such successor agent shall succeed
to all the rights, powers and duties of the retiring Agent and the term "Agent"
shall mean such successor agent and the retiring Agent's appointment, powers and
duties as Agent shall be terminated. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article X and Sections 11.04 and
11.05 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent under this Agreement. If no successor agent has
accepted appointment as Agent by the date which is 30 days following a retiring
Agent's notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and the Banks shall perform all of the
duties of the Agent hereunder until such time, if any, as the Majority Banks
appoint a successor agent as provided for above. Notwithstanding the foregoing,
however, B of A may not be removed as the Agent at the request of the Majority
Banks unless B of A shall also simultaneously be replaced as "Issuing Bank"
hereunder pursuant to documentation in form and substance reasonably
satisfactory to B of A.
X.10 WITHHOLDING TAX
(a) If any Bank is a "foreign corporation, partnership or
trust" within the meaning of the Code and such Bank claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such
Bank agrees with and in favor of the Agent, to deliver to the Agent:
(i) if such Bank claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty, two
properly completed and executed copies of IRS Form 1001 before the
payment of any interest in the first calendar year and before the
payment of any interest in each third succeeding calendar year during
which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under
this Agreement is exempt from United States withholding tax because it
is effectively connected with a United States trade or business of such
Bank, two properly completed and executed copies of IRS Form 4224
before the payment of any interest is due in the first taxable year of
such Bank and in each succeeding taxable year of such Bank during which
interest may be paid under this Agreement; and
(iii) such other form or forms as may be required
under the Code or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding tax.
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Such Bank agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001 and
such Bank sells, assigns, grants a participation in, or otherwise transfers all
or part of the Obligations of the Company to such Bank, such Bank agrees to
notify the Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Company to such Bank. To the extent of
such percentage amount, the Agent will treat such Bank's IRS Form 1001 as no
longer valid.
(c) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Company to such Bank, such Bank agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Bank
an amount equivalent to the applicable withholding tax after taking into account
such reduction. However, if the forms or other documentation required by clause
(a) of this Section are not delivered to the Agent, then the Agent may withhold
from any interest payment to such Bank not providing such forms or other
documentation an amount equivalent to the applicable withholding tax imposed by
Sections 1441 and 1442 of the Code, without reduction.
(e) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered or was not properly executed, or
because such Bank failed to notify the Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Bank shall indemnify the Agent fully for all amounts
paid, directly or indirectly, by the Agent as tax or otherwise, including
penalties and interest, and including any taxes imposed by any jurisdiction on
the amounts payable to the Agent under this Section, together with all costs and
expenses (including Attorney Costs). The obligation of the Banks under this
Section shall survive the payment of all Obligations and the resignation or
replacement of the Agent.
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ARTICLE XI
MISCELLANEOUS
XI.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to any
departure by the Company or any applicable Subsidiary therefrom, shall be
effective unless the same shall be in writing and signed by the Majority Banks
(or by the Agent at the written request of the Majority Banks) and the Company
and acknowledged by the Agent, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; PROVIDED, HOWEVER, that no such waiver, amendment, or consent shall,
unless in writing and signed by all the Banks and the Company and acknowledged
by the Agent, do any of the following:
(a) increase or extend the Commitment of any Bank
(or reinstate any Commitment terminated pursuant to Section 8.02);
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or
other amounts due to the Banks (or any of them) hereunder or under any
other Loan Document ;
(c) reduce the principal of, or the rate of interest specified
herein on any Loan, or (subject to clause (iii) below) any fees or
other amounts payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for
the Banks or any of them to take any action hereunder; or
(e) amend this Section, or Section 2.14, or any provision
herein providing for consent or other action by all Banks;
and, PROVIDED FURTHER, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Bank in addition to the Majority Banks or all
the Banks, as the case may be, affect the rights or duties of the Issuing Bank
under this Agreement or any L/C-Related Document relating to any Letter of
Credit Issued or to be Issued by it, (ii) no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Majority Banks or
all the Banks, as the case may be, affect the rights or duties of the Agent
under this Agreement or any other Loan Document, and (iii) the Fee Letter may be
amended, or rights
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or privileges thereunder waived, in a writing executed by the parties thereto.
XI.2 NOTICES.
(a) All notices, requests, consents, approvals, waivers and
other communications shall be in writing (including, unless the context
expressly otherwise provides, by facsimile transmission, provided that any
matter transmitted by facsimile (i) shall be immediately confirmed by a
telephone call to the recipient at the number specified on SCHEDULE 11.02, and
(ii) shall be followed promptly by delivery of a hard copy original thereof) and
mailed, faxed or delivered, to the address or facsimile number specified for
notices on SCHEDULE 11.02; or, as directed to the Company or the Agent, to such
other address as shall be designated by such party in a written notice to the
other parties, and as directed to any other party, at such other address as
shall be designated by such party in a written notice to the Company and the
Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except that
notices pursuant to Article II, III or X to the Agent shall not be effective
until actually received by the Agent, and notices pursuant to Article III to the
Issuing Bank shall not be effective until actually received by the Issuing Bank
at the address specified for the "Issuing Bank" on the applicable signature page
hereof.
(c) Any agreement of the Agent and the Banks 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 Banks shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the Company
to give such notice and the Agent and the Banks 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 Banks in reliance upon such telephonic or facsimile notice. The
obligation of the Company to repay the Loans and L/C Obligations shall not be
affected in any way or to any extent by any failure by the Agent and the Banks
to receive written confirmation of any telephonic or facsimile notice or the
receipt by the Agent and the Banks of a confirmation which is at variance with
the terms understood by the Agent and the Banks to be contained in the
telephonic or facsimile notice.
XI.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any
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right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
XI.4 COSTS AND EXPENSES. The Company shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse B of A (including in its capacity as Agent and
Issuing Bank) within five Business Days after demand (subject to Section
5.01(e)) for all costs and expenses incurred by B of A (including in its
capacity as Agent and Issuing Bank) in connection with the development,
preparation, delivery, administration and execution of, and any amendment,
supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other documents prepared
in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including reasonable Attorney Costs incurred by
B of A (including in its capacity as Agent and Issuing Bank) with respect
thereto; and
(b) pay or reimburse the Agent and each Bank within five
Business Days after demand (subject to Section 5.01(e)) for all costs and
expenses (including Attorney Costs) incurred by them in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or any other Loan Document during the existence of an Event
of Default or after acceleration of the Loans (including in connection with any
"workout" or restructuring regarding the Loans, and including in any Insolvency
Proceeding or appellate proceeding).
XI.5 COMPANY INDEMNIFICATION. Whether or not the transactions
contemplated hereby are consummated, the Company shall indemnify, defend and
hold the Agent-Related Persons, and each Bank and each of its 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 Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans, the termination of the Letters of Credit and the
termination, resignation or replacement of the Agent or replacement of any Bank)
be imposed on, incurred by or asserted against any such Person in any way
relating to or arising out of the Company entering into 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 any act or failure to act of the
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Company or any of its Subsidiaries in connection with this Agreement or the
Loans or Letters of Credit the use of the proceeds thereof, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
"INDEMNIFIED LIABILITIES"); PROVIDED, 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 Section shall survive payment of all other
Obligations.
XI.6 PAYMENTS SET ASIDE. To the extent that the Company makes a
payment to the Agent or the Banks, or the Agent or the Banks exercise their
right of set-off, and such payment or the proceeds of such 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 or such Bank in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any Insolvency Proceeding or otherwise, then (a)
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 set-off had not occurred, and (b)
each Bank severally agrees to pay to the Agent upon demand its pro rata share of
any amount so recovered from or repaid by the Agent.
XI.7 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Agent and each Bank.
XI.8 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) Any Bank may, with the written consent of the Agent and
the Issuing Bank, which consents shall not be unreasonably withheld, at any time
assign and delegate to one or more Eligible Assignees (provided that no written
consent of the Agent or the Issuing Bank shall be required in connection with
any assignment and delegation by a Bank to an Eligible Assignee that is an
Affiliate of such Bank) (each an "ASSIGNEE") all, or any ratable part of all, of
the Loans, the Commitments and L/C Obligations, and the other rights and
obligations of such Bank hereunder, in a minimum amount of $5,000,000 (or, if
less, the entire amount of such Bank's Loans, Commitment and L/C Obligations);
PROVIDED, HOWEVER, that the Company and the Agent may continue to deal solely
and directly with such Bank in connection with the interest so assigned to an
Assignee until (i) written notice of such assignment, together with payment
instructions, addresses and related information with respect to the Assignee,
shall have been
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given to the Company and the Agent by such Bank and the Assignee; (ii) such Bank
and its Assignee shall have delivered to the Company and the Agent an Assignment
and Acceptance in the form of EXHIBIT E ("ASSIGNMENT AND ACCEPTANCE") together
with any Note or Notes subject to such assignment and (iii) the assignor Bank or
Assignee has paid to the Agent a processing fee in the amount of $3,000.
(b) From and after the date that the Agent notifies the
assignor Bank that it has received (and provided its consent with respect to) an
executed Assignment and Acceptance and payment of the above-referenced
processing fee, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and obligations of a
Bank under the Loan Documents, and (ii) the assignor Bank shall, to the extent
that rights and obligations hereunder and under the other Loan Documents have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by
the Agent that it has received an executed Assignment and Acceptance and payment
of the processing fee, (and provided that it consents to such assignment in
accordance with Section 11.08(a)), the Company shall execute and deliver to the
Agent, new Notes evidencing such Assignee's assigned Loans and Commitment and,
if the assignor Bank has retained a portion of its Loans and its Commitment,
replacement Notes in the principal amount of the Loans retained by the assignor
Bank (such Notes to be in exchange for, but not in payment of, the Notes held by
such Bank). Immediately upon each Assignee's making its processing fee payment
under the Assignment and Acceptance, this Agreement shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the addition
of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Bank PRO TANTO.
(d) Any Bank may at any time sell to one or more commercial
banks or other Persons not Affiliates of the Company (a "PARTICIPANT")
participating interests in any Loans, the Commitment of that Bank and the other
interests of that Bank (the "originating Bank") hereunder and under the other
Loan Documents; PROVIDED, HOWEVER, that (i) the originating Bank's obligations
under this Agreement shall remain unchanged, (ii) the originating Bank shall
remain solely responsible for the performance of such obligations, (iii) the
Company, the Issuing Bank and the Agent shall continue to deal solely and
directly with the originating Bank in connection with the originating Bank's
rights and obligations under this Agreement and the other Loan Documents, and
(iv) no Bank shall transfer or grant any participating interest under which the
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Participant has rights to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, except to the extent
such amendment, consent or waiver would require unanimous consent of the Banks
as described in the FIRST PROVISO to Section 11.01. In the case of any such
participation, the Participant shall not have any rights under this Agreement,
or any of the other Loan Documents, and all amounts payable by the Company
hereunder shall be determined as if such Bank had not sold such participation;
except that, if amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set-off in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Bank under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any
Bank may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement and the Note held by
it in favor of any Federal Reserve Bank in accordance with Regulation A of the
FRB or U.S. Treasury Regulation 31 CFR ss.203.14, and such Federal Reserve Bank
may enforce such pledge or security interest in anY manner permitted under
applicable law.
(f) No assignee, participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Article IV than
such Bank would have been entitled to receive with respect to the rights
transferred or by reason of the provisions of Article IV requiring such Bank to
designate a different Applicable Lending Office under certain circumstances or
at a time when the circumstances giving rise to such greater payment did not
exist.
XI.9 CONFIDENTIALITY. Each Bank agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" or
"secret" by the Company and provided to it or to which it otherwise is granted
access by the Company or any Subsidiary, or by the Agent on the Company's or
such Subsidiary's behalf, under this Agreement or any other Loan Document, and
neither it nor any of its Affiliates shall use any such information other than
in connection with or in enforcement of this Agreement and the other Loan
Documents or in connection with other business now or hereafter existing or
contemplated with the Company or any Subsidiary or to disclose it to any third
person; except to the extent such information (i) was or becomes generally
available to the public other than as a result of disclosure by the Bank, or
(ii) was or becomes available on a non-confidential basis from a source other
than the Company,
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provided that such source is not bound by a confidentiality agreement with the
Company known to the Bank; PROVIDED, HOWEVER, that any Bank may disclose such
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which the Bank is subject or in connection with an
examination of such Bank by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the Agent, any
Bank or their respective Affiliates may be party; (E) to the extent reasonably
required in connection with the exercise of any remedy hereunder or under any
other Loan Document; (F) to such Bank's independent auditors and other
professional advisors; (G) to any Participant or Assignee, actual or potential,
provided that such Person agrees in writing to keep such information
confidential to the same extent required of the Banks hereunder; (H) as to any
Bank or its Affiliate, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which the Company or any
Subsidiary is party or is deemed party with such Bank or such Affiliate; and (I)
to its Affiliates; PROVIDED that such Bank shall provide notice to the Company
of any requirement to disclose to a person who does not have an obligation to
such Bank (or pursuant to applicable law or applicable court order) to keep such
information confidential (it being understood and agreed that the failure to
provide such notice shall not constitute a violation by such Bank of this
Section 11.09).
XI.10 SET-OFF. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Bank is authorized at any time and from 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 by, such Bank to or for the credit or
the account of the Company against any and all Obligations owing to such Bank,
now or hereafter existing, irrespective of whether or not the Agent or such Bank
shall have made demand under this Agreement or any Loan Document and although
such Obligations may be contingent or unmatured. Each Bank agrees promptly to
notify the Company and the Agent after any such set-off and application made by
such Bank; PROVIDED, HOWEVER, that the failure to give such notice shall not
affect the validity of such set-off and application.
XI.11 AUTOMATIC DEBITS OF FEES. With respect to any principal or
interest due on the Loans, unreimbursed L/C Obligations, Commitment Fees,
arrangement fee, letter of credit fee or other fee, or any other cost or expense
(including Attorney Costs) due and payable to the Agent, the Issuing Bank or B
of A
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under the Loan Documents, the Company hereby irrevocably authorizes B of A to
debit any deposit account of the Company with B of A in an amount such that the
aggregate amount debited from all such deposit accounts does not exceed such fee
or other cost or expense. If there are insufficient funds in such deposit
accounts to cover the amount of the fee or other cost or expense then due, such
debits will be reversed (in whole or in part, in B of A's sole discretion) and
such amount not debited shall be deemed to be unpaid. No such debit under this
Section shall be deemed a set-off.]
XI.12 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Bank shall
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
XI.13 COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
XI.14 SEVERABILITY. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
XI.15 NO THIRD PARTIES BENEFITED. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Banks, the
Agent and the Agent-Related Persons, 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.
XI.16 GOVERNING LAW AND JURISDICTION.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS; PROVIDED THAT
THE PARTIES SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) 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 ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE AGENT AND
THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE
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JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, THE AGENT AND THE BANKS
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
BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS,
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY ILLINOIS LAW.
XI.17 WAIVER OF JURY TRIAL. THE COMPANY, THE BANKS 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
BANKS 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 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.
XI.18 ENTIRE AGREEMENT. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Banks and the Agent, and supersedes all prior or contemporaneous agreements
and understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Chicago, Illinois by their proper and duly
authorized officers as of the day and year first above written.
INTERNATIONAL ALLIANCE SERVICES, INC.
By
----------------------------------------------
Name: Xxxxxxx X. Skoda
Title: Executive Vice President
and Chief Financial Officer
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION, as Agent
By
----------------------------------------------
Name: Xxx XxXxxxx
Title: Assistant Vice President
BANK OF AMERICA NATIONAL
TRUST & SAVINGS ASSOCIATION,
Individually as a Bank and as
the Issuing Bank
By
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
STAR BANK, N.A.
By
----------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
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SCHEDULE 2.01
COMMITMENTS
AND PRO RATA SHARES
Pro Rata
Bank Commitment Share
---- ---------- --------
Bank of America National Trust &
Savings Association
TOTAL $50,000,000 100%
105
SCHEDULE 11.02
--------------
AGENT AND BANK NOTICE INFORMATION
---------------------------------
BANK OF AMERICA NATIONAL
------------------------
TRUST & SAVINGS ASSOCIATION,
----------------------------
as Agent and Collateral Agent
Bank of America Illinois
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx XxXxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
AGENT'S PAYMENT OFFICE:
-----------------------
Bank of America National Trust &
Savings Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
BANK OF AMERICA NATIONAL
------------------------
TRUST & SAVINGS ASSOCIATION,
----------------------------
as a Bank
Bank of America Illinois
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx XxXxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Notices (other than Borrowing notices and
Notices of Conversion/Continuation):
000
Xxxx xx Xxxxxxx National Trust &
Savings Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx XxXxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
BANK OF AMERICA NATIONAL TRUST
& SAVING ASSOCIATION,
as Issuing Bank
Bank of America National Trust &
Saving Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxxx
Tel: (000) 000-0000
Fax:
COMPANY NOTICE INFORMATION
--------------------------
International Alliance Services, Inc.
00000 Xxxxx Xxxxxx Xxxxx
Xxxxxx Xxxx, Xxxx 00000
Attn:
Tel:
Fax:
