EXHIBIT 4
CREDIT AGREEMENT
Dated as of June 20, 1997
among
MGIC INVESTMENT CORPORATION,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent,
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
Arranged by
BANCAMERICA SECURITIES, INC.
TABLE OF CONTENTS
Section
Page||
ARTICLE IDEFINITIONS
1.1 Certain Defined Terms
1.2 Other Interpretive Provisions
1.3 Accounting Principles
ARTICLE IITHE CREDITS
2.1 Amounts and Terms of Commitments
2.2 Loan Accounts
2.3 Procedure for Borrowing
2.4 Conversion and Continuation Elections
2.5 Voluntary Termination or Reduction of Commitments
2.6 Optional Prepayments
2.7 Mandatory Commitment Reductions; Mandatory
Prepayments of Loans
2.8 Repayment
2.9 Interest
2.10 Fees
(a) Arrangement, Agency Fees
(b) Facility Fees
2.11 Computation of Fees and Interest
2.12 Payments by the Company
2.13 Payments by the Banks to the Agent
2.14 Sharing of Payments, Etc.
ARTICLE IIITAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes
3.2 Illegality
3.3 Increased Costs and Reduction of Return
3.4 Funding Losses
3.5 Inability to Determine Rates
3.6 Substitution of Banks
3.7 Survival
ARTICLE IVCONDITIONS PRECEDENT
4.1 Conditions of Initial Loans
(a) Credit Agreement and Notes
(b) Resolutions; Incumbency
(c) Organization Documents; Good Standing
(d) Legal Opinion
(e) Payment of Fees
(f) Certificate
(g) Other Documents
4.2 Conditions to All Borrowings
(a) Notice of Borrowing
(b) Continuation of Representations and
Warranties
(c) No Existing Default
ARTICLE VREPRESENTATIONS AND WARRANTIES
5.1 Corporate Existence and Power
5.2 Corporate Authorization; No Contravention
5.3 Governmental Authorization
5.4 Binding Effect
5.5 Litigation
5.6 No Default
5.7 ERISA Compliance
5.8 Use of Proceeds; Margin Regulations
5.9 Title to Properties
5.10 Taxes
5.11 Financial Condition
5.12 Environmental Matters
5.13 Regulated Entities
5.14 No Burdensome Restrictions
5.15 Copyrights, Patents, Trademarks and Licenses, etc.
5.16 Subsidiaries
5.17 Insurance
5.18 Full Disclosure
ARTICLE VIAFFIRMATIVE COVENANTS
6.1 Financial Statements
6.2 Certificates; Other Information
6.3 Notices
6.4 Preservation of Corporate Existence, Etc.
6.5 Maintenance of Property
6.6 Insurance
6.7 Payment of Obligations
6.8 Compliance with Laws
6.9 Compliance with ERISA
6.10 Inspection of Property and Books and Records
6.11 Environmental Laws
6.12 Use of Proceeds
ARTICLE VIINEGATIVE COVENANTS
7.1 Limitation on Liens
7.2 Disposition of Assets
7.3 Consolidations and Mergers
7.4 Limitation on Indebtedness
7.5 Use of Proceeds
7.6 Contingent Obligations
7.7 Lease Obligations
7.8 ERISA
7.9 Change in Business
7.10 Accounting Changes
7.11 Financial Covenants
ARTICLE VIIIEVENTS OF DEFAULT
8.1 Event of Default
(a) Non-Payment
(b) Representation or Warranty
(c) Specific Defaults
(d) Other Defaults
(e) Cross-Default
(f) Insolvency; Voluntary Proceedings
(g) Involuntary Proceedings
(h) ERISA
(i) Monetary Judgments
(j) Non-Monetary Judgments
(k) Change of Control
(l) Loss of Licenses
(m) Change in Law
8.2 Remedies
8.3 Rights Not Exclusive
ARTICLE IXTHE AGENT
9.1 Appointment and Authorization
9.2 Delegation of Duties
9.3 Liability of Agent
9.4 Reliance by Agent
9.5 Notice of Default
9.6 Credit Decision
9.7 Indemnification
9.8 Agent in Individual CapacUS
10.1 Amendments and Waivers
10.2 Notices
10.3 No Waiver; Cumulative Remedies
10.4 Costs and Expenses
10.5 Indemnity
10.6 Payments Set Aside
10.7 Successors and Assigns
10.8 Assignments, Participations, etc.
10.9 Confidentiality
10.10 Set-off
10.11 Margin Stock Not Collateral
10.12 Notification of Addresses, Lending Offices, Etc.
10.13 Counterparts
10.14 Severability
10.15 No Third Parties Benefited
10.16 Governing Law and Jurisdiction
10.17 Waiver of Jury Trial
10.18 Entire Agreement
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SCHEDULES
Schedule 2.1 Commitments
Schedule 5.5 Litigation
Schedule 5.7 ERISA
Schedule 5.11 Permitted Liabilities
Schedule 5.12 Environmental Matters
Schedule 5.16 Subsidiaries and Minority Interests
Schedule 5.17 Insurance Matters
Schedule 7.1 Permitted Liens
Schedule 10.2 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 Promissory Note
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of June 20, 1997,
among MGIC Investment Corporation, a Wisconsin 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 and Savings
Association, as agent for the Banks.
WHEREAS, the Banks have agreed to make available to the
Company a revolving credit facility upon the terms and
conditionsset 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
1.1 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 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.
"Acquired Subsidiary" means a Subsidiary (i) the
stock
or equity interests in which are acquired (whether by
purchase,
merger or otherwise) after the date hereof from a Person or
Persons which are not Subsidiaries at the time of such
acquisition or (ii) the majority of the assets of which are
acquired (whether by purchase, merger or otherwise) after the
date hereof from a Person or Persons which are not
Subsidiaries
at the time of such acquisition.
"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, by
contract,
or otherwise.
"Agent" means BofA in its capacity as agent for the
Banks hereunder, and any successor agent arising under Section
9.9.
"Agent-Related Persons" means BofA and any successor
agent arising under Section 9.9, together with their
respective
Affiliates (including, in the case of BofA, the Arranger), and
the officers, directors, employees, agents and attorneys-in-
fact
of such Persons and Affiliates.
"Agent's Payment Office" means the address for
payments
set forth on the signature page hereto in relation to the
Agent,
or such other address as the Agent may from time to time
specify.
"Agreement" means this Credit Agreement.
"Annual Statement" means the annual financial
statement
of any insurance company as required to be filed with the
Department, together with all exhibits or schedules filed
therewith, prepared in conformity with SAP. References to
amounts on particular exhibits, schedules, lines, pages and
columns of such Annual Statements are based on the formats
promulgated by the NAIC for 1996 Annual Statements for the
applicable type of insurance company. If such format is
changed
in future years so that different information is contained in
such items or they no longer exist, it is understood that the
reference is to information consistent with that recorded in
the
referenced item in the 1996 Annual Statement of the insurance
company.
"Applicable Margin" means, for any date of
determination, a percentage equal to the Applicable Margin set
forth in the following table, corresponding to the Claims
Paying
Rating of MGIC on such date:
Applicable Applicable
Margin for Margin for
Claims Paying Base Rate Offshore Rate
Level Rating Loans Loans Facility
I AA+/Aa1 or
greater 0.00% .165% .065%
II AA/Aa2 0.00% .175% .075%
III AA-/Aa3 0.00% .21% .09%
provided, that if the Claims Paying Rating assigned to
MGIC by Standard & Poor's Ratings Services differs from the Claims
Paying Rating assigned to MGIC by Xxxxx'x Investors Service,
Inc. by no more than one level, the level corresponding to the
higher Claims Paying Rating shall apply, and provided further that if
the Claims Paying Rating assigned to MGIC by Standard & Poor's
Ratings Services differs from the Claims Paying Rating
assigned to MGIC by Xxxxx'x Investors Service, Inc. by more than one
level, the median level shall apply (or if there is no median
level, the higher of the two levels adjacent to the median).
"Arranger" means BancAmerica Securities, Inc., a
Delaware corporation.
"Assignee" has the meaning specified in subsection
10.8(a).
"Attorney Costs" means and includes all fees and
disbursements of any law firm or other external counsel, the
non-
duplicative allocated cost of internal legal services and all
disbursements of internal counsel.
"Bank" has the meaning specified in the introductory
clause hereto.
"Bankruptcy Code" means the Federal Bankruptcy Reform
Act of 1978 (11 U.S.C. 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 day as publicly announced from
time to time by BofA in San Francisco, California, as its
"reference rate." (The "reference rate" is a rate set by BofA
based upon various factors including BofA'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 BofA
shall
take effect at the opening of business on the day specified in
the public announcement of such change.
"Base Rate Loan" means a Loan that bears interest
based
on the Base Rate.
"BofA" means Bank of America National Trust and
Savings
Association, a national banking association.
"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, other than in the case of Base
Rate
Loans, having the same Interest Period.
"Borrowing Date" means any date on which a Borrowing
occurs under Section 2.3.
"Business Day" means any day other than a Saturday,
Sunday or other day on which commercial banks in Chicago 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
dollar 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.
"Change of Control" means the acquisition by any
Person,
other than The Northwestern Mutual Life Insurance Company, or
two
or more Persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and
Exchange
Commission under the Securities Exchange Act of 1934) of 25%
or
more of the outstanding shares of voting stock of the Company.
"Claims Paying Rating" means the claims paying rating
assigned to MGIC by Standard & Poor's Ratings Services or
Xxxxx'x
Investors Service, Inc.
"Closing Date" means the date on which all conditions
precedent set forth in Section 4.1 are satisfied or waived by
all
Banks (or, in the case of subsection 4.1(e), waived by the
Person
entitled to receive such payment).
"Code" means the Internal Revenue Code of 1986, and
regulations promulgated thereunder.
"Commitment", as to each Bank, has the meaning
specified
in Section 2.1.
"Company" has the meaning specified in the
introductory
clause hereto.
"Compliance Certificate" means a certificate
substantially in the form of Exhibit C.
"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 or letter of credit (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 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 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. 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,
shall be equal to the maximum reasonably anticipated liability
in
respect thereof.
"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 2.4, 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.
"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.
"Department" means the applicable Governmental
Authority
of the state of domicile of an insurance company responsible
for
the regulation of said insurance company.
"Dollars", "dollars" and "$" each mean lawful money
of
the United States.
"Eligible Assignee" means (i) 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; (ii) 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 country in
which
it is organized or another country which is also a member
of
the OECD; and (iii) a Person that is primarily engaged in
the
business of commercial banking and that is (A) a Subsidiary
of
a Bank, (B) a Subsidiary of a Person of which a Bank is a
Subsidiary, or (C) 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.
"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 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 8.1.
"Exchange Act" means the Securities and Exchange Act
of
1934, and regulations promulgated thereunder.
"FDIC" means the Federal Deposit Insurance
Corporation,
and any Governmental Authority succeeding to any of its
principal functions.
"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 subsection
2.10(a).
"FRB" means The Board of Governors of the Federal
Reserve System, and any Governmental Authority succeeding
to
any of its principal functions.
"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 hereof.
"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, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise,
by any of the foregoing.
"Guaranty Obligation" has the meaning specified in
the
definition of "Contingent Obligation."
"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; (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; (g) all net obligations with
respect to Swap Contracts; (h) all indebtedness referred to in
clauses (a) through (g) 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 (i) 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 10.5.
"Indemnified Person" has the meaning specified in
Section 10.5.
"Independent Auditor" has the meaning specified in
subsection 6.1(a).
"Insolvency Proceeding" means (a) any case, action or
proceeding 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, marshalling 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 Code" means, with respect to any insurance
company, the insurance code of its state of domicile and any
successor statute of similar import, together with the
regulations thereunder, as amended or otherwise modified and
in effect from time to time. References to sections of the
Insurance Code shall be construed to also refer to successor
sections.
"Interest Payment Date" means, as to any Offshore
Rate
Loan, the last day of each Interest Period applicable to such
Loan (or quarterly, if earlier) and, as to any Base Rate Loan,
quarterly on the last Business Day of each of March, June,
September and December and each date such Loan is converted
into another Type of Loan.
"Interest Period" means, as to any Offshore Rate
Loan,
the period commencing on the Borrowing Date of such Loan or on
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
(and nine or twelve months if available in the given instance)
as selected by the Company in its Notice of Borrowing or
Notice of Conversion/Continuation; provided that:
(i) 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, in the case of
an
Offshore Rate Loan, 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;
(ii) any Interest Period pertaining to an
Offshore
Rate Loan 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
(iii) no Interest Period shall extend beyond
any
date on which the aggregate amount of the Commitments is
scheduled to be reduced pursuant to Section 2.7 unless the
aggregate principal amount of Loans represented by Base Rate
Loans, or by Offshore Loans having Interest Periods that will
expire on or before such Commitment Reduction Date, equals or
exceeds the amount of the principal payment that would be
required on such reduction date.
"IRS" means the Internal Revenue Service, and any
Governmental Authority succeeding to any of its principal
functions under the Code.
"Joint Venture" means a single-purpose corporation,
partnership, 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.
"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 10.2, or such other office or
offices as such Bank may from time to time notify the Company
and the Agent.
"Lien" means any security interest, mortgage, deed of
trust, pledge, hypothecation, assignment for security, charge
or
deposit arrangement for collateral purposes, encumbrance, lien
(statutory or other) or consensual 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, and may be a Base Rate Loan or an
Offshore Rate Loan (each, a "Type" of Loan).
"Loan Documents" means this Agreement, any Notes and
the
Fee Letter.
"Majority Banks" means at any time Banks then holding
in
excess of 50% of the then aggregate unpaid principal amount of
the Loans, or, if no such principal amount is then
outstanding,
Banks then having in excess of 50% of the Commitments.
"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 or condition (financial or otherwise) of
the
Company and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of the Company 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 of any Loan
Document; provided, however, that the repurchase by the
Company
of Company common stock for consideration not in excess of
$250,000,000 shall not be considered a Material Adverse
Effect.
"MGIC" means Mortgage Guaranty Insurance Corporation,
a
Wisconsin stock insurance corporation.
"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.
"Note" means a promissory note executed by the
Company
in favor of a Bank pursuant to subsection 2.2(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, 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 = LIBOR
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 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
"LIBOR" means the rate of interest per annum
determined by the Agent to be the arithmetic mean (rounded
upward
to the next 1/16th of 1%) of the rates of interest per annum
notified to the Agent by BofA as the rate of interest at which
dollar deposits in the approximate amount of the amount of the
Loan to be made or continued as, or converted into, an
Offshore
Rate Loan by BofA and having a maturity comparable to such
Interest Period would be offered to major banks in the London
interbank market at their request at approximately 11:00 a.m.
(London 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 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 or registration of, or otherwise
with respect to, this Agreement or any other Loan Documents,
but
not including taxes on or taxes measured by income.
"Participant" has the meaning specified in subsection
10.8(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
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 Liens" has the meaning specified in
Section
7.1.
"Person" means an individual, partnership,
corporation,
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.
"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.
"Replacement Bank" has the meaning specified in
Section
3.6.
"Reportable Event" means, any of the events set forth
in
Section 4043(b) 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,
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, as to the Company or any
Subsidiary, the chief executive officer, the president, any
senior vice president or any executive vice president of the
Company or such Subsidiary, as the case may be, or any other
officer having substantially the same authority and
responsibility; or, with respect to compliance with financial
covenants, the chief financial officer, chief accounting
officer,
treasurer or any assistant treasurer of the Company or such
Subsidiary, as the case may be, or any other officer having
substantially the same authority and responsibility.
"SAP" means, as to any insurance company, the
statutory
accounting practices prescribed or permitted by the
Department.
"SEC" means the Securities and Exchange Commission,
or
any Governmental Authority succeeding to any of its principal
functions.
"Significant Insurance Subsidiary" means, at any
time,
MGIC and any other Subsidiary engaged primarily in the
business
of insurance having at such time either (i) total (gross)
revenues for the preceding four fiscal quarter periods in
excess
of $25,000,000 or (ii) total assets, as of the last day of the
preceding fiscal quarter, having a net book value in excess of
$75,000,000, in each case based upon the Company's most recent
annual or quarterly financial statements delivered to the
Agent
under Section 6.1; provided that Mortgage Guaranty Reinsurance
Corporation, a Wisconsin corporation, (or any successor
thereto)
shall not be deemed a Significant Insurance Subsidiary so long
as
it engages in no material business other than holding the
stock
of MGIC.
"Significant Subsidiary" means, at any time, MGIC and
any other Subsidiary having at such time either (i) total
(gross)
revenues for the preceding four fiscal quarter periods in
excess of $25,000,000 or (ii) total assets, as of the last day
of the preceding fiscal quarter, having a net book value in
excess of $75,000,000, in each case based upon the Company's
most recent annual or quarterly financial statements delivered
to the Agent under Section 6.1.
"Subsidiary" of a Person means any corporation,
association, partnership, joint venture or other business
entity of which more than 50% of the voting stock 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, provided, however that
Credit-Based Asset Servicing and Securitization LLC, Xxxxxx
Loan Servicing LP and Xxxxxx XX LLC and any successors thereto
shall not become Subsidiaries as a result of the acquisition
of interests therein from members of the management of such
entities if the interests so acquired that would, but for this
exception, result in such entity being a Subsidiary under the
foregoing definition do not exceed 10% of the interests in the
entity. 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 commercial), banker's acceptances, bank
guaranties, shipside bonds, surety bonds and similar
instruments.
"Swap Contract" means any agreement (including any
master agreement and any agreement, whether or not in
writing,
relating to any single transaction) that is an interest rate
swap agreement, basis swap, forward rate agreement, commodity
swap, commodity option, equity or equity index swap or option,
bond option, interest rate option, forward foreign exchange
agreement, rate cap, collar or floor agreement, currency swap
agreement, cross-currency rate swap agreement, swaption,
currency option or any other, similar agreement (including any
option to enter into any of the foregoing).
"Taxes" means any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of
each Bank and the Agent, fines, penalties, interest and
additions to tax arising from the action or inaction of such
Bank or Agent and such taxes (including income taxes or
franchise taxes) as are imposed on or measured by each Bank's
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, maintains a lending office or
would be subject to taxation if this Agreement were not in
effect.
"Termination Date" means the earlier to occur of:
(a) June 20, 2002; and
(b) the date on which the Commitments terminate
in
accordance with the provisions of this Agreement.
"Type" has the meaning specified in the definition of
"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 in
which
(other than directors' qualifying shares required by law) 100%
of the capital stock of each class having ordinary voting
power, and 100% of the capital stock 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.
1.2 Other Interpretive Provisions. (a) The meanings of
defined terms are equally applicable to the singular and
pluralforms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and
similar words refer to this Agreement as a whole and not to
anyparticular provision of this Agreement; and subsection,
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
amendments and other modifications thereto, but only to the
extent such amendments and other modifications are not
prohibited
by the terms of any Loan Document, 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.
1.3 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, consistently applied, except as otherwise required or
permitted by GAAP, or with respect to any financial statements
of
any insurance company, in accordance with SAP; provided,
however,
that the covenant set forth in Section 7.11(a) shall be
calculated on a basis consistent with the financial statements
referred to in Section 5.11(a) hereof.
(b) References herein to "fiscal year" and "fiscal
quarter" refer to such fiscal periods of the Company.
ARTICLE II
THE CREDITS
2.1 Amounts and Terms of Commitments. Each Bank
severally
agrees, on the terms and conditions set forth herein, to make
loans to the Company from time to time on any Business Day
during
the period from the Closing Date to the Termination Date, in
an
aggregate amount not to exceed at any time outstanding the
amount
set forth on Schedule 2.1 (such amount, as the same may be
reduced under Section 2.5 or as a result of one or more
assignments under Section 10.8, the Bank's "Commitment");
provided, however, that, after giving effect to any Borrowing,
the aggregate principal amount of all outstanding Loans shall
not
at any time exceed the combined Commitments. Within the
limits
of each Bank's Commitment, and subject to the other terms and
conditions hereof, the Company may borrow under this Section
2.1,
prepay under Section 2.6 and reborrow under this Section 2.1.
2.2 Loan Accounts. (a) The Loans made by each Bank
shall
be evidenced by one or more loan accounts or records
maintained
by such Bank in the ordinary course of business. The loan
accounts or records maintained by the Agent and each Bank
shall
be conclusive absent manifest error of the amount of the Loans
made by the Banks to 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.
(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 loan accounts. Each such Bank shall
endorse 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
endorse its Note(s) and each Bank's record shall be conclusive
absent manifest error; 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.
2.3 Procedure for Borrowing. (a) Each Borrowing shall
be
made upon the Company's irrevocable written notice delivered
to
the Agent in the form of a Notice of Borrowing, or (except for
the initial borrowing) the Company's telephonic notice to the
Agent, to be immediately confirmed in writing. Any such notice
must be received by the Agent prior to 10:00 a.m. Chicago time
(i) three Business Days prior to the requested Borrowing Date,
in
the case of Offshore Rate Loans, and (ii) on the requested
Borrowing Date, in the case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which
shall
be (i) in an aggregate minimum amount of $10,000,000 or any
multiple of $1,000,000 in excess thereof, in the case of
Offshore Rate Loans, and (ii) in an aggregate minimum amount
of
$5,000,000 or any multiple of $1,000,000 in excess thereof, in
the case of Base Rate Loans;
(B) the requested Borrowing Date, which
shall
be a Business Day;
(C) the Type of Loans comprising the
Borrowing; and
(D) with respect to Offshore Rate Loans,
the
duration of the Interest Period applicable to such 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
three months; 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 12:00 Noon
(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 BofA with the aggregate of the amounts made available to
the
Agent by the Banks and in immediately available funds.
(d) After giving effect to any Borrowing, there may
not
be more than five different Interest Periods in effect,
provided,
however, that until the first anniversary of the initial
Borrowing, there may be up to 12 Interest Periods in effect
2.4 Conversion and Continuation Elections. (a) The
Company
may, upon irrevocable written notice to the Agent in
accordance
with subsection 2.4(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 amount not less than
$5,000,000,
or that is in an integral multiple of $1,000,000 in excess
thereof) into Loans of the 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 $10,000,000, or that is in an integral multiple of
$1,000,000 in excess thereof); provided, that if at any time
the
aggregate amount of Offshore RateLoans in respect of any
Borrowing is reduced, by payment,prepayment, or conversion of
part thereof to be less than $10,000,000, such Offshore Rate
Loans shall automatically convert into Base Rate Loans.
(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) three 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 Conversion/Continuation Date, if the Loans are to
be
converted into Base Rate Loans, specifying:
(A) the proposed Conversion/Continuation
Date;
(B) the aggregate amount of Loans to be
converted or continued;
(C) the Type of Loans resulting from the
proposed conversion or continuation; and
(D) in the case of continuation of, or
conversion into, Offshore Rate Loans, the duration of the
requested Interest Period.
(c) If upon the expiration of any Interest Period
for
Offshore Rate Loans, the Company has failed to select timely a
new Interest Period to be applicable to such Offshore Rate
Loans,
the Company shall be deemed to have selected a one month
Interest
Period for such Offshore Rate Loan.
(d) If upon the expiration of any Interest Period
for
Offshore Rate Loans, any Default or Event of Default then
exists,
the Company shall be deemed to have elected to convert such
Offshore Rate Loans into Base Rate Loans effective as of the
expiration date of such Interest Period.
(e) 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
the respective outstanding principal amounts of the Loans with
respect to which the notice was given held by each Bank.
(f) Unless the Majority Banks otherwise agree,
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.
(g) After giving effect to any conversion or
continuation of Loans, there may not be more than five
different
Interest Periods in effect, provided, however, that until the
first anniversary of the initial Borrowing, there may be up to
12
Interest Periods in effect.
2.5 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 $10,000,000
or
any multiple of $1,000,000 in excess thereof; unless, after
giving effect thereto and to any prepayments of Loans made on
the
effective date thereof, the then-outstanding principal amount
of
the Loans would exceed the amount of the combined Commitments
then in effect. 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 facility fees to, but not including
the
effective date of any reduction or termination of Commitments,
shall be paid on the effective date of such reduction or
termination.
2.6 Optional Prepayments. Subject to Section 3.4, the
Company
may, at any time or from time to time, upon not less than one
Business Day's irrevocable notice to the Agent (in the case of
Base Rate Loans) or three Business Days' irrevocable notice to
the Agent (in the case of Offshore Rate Loans), ratably prepay
Loans in whole or in part, in minimum amounts of $5,000,000 or
any multiple of $1,000,000 in excess thereof. 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 3.4.
2.7 Mandatory Commitment Reductions; Mandatory Prepayments
of
Loans. The aggregate Commitments of the Banks shall be
reduced
to the following amounts on the following dates:
|
Date Maximum Aggregate Commitments
June 20, 1998 $225,000,000
June 20, 1999 $200,000,000
June 20, 2000 $175,000,000
June 20, 2001 $150,000,000
provided, however, that if the maximum aggregate Commitments
of
the Banks have previously been reduced to an amount less than
the
amount specified above by a permanent voluntary reduction
pursuant to Section 2.5 above, the maximum aggregate amount of
the Commitments shall remain as so reduced and shall not be
increased by reason of this Section. Once reduced in
accordance
with this Section, the Commitments may not be increased. Each
reduction of the Commitments shall be applied to each Bank
according to its Pro Rata Share. The Company shall immediately
prepay any Loans outstanding at any time in an amount equal to
the excess of such outstanding Loans over the amount of the
aggregate Commitments as so reduced.
2.8 Repayment. The Company shall repay to the Banks on
the
Termination Date the aggregate principal amount of Loans
outstanding on such date.
2.9 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 the Offshore Rate
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 2.4),
plus
the Applicable Margin.
(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 2.6 or 2.7 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 subsection (a) of this Section,
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 Loans, at a rate per annum which is
determined by adding 2% per annum to the Applicable Margin
then
in effect for such Loans; provided, however, that, on and
after
the expiration of any 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, bearinterest 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.
2.10 Fees. (a) Arrangement, Agency Fees. The Company
shall
pay an arrangement fee to the Arranger for the Arranger's own
account, and shall pay an agency fee to the Agent for the
Agent's
own account, as required by the letter agreement ("Fee
Letter")between the Company and the Arranger and Agent dated
May
27, 1997.
(b) Facility Fees. The Company shall pay to the
Agent
for the account of each Bank a facility fee on the average
daily
amount of such Bank's Commitment (whether or not used),
computed
on a quarterly basis in arrears on the last Business Day of
each
calendar quarter, equal to the percentage set forth in the
definition of Applicable Margin corresponding to the Claims
Paying Rating on such date. Such facility fee shall accrue
from
the Closing Date to the Termination Date and shall be due and
payable quarterly in arrears on the last Business Day of each
of
March, June, September and December, commencing on Closing
Date
through the Termination Date, with the final payment to be
made
on the Termination Date; provided that, in connection with any
reduction or termination of Commitments under Section 2.5 or
Section 2.7, the accrued facility 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
facility
fees provided in this subsection shall accrue at all times
after
the above-mentioned commencement date, including at any time
during which one or more conditions in Article IV are not met.
2.11 Computation of Fees and Interest. (a) All
computations
of interest for Base Rate Loans when the Base Rate is
determined
by BofA'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 thereofto 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
in
the absence of manifest error.
2.12 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
1:00 p.m. (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 1:00 p.m. (Chicago time) shall be deemed to
have
been received on the following Business Day and any applicable
interest or feeshall continue to accrue.
(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 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.
2.13 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 subsection (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;
provided, however, that the Agent may, solely at its option,
make
available a Loan to the Company in an amount not to exceed the
Pro Rata Share of such Bank and such Loan shall be payable to
the
Agent.
(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 Loanto be made by such other Bank on any Borrowing Date.
2.14 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 Pro Rata Share, such Bank shall immediately (a)
notify the Agent of such fact, and (b) purchase from the other
Banks such 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 10.9) 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
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 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) The Company agrees to indemnify and hold harmless
each Bank and the Agent for the full amount of Taxes or Other
Taxes (including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section) paid by
the
Bank or the Agent and any liability (including expenses,
penalties, fines, interest and additions to tax (except
expenses,
penalties, fines, interest and additions to tax arising as a
result of the action or inaction of the Agent or the
applicable
Bank)) arising therefrom or with respect thereto, whether or
not
such Taxes or Other 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 accompanied by a certificate showing in reasonable
detail the calculation of such amount.
(c) If the Company shall be required by law to deduct
or
withhold any Taxes or Other 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 an amount equal to the sum it would have
received 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, without duplication, at
the
time interest is paid, all additional amounts which the
respective Bank specifies as necessary to preserve the after-
tax
yield the Bank would have received if such Taxes or Other
Taxes
had not been imposed .
(d) Within 30 days after the date of any payment by
the
Company of Taxes or Other Taxes, the Company shall furnish the
Agent the original or a certified copy of a receipt evidencing
payment thereof, or other evidence of payment satisfactory to
the
Agent.
(e) If the Company is required to pay additional
amounts
to any Bank or the Agent pursuant to subsection (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 judgment of such Bank is not otherwise
disadvantageous to such Bank.
(f) Any Bank or Agent requesting a payment under this
Section 3.1 shall provide the Company a Certificate setting
forth
in reasonable detail the calculation of such payment.
3.2 Illegality. (a) If any Bank reasonably 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 reasonably 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 3.4, either on the
last day of the Interest 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 shall borrow from the affected Bank, in the amount
of
such repayment, a Loan at the Federal Funds Rate plus 0.50%
per
annum, with interest payable on the dates on which interest on
Base Rate Loans would be payable.
3.3 Increased Costs and Reduction of Return. (a) If any
Bank reasonably determines that, due to either (i) the
introduction of or any change (other than any change by way of
imposition of or increase in reserve requirements included in
the
calculation of the Offshore Rate) 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 direct cost to such Bank of
agreeing to make or making, funding or maintaining any
Offshore
Rate Loans (based on the assumption contained in the last
sentence of Section 3.4 hereof), 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, such additional amounts as are
sufficient
to compensate such Bank for such increased costs; provided,
however, that the Company shall be liable for increased costs
only if such costs are also charged to a significant number of
similarly situated borrowers.
(b) If any Bank shall have reasonably determined that
(i) the adoption 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 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 (accompanied by a
certificate showing in reasonable detail the calculation of
such
amount) 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; provided, however, that the Company shall
be
liable for costs incurred more than 60 days before such demand
was made only to the extent that such Bank made such demand
within 60 days after it became aware of such increase; and
further provided that, the Company shall be liable for
increased
costs only if such costs are also charged to a significant
number
of similarly situated borrowers.
3.4 Funding Losses. Upon five days notice by the relevant
Bank accompanied by a certificate showing in reasonable detail
the calculation of such amount, 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:
(a) the failure of the Company to make on a timely
basis
any payment of principal of any Offshore Rate Loan;
(b) 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;
(c) the failure of the Company to make any prepayment
in
accordance with any notice delivered under Section 2.6;
(d) the prepayment (including pursuant to Section
2.7)
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
(e) the automatic conversion under Section 2.4 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 subsection
3.3(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 LIBOR used in
determining the Offshore Rate for such Offshore Rate Loan by a
matching deposit or other borrowing in the interbank
eurodollar
market for a comparable amount and for a comparable period,
whether or not such Offshore Rate Loan is in fact so funded.
3.5 Inability to Determine Rates. If the Agent reasonably
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 subsection 2.9(a) for any
requested Interest Period with respect to a proposed Offshore
Rate Loan does not adequately and fairly reflect the cost to
BofA
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, as the case may be, 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
Loans at the Federal Funds Rate plus 0.50% per annum instead
of
Offshore Rate Loans with interest payable on the dates on
which
interest on Base Rate Loans would be payable.
3.6 Substitution of Banks. Upon the receipt by the
Company
from any Bank (an "Affected Bank") of a claim for compensation
under Section 3.1, 3.2 or 3.3, the Company may: (i) request
the
Affected Bank to use its best efforts to obtain a replacement
bank
or financial institution satisfactory to the Company to
acquire
and assume all or a ratable part of all of such Affected
Bank's
Loans and Commitment (a "Replacement Bank"); (ii) request one
more of the other Banks to acquire and assume all or part of
such
Affected
Bank's Loans and Commitment; or (iii) designate a Replacement
Bank. Any such designation of a Replacement Bank under clause
(i) or (iii) shall be subject to the prior written consent of
the
Agent (which consent shall not be unreasonably withheld or
delayed).
3.7 Survival. The agreements and obligations of the
Company
in this Article III shall survive the payment of all other
Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Conditions of Initial Loans. The obligation of each
Bank
to make its initial Loan hereunder is subject to the condition
that the Agent 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 executive
committee of the board of directors of the Company authorizing
the transactions contemplated hereby, certified as of the
Closing Date by the Secretary or an Assistant Secretary of the
Company; and
(ii) A certificate of the Secretary or Assistant
Secretary of the Company certifying the names and true
signatures of the officers of the Company 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
and the bylaws of the Company as in effect on the Closing
Date,
certified by the Secretary or Assistant Secretary of the
Company as of the Closing Date; and
(ii) a good standing certificate for the Company
from the Secretary of State (or similar, applicable
Governmental Authority) of its state of incorporation;
(d) Legal Opinion.
(i) an opinion of the general counsel of the
Company addressed to the Agent and the Banks, substantially
in
the form of Exhibit D;
(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 BofA to the extent invoiced prior to or on the
Closing
Date; including any such costs, fees and expenses arising
under
or referenced in Sections 2.10 and 10.4;
(f) Certificate. A certificate signed by a
Responsible
Officer or Assistant Treasurer of the Company, dated as of the
Closing Date, stating that:
(i) the representations and warranties contained
in
Article V are true and correct on and as of such date, as
though made on and as of such date;
(ii) no Default or Event of Default exists or
would
result from the initial Borrowing; and
(iii) there has occurred since December 31,
1996,
no event or circumstance that has resulted or would
reasonably
be expected to result in a Material Adverse Effect; and
(g) Other Documents. Such other approvals, opinions,
documents or materials as the Agent or any Bank may request.
4.2 Conditions to All Borrowings. The obligation of each
Bank to make any Loan to be made by it (including its initial
Loan, but not including any continuation or conversion) is
subject to the satisfaction of the following conditions
precedent
on the relevant Borrowing Date:
(a) Notice of Borrowing. The Agent shall have
received
(with, in the case of the initial Loan only, a copy for each
Bank) a Notice of Borrowing or telephonic notice as provided
in
Section 2.3 hereof;
(b) Continuation of Representations and Warranties.
The
representations and warranties in Article V shall be true and
correct on and as of such Borrowing Date with the same effect
as
if made on and as of such Borrowing 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
earlierdate); and
(c) No Existing Default. No Default or Event of
Default
shall exist or shall result from such Borrowing.
Each Notice of Borrowing 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, that the conditions in Section 4.2 are
satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each
Bank
that:
5.1 Corporate Existence and Power. The Company and each
of
its Significant 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, if any, 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.
5.2 Corporate Authorization; No Contravention. The
execution, delivery and performance by the Company of this
Agreement and each other Loan Document, have been duly
authorized
by all necessary corporate action, and do not and will not:
(a) contravene the terms of any of the Company's
Organization Documents;
(b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any
document
evidencing any Contractual Obligation to which the Company is
a
party or any order, injunction, writ or decree of any
Governmental Authority to which the Company or its property is
subject; or
(c) violate any Requirement of Law.
5.3 Governmental Authorization. Except for filings
required
to be made after the Closing Date (which the Company hereby
agrees to make), 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 of the Agreement or any other Loan
Document.
5.4 Binding Effect. This Agreement and each other Loan
Document to which the Company is a party constitute the legal,
valid and binding obligations of the Company, enforceable
against
the Company 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.
5.5 Litigation. Except as specifically disclosed in
Schedule
5.5, there are no actions, suits, proceedings, claims or
disputes
pending, or to the best knowledge of the Company, threatened,
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 this Agreement or any other
Loan
Document; or
(b) 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
borrowing or repaying of the Loans or 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.
5.6 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,
would 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 subsection 8.1(e).
5.7 ERISA Compliance. Except as specifically disclosed in
Schedule 5.7:
(a) Each Plan is in compliance in all material
respects
with the applicable provisions of ERISA, the Code and other
federal or state law to the extent noncompliance would
reasonably
be expected to have a Material Adverse Effect or to the extent
noncompliance would give rise to a Lien. 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, if the loss of such
qualification
would reasonably be expected to have a Material Adverse Effect
or
if the loss of such qualification would give rise to a Lien.
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) To the extent that any of the following would
reasonably be expected to have a Material Adverse Effect or to
the extent any of the following would give rise to a Lien, (i)
no
ERISA Event has occurred or is reasonably expected to occur;
(ii)
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); (iii) 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 (iv) neither the
Company nor any ERISA Affiliate has engaged in a transaction
that
could be subject to Section 4069 or 4212(c) of ERISA.
(d) No Pension Plan has any Unfunded Pension Liability in
excess of $20,000,000.
5.8 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 6.12 and Section 7.5. 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.
5.9 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 would not, individually or in the
aggregate, have a Material Adverse Effect. As of the Closing
Date, the property of the Company and its Subsidiaries is
subject
to no Liens, other than Permitted Liens.
5.10 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 that
would, if
made, have a Material Adverse Effect.
5.11 Financial Condition. (a) The audited consolidated
financial statements of the Company and its Subsidiaries dated
December 31, 1996, the unaudited financial statements of the
Company and its Subsidiaries dated March 31, 1997 and the
related
consolidated statements of income or operations, shareholders'
equity and cash flows for the periods ended on such dates:
(i) were prepared in accordance with GAAP,
consistently applied, except as otherwise required or
permitted
by GAAP, throughout the period covered thereby, except as
otherwise expressly noted therein with respect to material
changes, subject in the case of its March 31, 1997 statements
to ordinary, good faith year end audit adjustments and the
absence of complete footnotes;
(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 in accordance
with
GAAP, consistently applied, except as otherwise required or
permitted by GAAP; and
(iii) except as specifically disclosed in
Schedule
5.11, 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, all as
are required by GAAP.
(b) The Annual Statement of each of the Significant
Insurance Subsidiaries (including, without limitation, the
provisions made therein for investments and the valuation
thereof, reserves, policy and contract claims and statutory
liabilities) as filed with the Department, as of and for the
1996 Fiscal Year,(the "Statutory Financial Statements"), have
been prepared in
accordance with SAP, consistently applied, except as otherwise
required or permitted by SAP (except as noted therein with
respect to material changes). Each such Statutory Financial
Statement was in compliance with applicable law when filed.
The Statutory
Financial Statements fairly present the financial position,
the
results of operations and changes in equity of each such
Significant Insurance Subsidiary as of and for the respective
dates and periods indicated therein in accordance with SAP,
consistently applied,
except as otherwise required or permitted by SAP. Except for
liabilities and obligations, including, without limitation,
reserves, policy and contract claims and statutory liabilities
(all of which have been computed in accordance with SAP),
disclosed or provided for in the Statutory Financial
Statements, the Significant Insurance
Subsidiaries did not have, as of the respective dates of each
of
such financial statements, any liabilities or obligations
(whether absolute or contingent and whether due or to become
due)
which, in conformity with SAP (consistently applied, except as
otherwise required or permitted by SAP) would have been
required
to be disclosed or provided for in such financial statements.
All books of account, taken as a whole, of each of the
Significant Insurance Subsidiaries fully and fairly disclose
all
of the material transactions, properties, assets, investments,
liabilities and obligations of such Significant Insurance
Subsidiary and all of such books of account are in the
possession
of each such Significant Insurance Subsidiary and, taken as a
whole, are true, correct and complete in all material
respects.
(c) Since December 31, 1996, there has been no
Material
Adverse Effect.
5.12 Environmental Matters. Except as specifically
disclosed
in Schedule 5.12, there are no Environmental Claims which
would,
individually or in the aggregate, reasonably be expected to
have
a Material Adverse Effect.
5.13 Regulated Entities. None of the Company, any Person
controlling the Company, or any Subsidiary, is an "Investment
Company" within the meaning of the Investment Company Act of
1940. The Company is not subject to regulation under the
Public
Utility Holding Company Act of 1935, the Federal Power Act,
the
Interstate Commerce Act, any state public utilities code, or
any
other Federal or state statute or regulation limiting its
ability
to incur Indebtedness.
5.14 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 Requirement of Law, which would reasonably be expected to
have a Material Adverse Effect.
5.15 Copyrights, Patents, Trademarks and Licenses, etc.
The
Company or its Significant Subsidiaries own or are licensed or
otherwise have the right to use all of the patents,
trademarks,
service marks, trade names, copyrights, contractual
franchises,
authorizations and other rights that are reasonably necessary
for
the operation of 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 in a manner
which would reasonably be expected to have a Material Adverse
Effect. Except as specifically disclosed in Schedule 5.5, no
claim or litigation regarding any of the foregoing is pending
or
threatened, and no 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 either case, would reasonably be expected to have a
Material
Adverse Effect.
5.16 Subsidiaries. As of the Closing Date, the Company
has
no Subsidiaries other than those specifically disclosed in
part
(a) of Schedule 5.16 hereto and has no equity investments in
any
other corporation or entity other than those specifically
disclosed in part (b) of Schedule 5.16.
5.17 Insurance. Except as specifically disclosed in
Schedule
5.17, the properties of the Company and its Subsidiaries are
insured with insurance companies which the Company in good
faith
believes are financially sound and reputable insurance
companies
not Affiliates of the Company, in such amounts, with such
deductibles and covering such risks as the Company in good
faith
believes are customarily carried by companies engaged in
similar
businesses and owning similar properties in localities where
the
Company or such Subsidiary operates.
5.18 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.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or
any Loan or other Obligation shall remain unpaid or
unsatisfied,
unless the Majority Banks waive compliance in writing:
6.1 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 each Bank:
(a) as soon as available, but not later than 90 days
after the end of each fiscal year, a copy of the audited
consolidated balance sheet of the Company and its Subsidiaries
as
at the end of such year and the related consolidated
statements
of income or operations, 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 Price Waterhouse 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, consistently applied, except as otherwise required
or
permitted by GAAP and as otherwise noted therein. 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, a copy of the unaudited consolidated balance
sheet
of the Company and its Subsidiaries as of the end of such
quarter
and the related consolidated statements of income,
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, consistently applied, except as otherwise required or
permitted by GAAP (subject to ordinary, good faith year-end
audit
adjustments and the absence of complete footnotes), the
financial
position and the results of operations of the Company and the
Subsidiaries;
(c) as soon as available, but not later than 60 days
after the end of each fiscal year, a copy of the Annual
Statements of each Significant Insurance Subsidiary for such
fiscal year prepared in accordance with SAP and accompanied by
the certification of a Responsible Officer of such Significant
Insurance Subsidiary that such Annual Statement presents
fairly
in accordance with SAP the financial position of such
Significant
Insurance Subsidiary for the period then ended;
(d) as soon as possible, but no later than 45 days
after
the end of each of the first three fiscal quarters of each
fiscal
year, a copy of the quarterly statement of each Significant
Insurance Subsidiary for each such fiscal quarter, prepared in
accordance with SAP and accompanied by the certification of a
Responsible Officer of such Significant Insurance Subsidiary
that
such quarterly statement presents fairly in accordance with
SAP
the financial position of such Significant Insurance
Subsidiary
for the period then ended;
(e) as soon as available, a copy of any management
discussion and analysis filed with the Department with respect
to
any of the foregoing financial statements.
6.2 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 subsections 6.1(a) and (b), a
Compliance Certificate executed by a Responsible Officer;
(b) 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
Significant Insurance Subsidiary may make to, or file with,
the
SEC or any applicable Department in its state of domicile; and
(c) the following certificates and other information:
(i) within two Business Days of the receipt of
such
notice by a Responsible Officer, notice of the actual
suspension, termination or revocation of any material license
of the Company or any of its Significant Subsidiaries by any
Governmental Authority or notice from any Governmental
Authority notifying the Company or any of its Significant
Subsidiaries of a hearing relating to such a suspension,
termination or revocation, including any request by a
Governmental Authority which commits the Company or any of its
Significant Subsidiaries to take, or refrain from taking, any
action or which otherwise materially and adversely affects the
authority of the Company or any of its Significant
Subsidiaries
to conduct its business;
(ii) within two Business Days of the receipt of
such notice by a Responsible Officer, notice of any material
pending or threatened investigation or regulatory proceeding
(other than routine periodic investigations or reviews) by
any
Governmental Authority concerning the business, practices or
operations of the Company or any of its Significant
Subsidiaries; and
(iii) promptly upon the receipt of such notice
by a
Responsible Officer, notice of any actual material changes in
the Insurance Code governing the investment or dividend
practices of insurance companies domiciled in any of the
states
in which any Significant Insurance Subsidiary is domiciled.
(d) promptly, such additional information 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 reasonably request.
6.3 Notices. The Company shall promptly notify the Agent
and
each Bank:
(a) of any change in the Claims Paying Rating of
MGIC;
(b) of the occurrence of any Default or Event of
Default, and of the occurrence or existence of any event or
circumstance that foreseeably will become a Default or Event
of
Default;
(c) of any matter that has resulted or would
reasonably
be expected to result in a Material Adverse Effect, including,
if
that is the case (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;
(d) 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
(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.
(e) of any material change in accounting policies or
financial reporting practices by the Company or any of its
Significant Subsidiaries.
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 Significant Subsidiary proposes to
take with respect thereto and at what time. Each notice under
subsection 6.3(a) shall describe with particularity all
clauses
or provisions of this Agreement or other Loan Document that
have
been (or foreseeably will be) breached or violated, if any.
6.4 Preservation of Corporate Existence, Etc. The Company
shall, and shall cause each Significant 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 except in connection with
transactions permitted by Section 7.3;
(b) preserve and maintain in full force and effect
all
governmental rights, privileges, qualifications, permits,
licenses and franchises necessary to the normal conduct of its
business except in connection with transactions permitted by
Section 7.3;
(c) use reasonable efforts, in the ordinary course of
business, to preserve its business organization and goodwill;
provided, that the Company may make such changes to its
business
organization as it deems to be prudent or consistent with good
business practices; and
(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.
6.5 Maintenance of Property. The Company shall maintain,
and
shall cause each Significant 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 except where the failure to do so could not reasonably
be
expected to have a Material Adverse Effect.
6.6 Insurance. The Company shall maintain, and shall
cause
each Significant Subsidiary to maintain, with insurers that
the
Company in good faith believes are financially sound and
reputable independent insurers, insurance with respect to its
properties and business against loss or damage of the kinds
the
Company in good faith believes are customarily insured against
by
Persons engaged in the same or similar business, of such types
and in such amounts as the Company in good faith believes are
customarily carried under similar circumstances by such other
Persons.
6.7 Payment of Obligations. The Company shall, and shall
cause each Significant Subsidiary to, pay and discharge as the
same shall become due and payable, all their respective
obligations and liabilities (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 Significant
Subsidiary) including:
(a) all tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets;
(b) all lawful claims which, if unpaid, would by law
become a 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.
6.8 Compliance with Laws. The Company shall comply, and
shall cause each Subsidiary to comply, in all material
respects
with all Requirements of Law (including the Federal Fair Labor
Standards Act) of any Governmental Authority having
jurisdiction
over it or its business if noncompliance would reasonably be
expected to have a Material Adverse Effect, except such as may
be
contested in good faith or as to which a bona fide dispute may
exist.
6.9 Compliance with ERISA. The Company shall, and shall
cause each of its ERISA Affiliates, to the extent failure to
do
so would reasonably be expected to have a Material Adverse
Effect
or to the extent failure to do so would give rise to a Lien,
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;
and (c) make all required contributions to any Plan subject to
Section 412 of the Code.
6.10 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, as to
the
Company and its Subsidiaries taken as a whole, full, true and
correct entries in conformity with GAAP, consistently applied,
except as otherwise required or permitted by GAAP, 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 during normal business hours and
without
advance notice.
6.11 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, the
violation of which would have a Material Adverse Effect.
6.12 Use of Proceeds. The Company shall use the proceeds
of
the Loans for working capital and other general corporate
purposes not in contravention of any Requirement of Law or of
any
Loan Document, including repurchases of stock of the Company.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or
any Loan or other Obligation shall remain unpaid or
unsatisfied,
unless the Majority Banks waive compliance in writing:
7.1 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 existing on property of the Company or
any
Subsidiary on the Closing Date and set forth in Schedule 7.1
securing Indebtedness outstanding on such date;
(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 6.7, 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;
(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
Subsidiary 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
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, taken
together
with Liens described in subsections (j) and (k) hereof, do not
exceed $50,000,000;
(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 in any case materially detract from the value of the
property subject thereto or interfere with the ordinary
conduct
of the businesses of the Company and its Subsidiaries;
(i) 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;
(j) Liens arising in connection with capitalized
leases,
in aggregate amount at any time not, when taken together with
Liens under subsection (g) and (k) hereof, in excess of
$50,000,000;
(k) purchase money Liens in an aggregate amount at any
one time not, when taken together with Liens under subsection
(g)
and (j) hereof, in excess of $50,000,000;
(l) Liens on assets of any Acquired Subsidiary which
is
not a Significant Subsidiary, if such Liens do not extend to
any
assets of the Company or any Subsidiary that is not an
Acquired
Subsidiary;
(m) Liens on assets of any Subsidiary (other than
MGIC)
to secure Indebtedness to the Company or a Wholly-Owned
Subsidiary of the Company;
(n) Liens on properties acquired in the claims
settlement
process in the ordinary course of business of the Company and
its
Subsidiaries;
(o) any Lien arising under or as a result of any
reverse
repurchase agreements entered into by the Subsidiaries for
their
investment portfolios in the ordinary course of business; and
(p) deposits made by a Subsidiary which is an
insurance
company, or other statutory Lien against the assets of any
such
Subsidiary, in each case made or incurred in favor of
policyholders of such Subsidiary in the ordinary course of
business pursuant to insurance regulatory requirements.
7.2 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 material
property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the
foregoing, except:
(a) in the ordinary course of business, consistent
with
past practices;
(b) the sale or disposition of interests in Credit-
Based
Asset Servicing LLC, Xxxxxx Loan Servicing LP and Xxxxxx XX
LLC
(or successors thereto);
(c) the sale or disposition of assets with a market
value
in the aggregate, when taken together with amounts allowed
under
Section 7.3(f) hereof (without duplication), not to exceed
$75,000,000 from the date hereof until the Termination Date;
and
(d) other transactions permitted by Section 7.3.
7.3 Consolidations and Mergers. The Company shall not,
and
shall not suffer or permit any Significant 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 may merge with any one or more
Subsidiaries, 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;
(b) any Subsidiary may sell, convey, transfer, lease
or
otherwise dispose of all or substantially all of its assets
(upon
voluntary liquidation or otherwise), to the Company or another
Wholly-Owned Subsidiary;
(c) the Company may merge with any one or more
companies, provided that the Company shall be the continuing
or
surviving corporation;
(d) the Company or any Subsidiary may engage in a
merger
solely for the purposes of a change of domicile and/or changes
in
its articles of incorporation;
(e) any Subsidiary may merge with one or more
companies
provided that the continuing or surviving entity is owned,
directly or indirectly, by the Company in a percentage not
less
the percentage ownership of such Subsidiary by the Company
immediately prior to such merger; and
(f) the sale or disposition of assets with a market
value
in the aggregate, when taken together with amounts allowed
under
Section 7.2(c) hereof (without duplication), not to exceed
$75,000,000 from the date hereof until the Termination Date.
7.4 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 7.6;
(c) Swap Contracts entered into in the ordinary
course
of business as bona fide hedging transactions;
(d) Indebtedness under notes sold to customers of
MGIC
or another Subsidiary that bear interest based on the
performance
of loans originated or purchased by such customers and which
loans are insured with MGIC or another Subsidiary, if such
notes
are subordinated in form and substance satisfactory to the
Majority Banks;
(e) Indebtedness of Acquired Subsidiaries which are
not
Significant Subsidiaries, for so long as such Indebtedness is
not
guaranteed by and does not become the obligation of, the
Company
or a Subsidiary that is not an Acquired Subsidiary;
(f) Indebtedness in an aggregate amount at any one
time ,
when taken together with Contingent Obligations under Section
7.6(f) hereof (without duplication), not in excess of
$50,000,000;
(g) Indebtedness of any Subsidiary (other than MGIC)
held
solely by a Wholly-Owned Subsidiary or by the Company;
(h) Indebtedness consisting of Contingent Obligations
with respect to Surety Instruments issued in the ordinary
course
of insurance business of the Company or any Subsidiary; and
(i) Indebtedness consisting of guaranties of Credit-
Based Asset Servicing and Securitization LLC not in excess of
$10,000,000.
7.5 Use of Proceeds. The Company shall not, and shall not
suffer or permit any Subsidiary to, use any portion of the
Loan
proceeds in any manner which would conflict with Regulation U
of
the FRB.
7.6 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) Swap Contracts entered into in the ordinary
course
of business as bona fide hedging transactions;
(c) Contingent Obligations of Subsidiaries incurred
under any reinsurance agreement to which it is a party;
(d) Contingent Obligations of Subsidiaries in
connection
with guaranties of mortgage obligations in the ordinary course
of
business, including the obligations of up to $30,000,000
pursuant
to the transaction referred to on Schedule 7.1;
(e) Contingent Obligations consisting of guaranties
of
Credit-Based Asset Servicing and Securitization LLC, not in
excess of $10,000,000;
(f) Contingent Obligations in an aggregate amount at
any
one time, when taken together with Indebtedness under Section
7.4(f) hereof (without duplication), not in excess of
$50,000,000;
(g) Contingent Obligations of any Subsidiary (other
than
MGIC) (i) with respect to primary obligations of a Wholly-
Owned
Subsidiary or of the Company, or (ii) the obligee or potential
obligee of which is a Wholly-Owned Subsidiary or the Company;
(h) Contingent Obligations with respect to Surety
Instruments or financial guaranties issued in the ordinary
course
of insurance business of the Company or any Subsidiary; and
(i) Contingent Obligations of Acquired Subsidiaries
which are not Significant Subsidiaries, for so long as such
Contingent Obligations are not guaranteed by and do not become
the obligation of, the Company or a Subsidiary that is not an
Acquired Subsidiary.
7.7 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;
(c) capital leases other than those permitted under
clauses (a) and (c) 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 annual
rental payments for
all such capital leases shall not exceed in any fiscal year
$2,000,000.
7.8 ERISA. The Company shall not, and shall not suffer or
permit any of its ERISA Affiliates to: (a) engage in a
prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has
resulted
or could reasonably expected to result in liability of the
Company in an aggregate amount in excess of $20,000,000; or
(b)
engage in a transaction that could be subject to Section 4069
or
4212(c) of ERISA, to the extent that to do so would reasonably
be
expected to have a Material Adverse Effect or to the extent
that
to do so would give rise to a Lien.
7.9 Change in Business. The Company shall not, and shall
not
suffer or permit any Significant Subsidiary to, engage in any
material line of business substantially different from those
lines of business carried on by the Company and its
Subsidiaries
on the date hereof; provided, that any Subsidiary may engage
in
the home mortgage finance, financial guaranty and surety
businesses and other lines of business related thereto.
7.10 Accounting Changes. The Company shall not, and shall
not suffer or permit any Significant Subsidiary to, make any
significant change in accounting treatment or reporting
practices, except as required or permitted by GAAP or SAP, as
applicable, or change the fiscal year of the Company or of any
Significant Subsidiary.
7.11 Financial Covenants. The Company shall not permit:
(a) its consolidated stockholders' equity (as
determined
in accordance with GAAP) to be less than $900,000,000 at any
time;
or
(b) the Claims Paying Rating assigned to MGIC by
Standard
& Poor's Ratings Service to be less than "AA-".
ARTICLE VIII
EVENTS OF DEFAULT
8.1 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 (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
Document, is incorrect in any material respect on or as of the
datemade or deemed made; or
(c) Specific Defaults. The Company fails to perform
or
observe any term, covenant or agreement contained in any of
Section 6.1, 6.2, 6.3, 6.9, 7.2, 7.3, 7.4 or 7.11; or
(d) Other Defaults. The Company 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 date upon which
written notice thereof is given to the Company by the Agent or
any Bank; or
(e) Cross-Default. The Company or any Significant
Subsidiary (i) fails to make any payment in respect of any
Indebtedness or Contingent Obligation 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
$20,000,000 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 (ii) fails to perform or observe any other condition or
covenant, or any other event shall occur or condition exist,
under any agreement or instrument relating to any such
Indebtedness or Contingent Obligation, 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
(f) Insolvency; Voluntary Proceedings. The Company
or
any Significant 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 Significant 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 Significant
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 Significant 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 Significant 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 $20,000,000; (ii) the aggregate amount of Unfunded Pension
Liability among all Pension Plans at any time exceeds
$20,000,000; 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
$20,000,000; or
(i) Monetary Judgments. One or more non-
interlocutory
judgments, non-interlocutory orders, decrees or arbitration
awards is entered against the Company or any Significant
Subsidiary involving in the aggregate a liability (to the
extent
not covered by independent third-party insurance as to which
the
insurer does not dispute coverage) as to any single or related
series of transactions, incidents or conditions, of
$20,000,000
or more, and the same shall remain unsatisfied, unvacated and
unstayed pending appeal for a period of 90 days after the
entry
thereof, or at any time after the entry thereof the adverse
party
shall take any action to realize on such judgment, order,
decree
or award; or
(j) Non-Monetary Judgments. Any non-monetary
judgment,
order or decree is entered against the Company or any
Significant
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) Change of Control. There occurs any Change of
Control; or
(l) Loss of Licenses. Any Department or any other
Governmental Authority revokes or fails to renew any material
license, permit or franchise of the Company or any Significant
Insurance Subsidiary, or the Company or any Significant
Insurance
Subsidiary for any reason loses any material license, permit
or
franchise, or the Company or any Significant Insurance
Subsidiary
suffers the imposition of any restraining order, escrow,
suspension or impound of funds in connection with any
proceeding
(judicial or administrative) with respect to any material
license, permit or franchise; or
(m) Change in Law. Any change is made in the
Insurance
Code which affects the dividend practices of any Insurance
Subsidiary and which is reasonably likely to have a Material
Adverse Effect on the ability of the Company to perform its
obligations under the Agreement.
8.2 Remedies. If any Event of Default occurs and is
continuing, 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
to
be terminated, whereupon such commitments shall be terminated;
(b) 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 subsection (f) or (g) of Section 8.1 (in the case
of
clause (i) of subsection (g) upon the expiration of the 60-day
period mentioned therein), the obligation of each Bank to make
Loans 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 or any Bank.
8.3 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
provided by law or in equity, or under any other instrument,
document or agreement now existing or hereafter arising.
ARTICLE IX
THE AGENT
9.1 Appointment and Authorization. Each Bank hereby
irrevocably (subject to Section 9.9) appoints, designates and
authorizes the 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.
9.2 Delegation of Duties. The Agent may execute any of
its
duties under this Agreement or any other Loan Document by or
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.
9.3 Liability of Agent. None of the Agent-Related Persons
shall (i) be liable 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.
9.4 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.
(b) For purposes of determining compliance with the
conditions specified in Section 4.1, 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.
9.5 Notice of Default. The Agent shall not be deemed to
have
knowledge or notice of the occurrence of any Default or Event
of
Default, 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 VIII; 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.
9.6 Credit Decision. Each Bank acknowledges that none of
the
Agent-Related Persons has made any representation or warranty
toit, 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 hereunder. Each Bank also
represents that it will, independently and without reliance
upon
any Agent-Related Person and based onsuch 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 andother 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 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.
9.7 Indemnification. 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.
9.8 Agent in Individual Capacity. BofA 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 BofA were not the Agent
hereunder and without notice to or consent of the Banks. The
Banks acknowledge that, pursuant to such activities, BofA 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, BofA 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, and the terms "Bank" and "Banks"
include
BofA in its individual capacity.
9.9 Successor Agent. The Agent may, and at the request of
the Majority Banks shall, resign as Agent upon 30 days' notice
to
the Banks and the Company. 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
subject to the approval of the Company. If no successor agent
is
appointed prior to the effective date of the resignation of
the
Agent, the Agent may appoint, after consulting with the Banks
and
with the approval of 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 IX and Sections 10.4 and 10.5 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.
9.10 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 and the Company, 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,
properly completed IRS Forms 1001 and W-8 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 IRS Form W-9; 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.
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. If the forms or other documentation required by
subsection (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.
(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, 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
and
the Company 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 subsection shall survive
the
payment of all Obligations and the resignation or replacement
of
the Agent.
ARTICLE X
MISCELLANEOUS
10.1 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
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 8.2);
(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, including, without
limitation, mandatory prepayments required pursuant to Section
2.7;
(c) reduce the principal of, or the rate of interest
specified herein on any Loan, or (subject to clause (ii)
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 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 (ii) the Fee Letters may be amended,
or
rights or privileges thereunder waived, in a writing executed
by
the parties thereto.
10.2 Notices. (a) All notices, requests and other
communications shall be in writing (including, unless the
context
expressly otherwise provides, by facsimile transmission,
provided
that any matter transmitted by the Company by facsimile (i)
shall
be immediately confirmed by a telephone call to the recipient
at
the number specified on Schedule 10.2, 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 10.2; 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
delivered, upon delivery.
(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 reasonably appearing 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 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.
10.3 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 right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
10.4 Costs and Expenses. The Company shall:
(a) whether or not the transactions contemplated
hereby
are consummated, pay or reimburse BofA (including in its
capacity
as Agent) within five Business Days after demand (subject to
subsection 4.1(e)) for all costs and expenses incurred by BofA
(including in its capacity as Agent) 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 BofA (including in its capacity as Agent)
with
respect thereto; and
(b) pay or reimburse the Agent, the Arranger and each
Bank within five Business Days after demand (subject to
subsection 4.1(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).
10.5 Indemnity. Whether or not the transactions
contemplated
hereby are consummated, the Company shall indemnify 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 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 this Agreement or any document
contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any
such
Person under or in connection with any of the foregoing,
including with respect to any investigation, litigation or
proceeding (including any Insolvency Proceeding or appellate
proceeding) related to or arising out of this Agreement or the
Loans or the use of the proceeds thereof, whether or not any
Indemnified Person is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities"); provided, that
the
Company shall have no obligation hereunder to any Indemnified
Person with respect to Indemnified Liabilities resulting
solely
from the gross negligence or willful misconduct of such
Indemnified Person. Notwithstanding any of the foregoing, the
Company shall have no obligation to indemnify any Indemnified
Person: (a) for such Indemnified Person's willful violation of
banking laws or (b) with respect to Indemnified Liabilities
resulting from litigation between any Bank or Banks (qua
Banks,
and not including the Agent in its capacity as Agent) and any
other Bank or Banks (qua Banks, and not including the Agent in
its capacity as Agent). The agreements in this Section shall
survive payment of all other Obligations.
10.6 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.
10.7 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of
the
parties hereto and their respective permitted successors and
permitted 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.
10.8 Assignments, Participations, etc. (a) Any Bank may,
with the written consent of the Company (at all times other
than
during the existence of an Event of Default) and the Agent,
which
consent of the Company and the Agent shall not be unreasonably
withheld, at any time assign and delegate to one or more
Eligible
Assignees (provided that no written consent of the Company or
the
Agent 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 the other rights and
obligations of such Bank hereunder, in a minimum amount of
$10,000,000; 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 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 $3000.
(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
subsection
10.8(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 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
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 10.1. In the case of any such
participation, the Participant shall be entitled to the
benefit
of Sections 3.1, 3.3, 3.6 and 10.5 as though it were also a
Bank
hereunder, and 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 and during the
continuance
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 any 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 203.14, and such
Federal
Reserve Bank may enforce such pledge or security interest in
any
manner permitted under applicable law.
10.9 Confidentiality. Each Bank agrees that all
information
concerning the Company or its Subsidiaries that is furnished
or
has previously been furnished to the Agent or the Banks on
behalf
of the Company (herein collectively, the "Confidential
Information") in connection with this Agreement will be held
and
treated by the Agent, each Bank, their Affiliates and their
respective directors, officers, employees, advisors, agents or
representatives (collectively, the "Related Persons") in
confidence and will not, except as hereinafter provided,
without
the prior consent of the Company, be disclosed by the Agent or
the Banks in any manner whatsoever, in whole or in part, or be
used by the Agent or the Banks other than in connection with
this
Agreement; except to the extent such Confidential 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, 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, subject to the same
restrictions contained in this Section.
10.10 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.
10.11 Margin Stock Not Collateral. Each of the Banks
represents to the Agent and each of the other Banks that it in
good faith is not relying on margin stock (as such term is
defined in Regulation U of the FRB) as collateral in the
extension or maintenance of the credit provided for in this
Agreement.
10.12 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.
10.13 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.
10.14 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.
10.15 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.
10.16 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
AGENT
AND THE BANKS 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
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
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. THE COMPANY HEREBY CONSENTS TO
PERSONAL SERVICE IN THE STATE OF WISCONSIN BY ANY MEANS
PERMITTED
BY WISCONSIN LAW.
10.17 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.
10.18 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.
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.
MGIC INVESTMENT CORPORATION
By:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By:
Title:
BANK OF AMERICA ILLINOIS
By:
Title:
BANKERS TRUST COMPANY
By:
Title:
BANQUE NATIONALE DE PARIS
By:
Title:
FIRSTAR BANK MILWAUKEE, N.A.
By:
Title:
THE NORTHERN TRUST COMPANY
By:
Title:
NORWEST BANK WISCONSIN, N.A.
By:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By:
Title:
