EXHIBIT 10
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CREDIT AGREEMENT
Dated as of May 28, 1998
among
THE GUARANTEE LIFE COMPANIES INC.
and
GUARANTEE LIFE INSURANCE COMPANY
and
THE CHASE MANHATTAN BANK
CHASE SECURITIES INC.,
as Arranger
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[Ref. No. 6700-674]
TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
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SECTION 1.01. Defined Terms 3
SECTION 1.02. Terms Generally 17
ARTICLE II
The Credits
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SECTION 2.01. Commitments 18
SECTION 2.02. Loans 18
SECTION 2.03. Borrowing Procedure 19
SECTION 2.04. Evidence of Debt; Repayment of Loans; Amortization of Term Loans 20
SECTION 2.05. Fees 21
SECTION 2.06. Interest on Loans 22
SECTION 2.07. Default Interest 22
SECTION 2.08. Alternate Rate of Interest 22
SECTION 2.09. Termination and Reduction of Commitments 23
SECTION 2.10. Conversion and Continuation of Borrowings 23
SECTION 2.11. Prepayment 24
SECTION 2.12. Reserve Requirements; Change in Circumstances 25
SECTION 2.13. Change in Legality 26
SECTION 2.14. Indemnity 27
SECTION 2.15. Pro Rata Treatment 27
SECTION 2.16. Sharing of Setoffs 28
SECTION 2.17. Payments 28
SECTION 2.18. Taxes. 28
SECTION 2.19. Assignment of Commitments Under Certain Circumstances;
Duty to Mitigate. 31
ARTICLE III
Representations and Warranties
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SECTION 3.01. Organization; Powers 32
SECTION 3.02. Authorization 32
i
SECTION 3.03. Enforceability 32
SECTION 3.04. Governmental Approvals 32
SECTION 3.05. Financial Statements 33
SECTION 3.06. No Material Adverse Change 33
SECTION 3.07. Title to Properties; Possession Under Leases 33
SECTION 3.08. Subsidiaries 33
SECTION 3.09. Litigation; Compliance with Laws 34
SECTION 3.10. Agreements 34
SECTION 3.11. Federal Reserve Regulations 34
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act 34
SECTION 3.13. Use of Proceeds 34
SECTION 3.14. Tax Returns 35
SECTION 3.15. No Material Misstatements 35
SECTION 3.16. Employee Benefit Plans 35
SECTION 3.17. Pledge Agreement 35
SECTION 3.18 Year 2000 Compliance 36
ARTICLE IV
Conditions of Lending
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SECTION 4.01. All Borrowings 36
SECTION 4.02. Initial Borrowing 36
ARTICLE V
Affirmative Covenants
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SECTION 5.01. Existence; Businesses and Properties 39
SECTION 5.02. Insurance 39
SECTION 5.03. Obligations and Taxes 39
SECTION 5.04. Financial Statements, Reports, etc. 40
SECTION 5.05. Litigation and Other Notices 41
SECTION 5.06. Employee Benefits 41
SECTION 5.07. Maintaining Records; Access to Properties
and Inspections 42
SECTION 5.08. Use of Proceeds 42
SECTION 5.09. Tax Sharing and Other Arrangements. 42
SECTION 5.10. Further Assurances 42
ARTICLE VI
Negative Covenants
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ii
SECTION 6.01. Indebtedness 42
SECTION 6.02. Liens 43
SECTION 6.03. Sale and Lease-Back Transactions 44
SECTION 6.04. Mergers, Consolidations and Sales of Assets 44
SECTION 6.05. Restrictions on Ability of Subsidiaries to Pay Dividends 44
SECTION 6.06. Transactions with Affiliates 45
SECTION 6.07. Business of Parent, the Company and Subsidiaries 45
SECTION 6.08. Minimum Net Worth 45
SECTION 6.09. Leverage Ratio 45
SECTION 6.10. Interest Coverage Ratio 45
SECTION 6.11. Risk-Based Capital Ratio 45
SECTION 6.12. Preferred Stock. 45
SECTION 6.13. Tax Sharing and Other Arrangements. 45
SECTION 6.14 Trust Preferred Securities 46
ARTICLE VII
Events of Default 46
ARTICLE VIII
The Administrative Agent and the Collateral Agent 49
ARTICLE IX
Miscellaneous
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SECTION 9.01. Notices 51
SECTION 9.02. Survival of Agreement 52
SECTION 9.03. Binding Effect 52
SECTION 9.04. Successors and Assigns 66
SECTION 9.05. Expenses; Indemnity 70
SECTION 9.06. Right of Setoff 70
SECTION 9.07. Applicable Law 71
SECTION 9.08. Waivers; Amendment 71
SECTION 9.09. Interest Rate Limitation 72
SECTION 9.10. Entire Agreement 73
SECTION 9.11. WAIVER OF JURY TRIAL 73
SECTION 9.12. Severability 74
SECTION 9.13. Counterparts 74
SECTION 9.14. Headings 74
SECTION 9.15. Jurisdiction; Consent to Service of Process 74
SECTION 9.16 Parent Guarantee 75
iii
CONFORMED COPY
CREDIT AGREEMENT dated as of May 28, 1998, among THE GUARANTEE
LIFE COMPANIES INC., a Delaware corporation ("Parent"),
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GUARANTEE LIFE INSURANCE COMPANY, a Nebraska stock life
insurance company (the "Company") (each of Parent and the
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Company being called a "Borrower"), the Lenders (as defined in
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Article I), and THE CHASE MANHATTAN BANK, a New York banking
corporation, as administrative agent (in such capacity, the
"Administrative Agent") and as collateral agent (in
such capacity, the "Collateral Agent") for the Lenders.
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Pursuant to a Stock Purchase Agreement dated as of March 19, 1998 (the
"Purchase Agreement") among Parent, Ohio Farmers Insurance Company and Westfield
Life Insurance Company ("Westfield"), Parent intends, subject to the conditions
set forth in the Purchase Agreement, to acquire (the "Acquisition") all the
issued and outstanding capital stock of Westfield , for an aggregate
consideration of approximately $90,000,000 in cash and an additional $10,000,000
in shares of common stock of Parent (the "Purchase Price"). Parent has requested
the Lenders to extend credit (i) to it in the form of Term Loans (such term and
each other capitalized term used but not defined herein having the meaning given
it in Article I) in an aggregate principal amount of $90,0000,000 and (ii) to it
and the Company in the form of Revolving Loans at any time and from time to time
prior to the Revolving Maturity Date, in an aggregate principal amount at any
time outstanding not in excess of $50,000,000. The proceeds of the Term Loans
are to be used by Parent to pay the cash portion of the Purchase Price and
related fees and expenses in connection with the Acquisition, the payment of any
amounts owed under the Existing Credit Agreement and to pay off other existing
Indebtedness. The proceeds of the Revolving Loans are to be used solely for
general corporate purposes, including the funding of surplus infusions to
subsidiaries, acquisitions permitted hereunder, the payment of any amounts owed
under the Existing Credit Agreement and to pay off other existing Indebtedness.
The Lenders are willing to extend such credit to Parent and the
Company on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1
2
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
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shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
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"Acquisition" shall have the meaning assigned to such term in the
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Preamble to this Agreement.
"ABR Loan" shall mean any Loan bearing interest at the Alternate Base
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Rate in accordance with the provisions of Article II.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar
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Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the product of (a) the LIBO Rate
in effect for such Interest Period and (b) Statutory Reserves.
"Administrative Agent Fees" shall have the meaning assigned to such
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term in Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative
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Questionnaire in the form of Exhibit A.
"Affiliate" shall mean, when used with respect to a specified person,
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another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified.
"Aggregate Revolving Credit Exposure" shall mean the aggregate amount
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of the Lenders' Revolving Credit Exposures.
"Alternate Base Rate" shall mean, for any day, a rate per annum
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(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
(a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. If for any reason the Administrative
Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds Effective Rate
for any reason, including the inability or failure of the Administrative Agent
to obtain sufficient quotations in accordance with the terms of the definition
thereof, the Alternate Base Rate shall be determined without regard to clause
(b) of the preceding sentence until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be effective
on the effective date of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively. The term "Prime Rate" shall mean the rate of
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interest per annum publicly announced from time to time by the Administrative
Agent as its prime rate in effect at its principal office in New York City; each
change in the Prime Rate shall be effective on the date such change is publicly
announced as being effective. The term "Federal Funds Effective Rate" shall
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mean, for any day, the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if
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such rate is not so published for any day that is a Business Day, the average of
the quotations for the day for such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.
"A.M. Best Rating" shall mean for any date the most recent rating for
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the Company publicly announced by A.M. Best Company, Inc.
"Annual Statement" shall mean, with respect to any Insurance
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Subsidiary, the Annual Statement of such Insurance Subsidiary required to be
filed with the Applicable Insurance Regulatory Authority in accordance with
state law, including any exhibits, schedules, certificates or actuarial opinions
filed or delivered therewith.
"Applicable Insurance Regulatory Authority" shall mean, with respect
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to any Insurance Subsidiary, the insurance commission or similar Governmental
Authority located in the state in which such Insurance Subsidiary is domiciled
and any Federal insurance Governmental Authority.
"Applicable Rate" means, for any day (a) with respect to any
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Eurodollar Loan, the applicable rate per annum set forth below under the caption
"Adjusted Libor Margin", and (b) with respect to the Commitment Fees payable
hereunder, the applicable rate per annum set forth below under the caption
"Commitment Fee Rate", in each case based upon the Leverage Ratio as of the most
recent determination date and the A.M. Best Rating as of the date of
determination:
Leverage Ratio: Adjusted Libor Commitment Fee
-------------- Margin Rate
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A.M. Best A.M. Best A.M. Best
Rating of Rating A.M. Best Rating
"A" of "A-" or less Rating of "A" of "A-" or less
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Category 1 1.00% 1.50% 0.250% 0.300%
Greater than 0.35 to 1.0
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Category 2 0.875% 1.25% 0.225% 0.250%
Greater than 0.30 to 1.0 but
less than or equal to 0.35
to 1.0
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Category 3 0.625% 0.875% 0.200% 0.225%
Greater than 0.250 to 1.0
but less than or equal to
0.30 to 1.0
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Category 4 0.500% 0.750% 0.1875% 0.200%
Less than or equal to 0.250
to 1.0
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4
For purposes of the foregoing, (i) the Leverage Ratio shall be
determined as of the end of each fiscal quarter of Parent's fiscal year based
upon Parent's consolidated financial statements delivered pursuant to Section
5.04(a) or (b) and (ii) each change in the Applicable Rate resulting from a
change in the Leverage Ratio shall be effective during the period commencing on
and including the date of delivery to the Administrative Agent pursuant to
Section 5.04(a) or (b), as the case may be, of consolidated financial statements
of Parent indicating such change and ending on the date immediately preceding
the effective date of the next such change; provided that the Leverage Ratio
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shall be deemed to be in Category 1 (A) at any time that an Event of Default has
occurred and is continuing or (B) if Parent fails to deliver the consolidated
financial statements required to be delivered by it pursuant to Section 5.04(a)
or (b), during the period from the expiration of the time for delivery thereof
until such consolidated financial statements are delivered.
"Assessment Rate" shall mean for any date the annual rate (rounded
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upwards, if necessary, to the next 1/100 of 1%) most recently estimated by the
Administrative Agent as the then current net annual assessment rate that will be
employed in determining amounts payable by the Administrative Agent to the
Federal Deposit Insurance Corporation (or any successor thereto) for insurance
by such Corporation (or such successor) of time deposits made in dollars at the
Administrative Agent's domestic offices.
"Assignment and Acceptance" shall mean an assignment and acceptance
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entered into by a Lender and an assignee, and accepted by the Administrative
Agent, in the form of Exhibit B or such other form as shall be approved by the
Administrative Agent.
"Available Dividend Capacity" shall mean, on any date, the maximum
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amount of dividends that each Insurance Subsidiary which is a direct Subsidiary
of Parent would, in accordance with all laws and regulations promulgated by any
Applicable Insurance Regulatory Authority relating to such Insurance Subsidiary,
be permitted to pay (whether or not actually paid) on such date of
determination, such amount to be calculated as if such date of determination
were the last day of the fiscal year of such Insurance Subsidiary.
"Board" shall mean the Board of Governors of the Federal Reserve
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System of the United States of America.
"Borrowing" shall mean a group of Loans of a single Class and Type
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made by the Lenders on a single date and as to which a single Interest Period is
in effect.
"Borrowing Request" shall mean a request by a Borrower in accordance
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with the terms of Section 2.03 and substantially in the form of Exhibit C.
"Business Day" shall mean any day other than a Saturday, Sunday or day
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on which banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a Eurodollar Loan, the term
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"Business Day" shall also exclude any day on which banks are not open for
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dealings in dollar deposits in the London interbank market.
5
"Capital Lease Obligations" of any person shall mean the obligations
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of such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Equivalents" shall mean:
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(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in
each case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 180 days from the
date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from Standard & Poor's Ratings Service or
from Xxxxx'x Investors Service, Inc.;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within one year from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, any domestic office of any commercial bank organized
under the laws of the United States of America or any State thereof which
has a combined capital and surplus and undivided profits of not less than
$250,000,000; and
(d) other investment instruments approved in writing by the Required
Lenders and offered by financial institutions which have a combined capital
and surplus and undivided profits of not less than $250,000,000.
"Cash Sources" shall mean, for any period, (a) the sum of (without
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duplication) (i) the Available Dividend Capacity for such period, (ii)
Management Fees received by Parent during such period, (iii) Unconsolidated
Investment Income during such period and (iv) Tax Sharing Payments received from
all subsidiaries during such period minus (b) Tax Payments actually made by
Parent during such period.
A "Change in Control" shall be deemed to have occurred if (a) any
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person or group (within the meaning of Rule 13d-5 of the Securities Exchange Act
of 1934 as in effect on the date hereof) shall own directly or indirectly,
beneficially or of record, shares representing more than 20% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock of
Parent; (b) a majority of the seats (other than vacant seats) on the board of
directors of Parent shall at any time be occupied by persons who were neither
(i) nominated by the board of directors of Parent, nor (ii) appointed by
directors so nominated; (c) any change in control (or similar event, however
denominated) with respect to Parent or any Subsidiary shall occur under and as
defined in any indenture or agreement in respect of Indebtedness to which Parent
or any Subsidiary is a party; or (d) any person or group shall otherwise
directly or indirectly Control Parent.
6
"Class", when used in reference to any Loan or Borrowing, refers to
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whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans
or Term Loans and, when used in reference to any Commitment, refers to whether
such Commitment is a Revolving Commitment or Term Commitment.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
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time to time.
"Collateral" shall mean all the "Collateral" as defined in the Pledge
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Agreement and the collateral account established pursuant to Article VII(d), if
any.
"Commitment" means a Revolving Commitment or Term Commitment, or any
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combination thereof (as the context requires).
"Commitment Fee" shall have the meaning assigned to such term in
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Section 2.05(a).
"Company Action Level Risk-Based Capital" shall mean, as to any
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Insurance Subsidiary, the greater of such Insurance Subsidiary's Company Action
Level Risk-Based Capital (i) as defined in the Risk-Based Capital for Insurers
Model Act adopted by the NAIC and (ii) as determined by any Applicable Insurance
Regulatory Authority.
"Consolidated Interest Expense" shall mean, for any period, the sum of
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all interest that is accrued or that is, or in accordance with GAAP should be,
capitalized with respect to Indebtedness of Parent and its consolidated
subsidiaries during such period (whether or not actually paid during such
period).
"Consolidated Net Income" with respect to any person for any period
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shall mean (a) the aggregate net income (or net loss) of such person for such
period equal to net revenues and other proper income or gain of such person for
such period (including gains on the sale of capital assets) less, without
duplication of any items deducted in determining such net revenues, income or
gain, the aggregate for such person during such period of, (i) cost of goods
sold, (ii) interest expense, (iii) operating expense, (iv) selling, general and
administrative expenses, (v) taxes, (vi) depreciation, depletion and
amortization and (vii) any other items that are treated as expenses under GAAP,
plus (b) write-downs of assets, losses from discontinued operations and other
extraordinary losses (net of tax benefits), in each case to the extent taken
into account in determining the net revenues, income or gain referred to in (a)
above.
"Consolidated Net Worth" shall mean, at any time (a) the sum of (i)
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Parent's issued capital stock taken at par or stated value at such time, (ii)
Parent's capital surplus at such time and (iii) Parent's retained earnings at
such time, less (b) Parent's treasury stock and minority
interest in subsidiaries at such time, all determined in accordance with GAAP;
provided that Consolidated Net Worth shall be calculated without giving effect
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to Statement of Financial Accounting Standards No. 115 as issued by the
Financial Accounting Standards Board.
7
"Consolidated Total Capitalization" shall mean, at any time, the sum
---------------------------------
(without duplication) of (i) Parent's Consolidated Total Debt, (ii) Consolidated
Net Worth and (iii) the aggregate principal amount of all outstanding Trust
Preferred Securities to the extent such principal amount is not included in
Consolidated Total Debt.
"Consolidated Total Debt" shall mean, at any time, the sum of (without
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duplication) (i) all Indebtedness of Parent and its consolidated Subsidiaries,
computed and consolidated in accordance with GAAP and (ii) the aggregate
principal amount of all outstanding Trust Preferred Securities to the extent
such principal amount exceeds 15% of Consolidated Total Capitalization
calculated including such principal amount, both determined as of such time.
"Control" shall mean the possession, directly or indirectly, of the
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power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and "Controlling" and "Controlled" shall have meanings correlative
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thereto.
"Default" shall mean any event or condition which upon notice, lapse
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of time or both would constitute an Event of Default.
"dollars" or "$" shall mean lawful money of the United States of
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America.
"Effective Date" shall mean the date of satisfaction or waiver of all
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conditions to effectiveness specified in Section 4.02.
"environment" shall mean ambient air, surface water and groundwater
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(including potable water, navigable water and wetlands), the land surface or
subsurface strata, the workplace or as otherwise defined in any Environmental
Law.
"Environmental Law" shall mean any and all applicable current and
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future treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the management,
Release or threatened Release of any Hazardous Material or to health and safety
matters.
"ERISA" shall mean the Employee Retirement Income Security Act of
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1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
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incorporated) that, together with Parent, is treated as a single employer under
Section 414(b) or (c) of the Code, or solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under Section
414 of the Code.
"ERISA Event" shall mean (a) any "reportable event", as defined in
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Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan; (b) the adoption of any amendment to a Plan that would require the
provision of security pursuant to Section 401(a)(29) of the Code or Section 307
of ERISA; (c) the existence with respect to any Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (d) the filing
8
pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (e) the incurrence of any liability under Title IV of ERISA with respect
to the termination of any Plan or the withdrawal or partial withdrawal of Parent
or any of its ERISA Affiliates from any Plan or Multiemployer Plan; (f) the
receipt by Parent or any ERISA Affiliate from the PBGC or a plan administrator
of any notice relating to the intention to terminate any Plan or Plans or to
appoint a trustee to administer any Plan; (g) the receipt by Parent or any ERISA
Affiliate of any notice concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA; (h) the occurrence
of a "prohibited transaction" with respect to which Parent or any of its
Subsidiaries is a "disqualified person" (within the meaning of Section 4975 of
the Code) or with respect to which Parent or any such Subsidiary could otherwise
be liable; and (i) any other event or condition with respect to a Plan or
Multiemployer Plan that could reasonably be expected to result in liability of
Parent.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
--------------------
Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate
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determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in
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Article VII.
"Existing Credit Agreement" means the Credit Agreement dated as of
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December 2, 1997, among Parent, the Company, each of the lenders that are
signatories thereto and The Chase Manhattan Bank, as administrative agent for
the lenders party thereto.
"Fees" shall mean the Commitment Fees and the Administrative Agent's
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Fees.
"Financial Officer" of any corporation shall mean the chief financial
-----------------
officer, principal accounting officer, Treasurer or Controller of such
corporation.
"GAAP" shall mean generally accepted accounting principles applied on
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a consistent basis.
"Governmental Authority" shall mean any Federal, state, local or
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foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Guarantee" of or by any person shall mean any obligation, contingent
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or otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
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manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase or lease property,
9
securities or services for the purpose of assuring the owner of such
Indebtedness of the payment of such Indebtedness or (c) to maintain working
capital, equity capital or any other financial statement condition or liquidity
of the primary obligor so as to enable the primary obligor to pay such
Indebtedness; provided, however, that the term Guarantee shall not include (i)
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endorsements for collection or deposit in the ordinary course of business or
(ii) the guarantee by Parent of the Obligations of the Company pursuant to
Section 9.16 hereof.
"Hazardous Materials" shall mean all explosive or radioactive
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substances or wastes, hazardous or toxic substances or wastes, pollutants,
solid, liquid or gaseous wastes, including petroleum or petroleum distillates,
asbestos or asbestos-containing materials, polychlorinated biphenyls ("PCBs") or
PCB-containing materials or equipment, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Indebtedness" of any person shall mean, without duplication, (a) all
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obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are customarily paid, (d) all obligations of such
person under conditional sale or other title retention agreements relating to
property or assets purchased by such person, (e) all obligations of such person
issued or assumed as the deferred purchase price of property or services
(excluding trade accounts payable and accrued obligations incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
person, whether or not the obligations secured thereby have been assumed, (g)
all Guarantees by such person of Indebtedness of others, (h) all Capital Lease
Obligations of such person, (i) all obligations of such person in respect of
interest rate protection agreements, foreign currency exchange agreements or
other interest or exchange rate hedging arrangements and (j) all obligations of
such person as an account party in respect of letters of credit and bankers'
acceptances; provided that Indebtedness shall not include any obligations with
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respect to Trust Preferred Securities. The Indebtedness of any person shall
include the Indebtedness of any partnership in which such person is a general
partner.
"Insurance Regulatory Information System" shall mean the Insurance
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Regulatory Information System promulgated by the NAIC, or any successor system
promulgated by the NAIC.
"Insurance Subsidiaries" shall mean the Company, Westfield and any
----------------------
other Subsidiary, whether now owned or hereafter acquired, that is regulated, in
accordance with applicable state law or any Federal law, as an insurer by an
insurance commission or similar Governmental Authority located in the state in
which such Subsidiary is domiciled or by any Federal insurance Governmental
Authority.
"Interest Payment Date" shall mean, with respect to any Loan, the last
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day of the Interest Period applicable to the Borrowing of which such Loan is a
part and, in the case of a Eurodollar Borrowing with an Interest Period of more
than three months' duration, each day that would have been an Interest Payment
Date had successive Interest Periods of three months' duration been applicable
to such Borrowing, and, in addition, the
10
date of any prepayment of such Borrowing or conversion of such Borrowing to a
Borrowing of a different Type.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing, the
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period commencing on the date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the
applicable Borrower may elect and (b) as to any ABR Borrowing, the period
commencing on the date of such Borrowing and ending on the earliest of (i) the
next succeeding March 31, June 30, September 30 or December 31, (ii) the
Revolving Maturity Date or the Term Loan Maturity Date, as applicable, and (iii)
the date such Borrowing is converted to a Borrowing of a different Type in
accordance with Section 2.10 or repaid or prepaid in accordance with Section
2.11; provided, however, that if any Interest Period would end on a day other
-------- -------
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day.
Interest shall accrue from and including the first day of an Interest Period to
but excluding the last day of such Interest Period.
"Lenders" shall mean (a) the financial institutions listed on Schedule
-------
2.01 (other than any such financial institution that has ceased to be a party
hereto pursuant to an Assignment and Acceptance) and (b) any financial
institution that has become a party hereto pursuant to an Assignment and
Acceptance.
"Leverage Ratio" means, on any date, the ratio of (a) Consolidated
--------------
Total Debt as of such date to (b) Consolidated Total Capitalization as of such
date.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing, the
---------
rate (rounded upwards, if necessary, to the next 1/16 of 1%) at which dollar
deposits approximately equal in principal amount to, the Administrative Agent's
portion of such Eurodollar Borrowing and for a maturity comparable to such
Interest Period are offered to the principal London office of the Administrative
Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed
----
of trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"Loan Documents" shall mean this Agreement and the Pledge Agreement.
--------------
"Loans" shall mean the loans made by the Lenders to any Borrower
-----
pursuant to Section 2.01. Each Loan shall be a Eurodollar Loan or an ABR Loan.
"Management Fees" shall mean all fees actually received by Parent for
---------------
management services rendered or to be rendered to the Subsidiaries.
11
"Margin Stock" shall have the meaning assigned to such term in
------------
Regulation U.
"Material Adverse Effect" shall mean (a) a materially adverse effect
-----------------------
on the business, assets, operations, prospects or condition, financial or
otherwise, of Parent, the Company and the Subsidiaries taken as a whole, (b)
material impairment of the ability of Parent or the Company to perform any of
its obligations under any Loan Document to which it is or will be a party or (c)
material impairment of the rights of or benefits available to the Lenders under
any Loan Document.
"Material Insurance Subsidiary" shall mean, on any date, any Insurance
-----------------------------
Subsidiary (i) the gross revenues from which during any of the four completed
fiscal quarters immediately preceding such date comprised at least 10% of
Parent's gross revenues from all Insurance Subsidiaries for such quarter or
quarters or (ii) the assets of which on such date comprise at least 10% of the
assets of all Insurance Subsidiaries on such date.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
------------------
Section 4001(a)(3) of ERISA.
"NAIC" shall mean the National Association of Insurance Commissioners
----
or any association or Governmental Authority succeeding to any or all of the
functions of the National Association of Insurance Commissioners.
"Net Proceeds" means, with respect to any event (a) the cash proceeds
------------
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses paid by Parent and its Subsidiaries
to third parties (other than Affiliates) in connection with such event, (ii) in
the case of a sale or other disposition of an asset (including pursuant to a
casualty or condemnation), the amount of all payments required to be made by
Parent and its Subsidiaries as a result of such event to repay Indebtedness
(other than Loans) secured by such asset or otherwise subject to mandatory
prepayment as a result of such event, and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) by Parent and its Subsidiaries, and the
amount of any reserves established by Parent and the Subsidiaries to fund
contingent liabilities reasonably estimated to be payable, in each case during
the year that such event occurred or the next succeeding year and that are
directly attributable to such event (as determined reasonably and in good faith
by the chief financial officer of Parent).
"Obligations" shall mean (a) the due and punctual payment by the
-----------
Borrowers of (i) the principal of and premium, if any, and interest (including
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise and (ii) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether
12
allowed or allowable in such proceeding), of the Borrowers to the
Secured Parties under the Credit Agreement and the other Loan Documents and (b)
the due and punctual performance of all covenants, agreements, obligations and
liabilities of the Borrowers under or pursuant to the Credit Agreement and the
other Loan Documents .
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
----
and defined in ERISA.
"Permitted Acquisition" shall mean an acquisition of any assets of, or
---------------------
any shares or other equity interests in, a person or division or line of
business of any person in the life and health insurance underwriting or related
businesses (a "Life Insurance Business") (except to the extent all Loans then
-----------------------
outstanding incurred for acquisitions of non-Life Insurance Businesses (each, a
"Non-Life Insurance Business") do not exceed $5,000,000) if immediately after
---------------------------
giving effect thereto: (a) no Default or Event of Default shall have occurred
and be continuing, and no material adverse change shall have occurred; (b) the
Life Insurance Business or Non-Life Insurance Business is owned (i) in the case
of the acquisition of any shares or equity interests, by Parent, and such shares
or equity interests have been validly pledged to secure the Obligations or (ii)
in the case of the acquisition of assets, by Parent or by an existing Life
Insurance Business or Non-Life Insurance Business the shares or equity interests
of which have been validly pledged to secure the Obligations; (c) the Life
Insurance Business or Non-Life Insurance Business so acquired shall not have, or
be associated with, any outstanding debt except to the extent such debt,
together with all other debt of Parent and the Subsidiaries, is permitted under
Section 6.01 hereof (unless consented to by all the Lenders prior to the date of
such Permitted Acquisition); (d) the acquisition shall have been on a "friendly"
basis, all regulatory approvals required therefor shall have been obtained and
all transactions related thereto shall have been consummated in accordance with
applicable laws and regulations (including margin regulations); and (e) Parent
shall on or prior to the making of such acquisition have delivered to the
Administrative Agent an officer's certificate certifying that such acquisition
will qualify as a Permitted Acquisition.
"person" shall mean any natural person, corporation, business trust,
------
joint venture, association, company, partnership or government, or any agency or
political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other than a
----
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreement" shall mean the Pledge Agreement, substantially in
----------------
the form of Exhibit D, between Parent and the Collateral Agent for the benefit
of the Secured Parties.
13
"Prepayment Event" means:
----------------
(a) any sale, transfer or other disposition (including pursuant to a
sale and leaseback transaction other than the sale and leaseback of the
Company's home office campus located at 8801, 8805 and 0000 Xxxxxx Xxxxx
Xxxxx in Omaha, Nebraska and any contiguous real estate) of any property or
asset of Parent or any Subsidiary, other than in the ordinary course of
business; or
(b) the issuance by Parent or any Subsidiary of any equity securities,
or the receipt by Parent or any Subsidiary of any capital contribution,
other than (i) any such issuance of equity securities to, or receipt of any
such capital contribution from, Parent or a Subsidiary, (ii) any such
issuance of equity securities, pursuant to a Permitted Acquisition, to the
holders of the equity securities of the person acquired in such Permitted
Acquisition, and (iii) any issuance of Trust Preferred Securities to the
extent permitted by Section 6.14; or
(c) the incurrence by Parent or any Subsidiary of any Indebtedness
other than Indebtedness incurred hereunder.
"Purchase Agreement" shall have the meaning given to such term in the
------------------
Preamble to this Agreement.
"Purchase Price" shall have the meaning given to such term in the
--------------
Preamble to this Agreement.
"Quarterly Statement" shall mean, with respect to any Insurance
-------------------
Subsidiary, the Quarterly Statement of such Insurance Subsidiary required to be
filed with the Applicable Insurance Regulatory Authority in accordance with
state law, including any exhibits, schedules, certificates or actuarial opinions
filed or delivered therewith.
"Register" shall have the meaning given such term in Section 9.04(d).
--------
"Regulation U" shall mean Regulation U of the Board as from time to
------------
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
------------
time in effect and all official rulings and interpretations thereunder or
thereof.
"Release" shall mean any spilling, leaking, pumping, pouring,
-------
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing, depositing, dispersing, emanating or migrating of any Hazardous
Material in, into, onto or through the environment.
"Required Lenders" shall mean, at any time, Lenders having Loans and
----------------
unused Commitments representing at least 51% of the sum of all Loans outstanding
and unused Commitments at such time.
"Responsible Officer" of any corporation shall mean any executive
-------------------
officer or Financial Officer of such corporation and any other officer or
similar official thereof
14
responsible for the administration of the obligations of such corporation in
respect of this Agreement.
"Restricted Subsidiary" shall mean any direct subsidiary of Parent.
---------------------
"Revolving Commitment" shall mean, with respect to each Lender, the
--------------------
commitment of such Lender to make Revolving Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Commitment, as applicable, as the same may be (a) reduced from time
to time pursuant to Section 2.09 or pursuant to Section 2.19 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04.
"Revolving Credit Exposure" shall mean, with respect to any Lender at
-------------------------
any time, the aggregate principal amount at such time of all outstanding
Revolving Loans of such Lender.
"Revolving Lender" means a Lender with a Revolving Commitment or, if
----------------
the Revolving Commitments have terminated or expired, a Lender with Revolving
Loans.
"Revolving Loan" means a Loan made pursuant to clause (b) of Section
--------------
2.01.
"Revolving Maturity Date" means May 28, 2003.
-----------------------
"SAP" means statutory accounting principles consistently applied.
---
"Secured Parties" shall have the meaning assigned to such term in the
---------------
Pledge Agreement.
"Statement of Actuarial Opinion" shall mean, with respect to any
------------------------------
Insurance Subsidiary, the Statement of Actuarial Opinion required to be filed
with the Applicable Insurance Regulatory Authority in accordance with state law
or, if such Applicable Insurance Regulatory Authority shall no longer require
such a statement, information equivalent to that required to be included in the
Statement of Actuarial Opinion that was filed immediately prior to the time such
statement was no longer required.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
------------------
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative Agent or any Lender (including any branch,
Affiliate, or other fronting office making or holding a Loan) is subject for
Eurocurrency Liabilities (as defined in Regulation D of the Board). Such
reserve percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute Eurocurrency Liabilities and to
be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
15
"subsidiary" shall mean, with respect to any person (herein referred
----------
to as the "parent"), any corporation, partnership, association or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any determination
is being made, owned, controlled or held, or (b) that is, at the time any
determination is made, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
"Subsidiary" shall mean any subsidiary of Parent.
----------
"Term Commitment" means, with respect to each Lender, the commitment,
---------------
if any, of such Lender to make a Term Loan hereunder as set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Lender assumed
its Term Commitment, as applicable, expressed as an amount representing the
maximum principal amount of the Term Loan to be made by such Lender hereunder,
as such commitment may be (a) reduced from time to time pursuant to Section 2.09
and (b) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 9.04.
"Term Lender" means a Lender with a Term Commitment or an outstanding
-----------
Term Loan.
"Term Loan Maturity Date" means May 28, 2004.
-----------------------
"Term Loan" means a Loan made pursuant to clause (a) of Section 2.01.
---------
"Total Adjusted Capital" shall mean, as to any Insurance Subsidiary,
----------------------
the lesser of such Insurance Subsidiary's Total Adjusted Capital (i) as defined
in the Risk-Based Capital for Insurers Model Act adopted by the NAIC and (ii) as
determined by any Applicable Insurance Regulatory Authority.
"Total Revolving Commitment" shall mean, at any time, the aggregate
--------------------------
amount of the Revolving Commitments, as in effect at such time.
"Transactions" shall have the meaning assigned to such term in Section
------------
3.02.
"Trust Preferred Securities" shall mean any trust preferred securities
--------------------------
issued by any Subsidiary which are structurally or otherwise subordinated to the
Obligations.
"Type", when used in respect of any Loan or Borrowing, shall refer to
----
the Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof, the term "Rate" shall
----
include the Adjusted LIBO Rate and the Alternate Base Rate.
"Unconsolidated Investment Income" shall mean, as to Parent for any
--------------------------------
period, all cash income received by Parent during such period from investments
held by Parent during such period, other than from (i) stock or other equity
interests of any
16
Insurance Subsidiary or (ii) any assets used or useful in the business of Parent
or any Insurance Subsidiary.
"Westfield" shall have the meaning given to such term in the Preamble
---------
to this Agreement.
"wholly owned subsidiary" of any person shall mean a subsidiary of
-----------------------
such person of which securities (except for directors' qualifying shares) or
other ownership interests representing 100% of the equity are, at the time any
determination is being made, owned, controlled or held by such person or one or
more wholly owned subsidiaries of such person or by such person and one or more
wholly owned subsidiaries of such person.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as
--------------------
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply
----------------
equally to both the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including"
shall be deemed to be followed by the phrase "without limitation". All
references herein to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, (a) any reference in this Agreement to any Loan
Document shall mean such document as amended, restated, supplemented or
otherwise modified from time to time and (b) all terms of an accounting or
financial nature shall be construed in accordance with GAAP or, to the extent
such terms apply to an Insurance Subsidiary, SAP, in each case as in effect from
time to time; provided, however, that, for purposes of determining the Leverage
-------- -------
Ratio and determining compliance with any covenant set forth in Article VI, all
accounting terms shall be interpreted and all accounting determinations
hereunder shall be made in accordance with GAAP or SAP, as applicable, as in
effect on the date of this Agreement, in each case applied on a basis consistent
with the application used in preparing Parent's and the Insurance Subsidiaries'
audited financial statements referred to in Section 3.05, or the Insurance
Subsidiaries' financial statements most recently filed as of the date hereof
with their respective Applicable Insurance Regulatory Authorities, as the case
may be.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments. Subject to the terms and conditions and relying
------------
upon the representations and warranties herein set forth, each Lender agrees,
severally and not jointly, (a) to make a Term Loan to Parent on the Effective
Date in a principal amount not exceeding its Term Loan Commitment, and (b) to
make Revolving Loans to the Borrowers, at any time and from time to time on or
after the Effective Date, and until
17
the earlier of the Revolving Maturity Date and the termination of the Revolving
Commitment of such Lender in accordance with the terms hereof, in an aggregate
principal amount at any time outstanding that will not result in (i) such
Lender's Revolving Credit Exposure exceeding (ii) such Lender's Revolving
Commitment. Within the limits set forth in clause (b) of the preceding sentence
and subject to the terms, conditions and limitations set forth herein, the
Borrowers may borrow, pay or prepay and reborrow Revolving Loans. Amounts repaid
in respect of Term Loans may not be reborrowed.
SECTION 2.02. Loans. (a) Each Loan shall be made as part of a Borrowing
------
consisting of Loans of the same Class and Type made by the Lenders to a single
Borrower ratably in accordance with their respective Commitments of the
applicable Class; provided, however, that the failure of any Lender to make any
-------- -------
Loan shall not in itself relieve any other Lender of its obligation to lend
hereunder (it being understood, however, that no Lender shall be responsible for
the failure of any other Lender to make any Loan required to be made by such
other Lender). The Loans comprising any Borrowing shall be in an aggregate
principal amount that is (i) an integral multiple of $1,000,000 and not less
than $5,000,000 or (ii) equal to the remaining available balance of the
applicable Commitments.
(b) Subject to Sections 2.08 and 2.13, each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the applicable Borrower
may request pursuant to Section 2.03. Each Lender may at its option make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
--------
affect the obligation of the applicable Borrower to repay such Loan in
accordance with the terms of this Agreement. Borrowings of more than one Type
and Class may be outstanding at the same time; provided, however, that no
-------- -------
Borrower shall be entitled to request any Borrowing that, if made, would result
in more than three Eurodollar Borrowings outstanding hereunder at any time. For
purposes of the foregoing, Borrowings having different Interest Periods,
regardless of whether they commence on the same date, shall be considered
separate Borrowings.
(c) Each Lender shall make each Loan to be made by it hereunder on
the proposed date thereof by wire transfer of immediately available funds, to
such account in New York City as the Administrative Agent may designate, not
later than 11:00 a.m., New York City time, and the Administrative Agent shall by
12:00 (noon), New York City time, credit the amounts so received to an account
in the name of the applicable Borrower, maintained with the Administrative Agent
and designated by the applicable Borrower in the applicable Borrowing Request
or, if a Borrowing shall not occur on such date because any condition precedent
herein specified shall not have been met, return the amounts so received to the
respective Lenders.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above and the Administrative Agent may, in
reliance upon such assumption, make available to the applicable Borrower on such
date a corresponding amount. If the Administrative Agent
18
shall have so made funds available then, to the extent that such Lender shall
not have made such portion available to the Administrative Agent, such Lender
and such Borrower severally agree to repay to the Administrative Agent forthwith
on demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to such Borrower until the date such
amount is repaid to the Administrative Agent at (i) in the case of such
Borrower, the interest rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Lender, a rate determined by the
Administrative Agent to represent its cost of overnight or short-term funds
(which determination shall be conclusive absent manifest error). If such Lender
shall repay to the Administrative Agent such corresponding amount, such amount
shall constitute such Lender's Loan as part of such Borrowing for purposes of
this Agreement.
(e) Notwithstanding any other provision of this Agreement, no
Borrower shall be entitled to request any Borrowing if the Interest Period
requested with respect thereto would end after the Revolving Maturity Date or
the Term Loan Maturity Date, as applicable.
SECTION 2.03. Borrowing Procedure. In order to request a Borrowing, the
--------------------
requesting Borrower shall hand deliver or telecopy to the Administrative Agent a
duly completed Borrowing Request (a) in the case of a Eurodollar Borrowing, not
later than 11:00 a.m., New York City time, three Business Days before a proposed
Borrowing, and (b) in the case of an ABR Borrowing, not later than 12:00 noon,
New York City time, one Business Day before a proposed Borrowing. Each
Borrowing Request shall be irrevocable, shall be signed by or on behalf of such
Borrower and shall specify the following information: (i) whether the Borrowing
then being requested is to be comprised of Term Loans or Revolving Loans; (ii)
whether the Borrowing then being requested is to be a Eurodollar Borrowing or an
ABR Borrowing; (iii) the date of such Borrowing (which shall be a Business Day);
(iv) the number and location of the account to which funds are to be disbursed
(which shall be an account that complies with the requirements of Section
2.02(c)); (v) the amount of such Borrowing; and (vi) if such Borrowing is to be
a Eurodollar Borrowing, the Interest Period with respect thereto; provided,
--------
however, that, notwithstanding any contrary specification in any Borrowing
-------
Request, each requested Borrowing shall comply with the requirements set forth
in Section 2.02. If no election as to the Type of Borrowing is specified in any
such notice, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period with respect to any Eurodollar Borrowing is specified in any
such notice, then the applicable Borrower shall be deemed to have selected an
Interest Period of one month's duration. The Administrative Agent shall
promptly advise the Lenders of any notice given pursuant to this Section 2.03
(and the contents thereof), and of each Lender's portion of the requested
Borrowing.
SECTION 2.04. Evidence of Debt; Repayment of Loans; Amortization of Term
----------------------------------------------------------
Loans. (a) Each Borrower hereby unconditionally promises to pay (i) to the
------
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Revolving Loan of such Lender made to such Borrower on the
Revolving Maturity Date and (ii) to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Term Loan of such Lender
made to such Borrower as provided in paragraph (f) below.
19
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of each Borrower to such
Lender resulting from each Loan made by such Lender from time to time, including
the amounts of principal and interest payable and paid such Lender from time to
time under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from each Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder from each Borrower and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) above shall be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided, however, that the failure
-------- -------
of any Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of any Borrower to repay
the Loans in accordance with their terms.
(e) Notwithstanding any other provision of this Agreement, in the
event any Lender shall request and receive a promissory note payable to such
Lender and its registered assigns, the interests represented by such note shall
at all times (including after any assignment of all or part of such interests
pursuant to Section 9.04) be represented by one or more promissory notes payable
to the payee named therein or its registered assigns.
(f) Subject to adjustment pursuant to paragraph (g) below, Parent
shall repay Borrowings of Term Loans on each date set forth below in the
aggregate principal amount set forth opposite such date:
Date Amount
---- ------
September 30, 1998 $3,750,000
December 31, 1998 $3,750,000
March 31, 1999 $3,750,000
June 30, 1999 $3,750,000
September 30, 1999 $3,750,000
December 31, 1999 $3,750,000
March 31, 2000 $3,750,000
June 30, 2000 $3,750,000
September 30, 2000 $3,750,000
December 31, 2000 $3,750,000
March 31, 2001 $3,750,000
June 30, 2001 $3,750,000
September 30, 2001 $3,750,000
December 31, 2001 $3,750,000
March 31, 2002 $3,750,000
June 30, 2002 $3,750,000
September 30, 2002 $3,750,000
20
December 31, 2002 $3,750,000
March 31, 2003 $3,750,000
June 30, 2003 $3,750,000
September 30, 2003 $3,750,000
December 31, 2003 $3,750,000
March 31, 2004 $3,750,000
Term Loan Maturity
Date $3,750,000
All Term Loans outstanding on the Term Loan Maturity Date shall be due and
payable on such date.
(g) Prepayments of Term Loans pursuant to paragraphs (c) and (d) of
Section 2.11 shall be applied to reduce the remaining scheduled payments due
under paragraph (g) above in the inverse order of maturity. Prepayments of Term
Loans pursuant to paragraph (a) of Section 2.11 shall be applied to reduce the
remaining scheduled payments due under paragraph (g) above pro rata.
SECTION 2.05. Fees. (a) Parent agrees to pay to each Revolving Lender,
-----
through the Administrative Agent, on the last day of March, June, September and
December in each year, and on the date on which the Revolving Commitment of such
Lender shall expire or be terminated as provided herein, a commitment fee (a
"Commitment Fee"), which shall accrue at the Applicable Rate on the average
---------------
daily amount of the unused Revolving Commitment of such Lender during the
preceding quarter (or shorter period commencing with the date of this Agreement
or ending with the Revolving Maturity Date or the date on which the Revolving
Commitment of such Lender shall expire or be terminated). All Commitment Fees
shall be computed on the basis of the actual number of days elapsed in a year of
360 days. The Commitment Fee due to each Lender shall commence to accrue on the
date of this Agreement and shall cease to accrue on the date on which the
Revolving Commitment of such Lender shall expire or be terminated as provided
herein.
(b) Parent agrees to pay to the Administrative Agent, for its own
account, the fees set forth in the fee letter dated March 18, 1998, between the
Borrowers and the Administrative Agent at the times and in the amounts specified
therein (the "Administrative Agent Fees").
-------------------------
(c) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders. Once paid, none of the Fees shall be refundable under any
circumstances.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of Section
------------------
2.07, the Loans comprising each ABR Borrowing shall bear interest (computed on
the basis of the actual number of days elapsed over a year of 365 or 366 days,
as the case may be, when the Alternate Base Rate is determined by reference to
the Prime Rate and over a year of 360 days at all other times) at a rate per
annum equal to the Alternate Base Rate.
21
(b) Subject to the provisions of Section 2.07, the Loans comprising
each Eurodollar Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.
(c) Interest on each Loan shall be payable on the Interest Payment
Dates applicable to such Loan except as otherwise provided in this Agreement.
The applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest
Period or day within an Interest Period, as the case may be, shall be determined
by the Administrative Agent, and such determination shall be conclusive absent
manifest error.
SECTION 2.07. Default Interest. If any Borrower shall default in the
-----------------
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, by acceleration or otherwise, or under any other Loan Document,
such Borrower shall on demand from time to time pay interest, to the extent
permitted by law, on such defaulted amount to but excluding the date of actual
payment (after as well as before judgment) (a) in the case of overdue principal,
at the rate otherwise applicable to such Loan pursuant to Section 2.06 plus
2.00% per annum and (b) in all other cases, at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days, as
the case may be, when determined by reference to the Prime Rate and over a year
of 360 days at all other times) equal to the sum of the Alternate Base Rate plus
2.00%.
SECTION 2.08. Alternate Rate of Interest. In the event, and on each
---------------------------
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined that dollar deposits in the principal amounts of the Loans comprising
such Borrowing are not generally available in the London interbank market, or
that the rates at which such dollar deposits are being offered will not
adequately and fairly reflect the cost to any Lender of making or maintaining
its Eurodollar Loan during such Interest Period, or that reasonable means do not
exist for ascertaining the Adjusted LIBO Rate, the Administrative Agent shall,
as soon as practicable thereafter, give written or telecopy notice of such
determination to the applicable Borrower and the Lenders. In the event of any
such determination, until the Administrative Agent shall have advised such
Borrower and the Lenders that the circumstances giving rise to such notice no
longer exist, any request by any Borrower for a Eurodollar Borrowing pursuant to
Section 2.03 or 2.10 shall be deemed to be a request for an ABR Borrowing. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The Revolving
-----------------------------------------
Commitments shall automatically terminate on the Revolving Maturity Date. The
Term Commitments shall automatically terminate at 5:00 p.m., New York City time,
on the Effective Date.
(b) Upon at least three Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, Parent may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Revolving Commitments; provided, however, that (i) each partial reduction of the
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Revolving Commitments shall be in an integral multiple of $1,000,000 and in a
minimum amount of
22
$5,000,000 and (ii) the Total Revolving Commitment shall not be reduced to an
amount that is less than the Aggregate Revolving Credit Exposure at the time.
(c) Each reduction in the Revolving Commitments hereunder shall be
made ratably among the Lenders in accordance with their respective Revolving
Commitments. Parent shall pay to the Administrative Agent for the account of
the applicable Lenders, on the date of each termination or reduction, the
Commitment Fees on the amount of the Revolving Commitments so terminated or
reduced accrued to but excluding the date of such termination or reduction.
SECTION 2.10. Conversion and Continuation of Borrowings. Each Borrower
------------------------------------------
shall with respect to any Borrowing for its account have the right at any time
upon prior irrevocable notice to the Administrative Agent (a) not later than
12:00 (noon), New York City time, one Business Day prior to conversion, to
convert any such Eurodollar Borrowing into an ABR Borrowing of the same Class,
(b) not later than 10:00 a.m., New York City time, three Business Days prior to
conversion or continuation, to convert any such ABR Borrowing into a Eurodollar
Borrowing of the same Class or to continue any Eurodollar Borrowing as a
Eurodollar Borrowing of the same Class for an additional Interest Period, and
(c) not later than 10:00 a.m., New York City time, three Business Days prior to
conversion, to convert the Interest Period with respect to any such Eurodollar
Borrowing to another permissible Interest Period, subject in each case to the
following:
(i) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of the Loans
comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting Borrowing
shall satisfy the limitations specified in Sections 2.02(a) and 2.02(b)
regarding the principal amount and maximum number of Borrowings of the
relevant Type;
(iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the new
Loan of such Lender resulting from such conversion and reducing the Loan
(or portion thereof) of such Lender being converted by an equivalent
principal amount; accrued interest on any Eurodollar Loan (or portion
thereof) being converted shall be paid by the applicable Borrower at the
time of conversion;
(iv) if any Eurodollar Borrowing is converted at a time other than the
end of the Interest Period applicable thereto, the applicable Borrower
shall pay, upon demand, any amounts due to the Lenders pursuant to Section
2.14;
(v) any portion of a Borrowing maturing or required to be repaid in
less than one month may not be converted into or continued as a Eurodollar
Borrowing;
(vi) any portion of a Eurodollar Borrowing that cannot be converted
into or continued as a Eurodollar Borrowing by reason of the immediately
preceding
23
clause shall be automatically converted at the end of the Interest Period
in effect for such Borrowing into an ABR Borrowing; and
(vii) upon notice to Parent from the Administrative Agent given at the
request of the Required Lenders, after the occurrence and during the
continuance of a Default or Event of Default, no outstanding Loan may be
converted into, or continued as, a Eurodollar Loan.
Each notice pursuant to this Section 2.10 shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and amount of the
Borrowing that the applicable Borrower requests be converted or continued, (ii)
whether such Borrowing is to be converted to or continued as a Eurodollar
Borrowing or an ABR Borrowing, (iii) if such notice requests a conversion, the
date of such conversion (which shall be a Business Day) and (iv) if such
Borrowing is to be converted to or continued as a Eurodollar Borrowing, the
Interest Period with respect thereto. If no Interest Period is specified in any
such notice with respect to any conversion to or continuation as a Eurodollar
Borrowing, the applicable Borrower shall be deemed to have selected an Interest
Period of one month's duration. The Administrative Agent shall advise the
Lenders of any notice given pursuant to this Section 2.10 and of each Lender's
portion of any converted or continued Borrowing. If the applicable Borrower
shall not have given notice in accordance with this Section 2.10 to continue any
Borrowing into a subsequent Interest Period (and shall not otherwise have given
notice in accordance with this Section 2.10 to convert such Borrowing), such
Borrowing shall, at the end of the Interest Period applicable thereto (unless
repaid pursuant to the terms hereof), automatically be continued into a new
Interest Period as an ABR Borrowing.
SECTION 2.11. Prepayment. (a) Each Borrower shall have the right at any
-----------
time and from time to time to prepay any Borrowing for its account, in whole or
in part, upon at least three Business Days' prior written or telecopy notice (or
telephone notice promptly confirmed by written or telecopy notice) to the
Administrative Agent before 11:00 a.m., New York City time; provided, however,
-------- -------
that each partial prepayment shall be in an amount that is an integral multiple
of $1,000,000 and not less than $5,000,000.
(b) In the event of any termination of all the Revolving Commitments,
each Borrower shall repay or prepay all its outstanding Borrowings of Revolving
Loans on the date of such termination. In the event of any partial reduction of
the Revolving Commitments, then (i) at or prior to the effective date of such
reduction or termination, the Administrative Agent shall notify Parent and the
Lenders of the Aggregate Revolving Credit Exposure after giving effect thereto
and (ii) if the Aggregate Revolving Credit Exposure would exceed the Total
Revolving Commitment after giving effect to such reduction or termination, then
Parent shall, or shall cause the Company to, on the date of such reduction or
termination, repay or prepay Borrowings of Revolving Loans in an amount
sufficient to eliminate such excess.
(c) In the event and on each occasion that any Net Proceeds are
received by or on behalf of Parent after the Effective Date from the issuance of
debt securities (including any issuance of Trust Preferred Securities and any
issuance of debt securities under Section 6.01(d)), then Parent shall, within
three Business Days after such Net Proceeds are received, prepay Borrowings of
Term Loans in an aggregate amount equal to 100% of such Net Proceeds.
24
(d) In the event that any Term Loans remain outstanding after
December 1, 1998, then on each occasion that any Net Proceeds are received by or
on behalf of Parent or any Subsidiary in respect of any Prepayment Event (other
than any Prepayment Event described in 2.11(c) above), Parent shall, within
three Business Days after such Net Proceeds are received, prepay Borrowings of
Term Loans in an aggregate amount equal to 100% of such Net Proceeds.
(e) Each notice of prepayment shall specify the prepayment date and
the principal amount of each Borrowing (or portion thereof) to be prepaid, shall
be irrevocable and shall commit the applicable Borrower to prepay such Borrowing
by the amount stated therein on the date stated therein. All prepayments under
this Section 2.11 shall be subject to Section 2.14 but otherwise without premium
or penalty. All prepayments under this Section 2.11 shall be accompanied by
accrued interest on the principal amount being prepaid to the date of payment.
SECTION 2.12. Reserve Requirements; Change in Circumstances. (a)
----------------------------------------------
Notwithstanding any other provision of this Agreement, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender of the
principal of or interest on any Eurodollar Loan made by such Lender or any Fees
or other amounts payable hereunder (other than changes in respect of taxes
imposed on the overall net income of such Lender by the jurisdiction in which
such Lender has its principal office or by any political subdivision or taxing
authority therein), or shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of or credit extended by any Lender (except any such reserve
requirement which is reflected in the Adjusted LIBO Rate) or shall impose on
such Lender or the London interbank market any other condition affecting this
Agreement or Eurodollar Loans made by such Lender, and the result of any of the
foregoing shall be to increase the cost to such Lender of making or maintaining
any Eurodollar Loan or to reduce the amount of any sum received or receivable by
such Lender hereunder (whether of principal, interest or otherwise) by an amount
deemed by such Lender to be material, then Parent will pay to such Lender upon
demand such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered.
(b) If any Lender shall have determined that the adoption after the
date hereof of any law, rule, regulation, agreement or guideline regarding
capital adequacy, or any change after the date hereof in any such law, rule,
regulation, agreement or guideline (whether such law, rule, regulation,
agreement or guideline has been adopted) or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or any Lender's holding company with any request
or directive regarding capital adequacy (whether or not having the force of law)
of any Governmental Authority has or would have the effect of reducing the rate
of return on such Lender's capital or on the capital of such Lender's holding
company, if any, as a consequence of this Agreement or the Loans made by such
Lender pursuant hereto to a level below that which such Lender or such Lender's
holding company could have achieved but for such applicability, adoption, change
or compliance (taking into consideration such Lender's
25
policies and the policies of such Lender's holding company with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time Parent shall pay to such Lender such additional amount or amounts
as will compensate such Lender or such Lender's holding company for any such
reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company as specified in
paragraph (a) or (b) above shall be delivered to Parent and shall be conclusive
absent manifest error. Parent shall pay such Lender the amount shown as due on
any such certificate delivered by it within 10 days after its receipt of the
same.
(d) Failure or delay on the part of any Lender to demand compensation
for any increased costs or reduction in amounts received or receivable or
reduction in return on capital shall not constitute a waiver of such Lender's
right to demand such compensation. The protection of this Section shall be
available to each Lender regardless of any possible contention of the invalidity
or inapplicability of the law, rule, regulation, agreement, guideline or other
change or condition that shall have occurred or been imposed.
SECTION 2.13. Change in Legality. (a) Notwithstanding any other provision
-------------------
of this Agreement, if, after the date hereof, any change in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to Parent and to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not thereafter
(for the duration of such unlawfulness) be made by such Lender hereunder
(or be continued for additional Interest Periods and ABR Loans will not
thereafter (for such duration) be converted into Eurodollar Loans),
whereupon any request for a Eurodollar Borrowing (or to convert an ABR
Borrowing to a Eurodollar Borrowing or to continue a Eurodollar Borrowing
for an additional Interest Period) shall, as to such Lender only, be deemed
a request for an ABR Loan (or a request to continue an ABR Loan as such for
an additional Interest Period or to convert a Eurodollar Loan into an ABR
Loan, as the case may be), unless such declaration shall be subsequently
withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar Loans
made by it be converted to ABR Loans, in which event all such Eurodollar
Loans shall be automatically converted to ABR Loans as of the effective
date of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(b) For purposes of this Section 2.13, a notice to Parent by any
Lender shall be effective as to each Eurodollar Loan made by such Lender, if
lawful, on the last
26
day of the Interest Period currently applicable to such Eurodollar Loan; in all
other cases such notice shall be effective on the date of receipt by Parent.
SECTION 2.14. Indemnity. Parent shall indemnify each Lender against any
----------
loss or expense that such Lender may sustain or incur as a consequence of (a)
any event, other than a default by such Lender in the performance of its
obligations hereunder, which results in (i) such Lender receiving or being
deemed to receive any amount on account of the principal of any Eurodollar Loan
prior to the end of the Interest Period in effect therefor, (ii) the conversion
of any Eurodollar Loan to an ABR Loan, or the conversion of the Interest Period
with respect to any Eurodollar Loan, in each case other than on the last day of
the Interest Period in effect therefor, or (iii) any Eurodollar Loan to be made
by such Lender (including any Eurodollar Loan to be made pursuant to a
conversion or continuation under Section 2.10) not being made after notice of
such Loan shall have been given by the applicable Borrower hereunder (any of the
events referred to in this clause (a) being called a "Breakage Event") or (b)
--------------
any default in the making of any payment or prepayment required to be made
hereunder. In the case of any Breakage Event, such loss shall include an amount
equal to the excess, as reasonably determined by such Lender, of (i) its cost of
obtaining funds for the Eurodollar Loan that is the subject of such Breakage
Event for the period from the date of such Breakage Event to the last day of the
Interest Period in effect (or that would have been in effect) for such Loan over
(ii) the amount of interest likely to be realized by such Lender in redeploying
the funds released or not utilized by reason of such Breakage Event for such
period. A certificate of any Lender setting forth any amount or amounts which
such Lender is entitled to receive pursuant to this Section 2.14 shall be
delivered to Parent and shall be conclusive absent manifest error.
SECTION 2.15. Pro Rata Treatment. Except as required under Section 2.13,
-------------------
each Borrowing, each payment or prepayment of principal of any Borrowing, each
payment of interest on the Loans, each payment of the Commitment Fees, each
reduction of the Commitments and each conversion of any Borrowing to or
continuation of any Borrowing as a Borrowing of any Type shall be allocated pro
rata among the Lenders in accordance with their respective Commitments of the
applicable Class (or, if such Commitments shall have expired or been terminated,
in accordance with the respective principal amounts of their outstanding Loans
of the applicable Class), and any temporary misallocation, however arising, will
be remedied by the proper reallocation of future payments as and when received
by the Agent. Each Lender agrees that in computing such Lender's portion of any
Borrowing to be made hereunder, the Administrative Agent may, in its discretion,
round each Lender's percentage of such Borrowing to the next higher or lower
whole dollar amount.
SECTION 2.16. Sharing of Setoffs. Each Lender agrees that if it shall,
-------------------
through the exercise of a right of banker's lien, setoff or counterclaim against
any Borrower, or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, obtain
payment (voluntary or involuntary) in respect of any Loan or Loans as a result
of which the unpaid principal portion of its Loans shall be proportionately less
than the unpaid principal portion of the Loans of any other Lender, it shall be
deemed simultaneously to have purchased from such other Lender at face value,
and shall promptly pay to such other Lender the purchase price for, a
participation in the
27
Loans of such other Lender, so that the aggregate unpaid principal amount of the
Loans and participations in Loans held by each Lender shall be in the same
proportion to the aggregate unpaid principal amount of all Loans then
outstanding as the principal amount of its Loans prior to such exercise of
banker's lien, setoff or counterclaim or other event was to the principal amount
of all Loans outstanding prior to such exercise of banker's lien, setoff or
counterclaim or other event; provided, however, that if any such purchase or
-------- -------
purchases or adjustments shall be made pursuant to this Section 2.16 and the
payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery and
the purchase price or prices or adjustment restored without interest. Each
Borrower expressly consents to the foregoing arrangements and agrees that any
Lender holding a participation in a Loan deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by such Borrower to such Lender by reason
thereof as fully as if such Lender had made a Loan directly to such Borrower in
the amount of such participation.
SECTION 2.17. Payments. (a) Each Borrower shall make each payment
---------
(including principal of or interest on any Borrowing or any Fees or other
amounts) hereunder and under any other Loan Document not later than 12:00
(noon), New York City time, on the date when due in immediately available
dollars, without setoff, defense or counterclaim. Each such payment shall be
made to the Administrative Agent at its offices at 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or Fees, if applicable.
SECTION 2.18. Taxes. (a) Any and all payments by any Borrower hereunder
------
and under any other Loan Document shall be made, in accordance with Section
2.17, free and clear of and without deduction for any and all current or future
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding (i) income taxes imposed on the net income of
---------
the Administrative Agent or any Lender (or any transferee or assignee thereof,
including a participation holder (any such entity a "Transferee")) and (ii)
----------
franchise taxes imposed on the net income of the Administrative Agent or any
Lender (or Transferee), in each case by the jurisdiction under the laws of which
the Administrative Agent or such Lender (or Transferee) is organized or any
political subdivision thereof (all such nonexcluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities, collectively or individually,
being called "Taxes"). If any Borrower shall be required to deduct any Taxes
-----
from or in respect of any sum payable hereunder or under any other Loan Document
to the Administrative Agent or any Lender (or any Transferee), (i) the sum
payable shall be increased by the amount (an "additional amount") necessary so
-----------------
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.18) the Administrative Agent or
such Lender (or Transferee), as the case may be, shall receive an amount equal
to the sum it would have received had no such deductions been made, (ii) such
Borrower shall make such deductions and (iii) such Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
28
(b) In addition, each Borrower agrees to pay to the relevant
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or under any other
Loan Document or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or any other Loan Document ("Other Taxes").
-----------
(c) Each Borrower will indemnify the Administrative Agent and each
Lender (or Transferee) for the full amount of Taxes and Other Taxes paid by the
Administrative Agent or such Lender (or Transferee), as the case may be, and any
liability (including penalties, interest and expenses (including reasonable
attorney's fees and expenses)) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant Governmental Authority. A certificate as to the amount of such
payment or liability prepared by the Administrative Agent or a Lender (or
Transferee), or the Administrative Agent on its behalf, absent manifest error,
shall be final, conclusive and binding for all purposes. Such indemnification
shall be made within 30 days after the date the Administrative Agent or any
Lender (or Transferee), as the case may be, makes written demand therefor.
(d) If the Administrative Agent or a Lender (or Transferee) receives
a refund in respect of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the applicable Borrower has
paid additional amounts pursuant to this Section 2.18, it shall within 30 days
from the date of such receipt pay over such refund to such Borrower (but only to
the extent of indemnity payments made, or additional amounts paid, by such
Borrower under this Section 2.18 with respect to the Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of the Administrative
Agent or such Lender (or Transferee) and without interest (other than interest
paid by the relevant Governmental Authority with respect to such refund);
provided, however, that such Borrower, upon the request of the Administrative
-------- -------
Agent or such Lender (or Transferee), shall repay the amount paid over to such
Borrower (plus penalties, interest or other charges) to the Administrative Agent
or such Lender (or Transferee) in the event the Administrative Agent or such
Lender (or Transferee) is required to repay such refund to such Governmental
Authority.
(e) As soon as practicable after the date of any payment of Taxes or
Other Taxes by any Borrower to the relevant Governmental Authority, such
Borrower will deliver to the Administrative Agent, at its address referred to in
Section 9.01, the original or a certified copy of a receipt issued by such
Governmental Authority evidencing payment thereof.
(f) Each Lender (or Transferee) that is organized under the laws of a
jurisdiction other than the United States, any State thereof or the District of
Columbia (a "Non-U.S. Lender") shall deliver to Parent and the Administrative
---------------
Agent two copies of either United States Internal Revenue Service Form 1001 or
Form 4224, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
Federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest", a Form W-8, or any subsequent versions
thereof or successors thereto (and, if such Non-U.S. Lender delivers a Form W-8,
a certificate representing that such Non-U.S. Lender is not a bank for purposes
of Section 881(c) of the Code, is not a 10-percent shareholder (within the
meaning of Section 871(h)(3)(B) of the Code) of
29
Parent and is not a controlled foreign corporation related to Parent (within the
meaning of Section 864(d)(4) of the Code)), properly completed and duly executed
by such Non-U.S. Lender claiming complete exemption from, or reduced rate of,
U.S. Federal withholding tax on payments by any Borrower under this Agreement
and the other Loan Documents. Such forms shall be delivered by each Non-U.S.
Lender on or before the date it becomes a party to this Agreement (or, in the
case of a Transferee that is a participation holder, on or before the date such
participation holder becomes a Transferee hereunder) and on or before the date,
if any, such Non-U.S. Lender changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
------------------
each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender.
Notwithstanding any other provision of this Section 2.18(f), a Non-U.S. Lender
shall not be required to deliver any form pursuant to this Section 2.18(f) that
such Non-U.S. Lender is not legally able to deliver.
(g) The Borrowers shall not be required to indemnify any Non-U.S.
Lender or to pay any additional amounts to any Non-U.S. Lender, in respect of
United States Federal withholding tax pursuant to paragraph (a) or (c) above to
the extent that (i) the obligation to withhold amounts with respect to United
States Federal withholding tax existed on the date such Non-U.S. Lender became a
party to this Agreement (or, in the case of a Transferee that is a participation
holder, on the date such participation holder became a Transferee hereunder) or,
with respect to payments to a New Lending Office, the date such Non-U.S. Lender
designated such New Lending Office with respect to a Loan; provided, however,
-------- -------
that this paragraph (g) shall not apply (x) to any Transferee or New Lending
Office that becomes a Transferee or New Lending Office as a result of an
assignment, participation, transfer or designation made at the request of any
Borrower and (y) to the extent the indemnity payment or additional amounts any
Transferee, or any Lender (or Transferee), acting through a New Lending Office,
would be entitled to receive (without regard to this paragraph (g)) do not
exceed the indemnity payment or additional amounts that the person making the
assignment, participation or transfer to such Transferee, or Lender (or
Transferee) making the designation of such New Lending Office, would have been
entitled to receive in the absence of such assignment, participation, transfer
or designation or (ii) the obligation to pay such additional amounts would not
have arisen but for a failure by such Non-U.S. Lender to comply with the
provisions of paragraph (g) above.
(h) Nothing contained in this Section 2.18 shall require any Lender
(or any Transferee) or the Administrative Agent to make available any of its tax
returns (or any other information that it deems to be confidential or
proprietary).
SECTION 2.19. Assignment of Commitments Under Certain Circumstances; Duty to
--------------------------------------------------------------
Mitigate. (a) In the event (i) any Lender delivers a certificate requesting
---------
compensation pursuant to Section 2.12, (ii) any Lender delivers a notice
described in Section 2.13 or (iii) a Borrower is required to pay any additional
amount to any Lender or any Governmental Authority on account of any Lender
pursuant to Section 2.18, Parent may, at its sole expense and effort (including
with respect to the processing and recordation fee referred to in Section
9.04(b)), upon notice to such Lender and the Administrative Agent, require such
Lender to transfer and assign, without recourse (in accordance with and subject
to the restrictions contained in Section 9.04), all of its interests, rights and
obligations under this Agreement to an assignee that shall assume such assigned
30
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (x) such assignment shall not conflict with any law,
--------
rule or regulation or order of any court or other Governmental Authority having
jurisdiction, (y) Parent shall have received the prior written consent of the
Administrative Agent, which consent shall not unreasonably be withheld, and (z)
Parent or such assignee shall have paid to the affected Lender in immediately
available funds an amount equal to the sum of the principal of and interest
accrued to the date of such payment on the outstanding Loans of such Lender plus
all Commitment Fees and other amounts accrued for the account of such Lender
hereunder (including any amounts under Section 2.12 and Section 2.14).
(b) If (i) any Lender shall request compensation under Section 2.12,
(ii) any Lender delivers a notice described in Section 2.13 or (iii) any
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority on account of any Lender, pursuant to Section 2.18, then
such Lender shall use reasonable efforts (which shall not require such Lender to
incur an unreimbursed loss or unreimbursed cost or expense or otherwise take any
action inconsistent with its internal policies or legal or regulatory
restrictions or suffer any disadvantage or burden deemed by it to be
significant) (x) to file any certificate or document reasonably requested in
writing by Parent or (y) to assign its rights and delegate and transfer its
obligations hereunder to another of its offices, branches or affiliates, if such
filing or assignment would reduce its claims for compensation under Section 2.12
or enable it to withdraw its notice pursuant to Section 2.13 or would reduce
amounts payable pursuant to Section 2.18, as the case may be, in the future.
Parent hereby agrees to pay all reasonable costs and expenses incurred by any
Lender in connection with any such filing or assignment, delegation and
transfer.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of Parent and the Company represents and warrants to the
Administrative Agent, the Collateral Agent and each of the Lenders that:
SECTION 3.01. Organization; Powers. Each of Parent, the Company and each of
---------------------
the Subsidiaries (a) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
all requisite power and authority to own its property and assets and to carry on
its business as now conducted and as proposed to be conducted, (c) is qualified
to do business in, and is in good standing in, every jurisdiction where such
qualification is required, except where the failure so to qualify could not
reasonably be expected to result in a Material Adverse Effect, and (d) has the
corporate power and authority to execute, deliver and perform its obligations
under each of the Loan Documents and each other agreement or instrument
contemplated hereby to which it is or will be a party and to borrow hereunder.
SECTION 3.02. Authorization. The execution, delivery and performance by each
--------------
of Parent and the Company of each of the Loan Documents, the borrowings
hereunder, the creation of the security interests provided in the Pledge
Agreement and, in the case of Parent, the consummation of the Acquisition
(collectively, the "Transactions") (a) have
------------
31
been duly authorized by all requisite corporate and, if required, stockholder or
policyholder action and (b) will not (i) violate (A) any provision of law,
statute, rule or regulation, or of the certificate or articles of incorporation
or other constitutive documents or by-laws of Parent, the Company or any
Subsidiary, (B) any order of any Governmental Authority or (C) any provision of
any indenture, agreement or other instrument to which Parent, the Company,
Westfield or any Subsidiary is a party or by which any of them or any of their
property is or may be bound, (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default under, or
give rise to any right to accelerate or to require the prepayment, repurchase or
redemption of any obligation under any such indenture, agreement or other
instrument or (iii) result in the creation or imposition of any Lien upon or
with respect to any property or assets now owned or hereafter acquired by
Parent, the Company, Westfield or any Subsidiary (other than any Lien created
under the Pledge Agreement).
SECTION 3.03. Enforceability. This Agreement has been duly executed and
---------------
delivered by each of Parent and the Company and constitutes, and each other Loan
Document when executed and delivered by each of Parent and the Company will
constitute, a legal, valid and binding obligation of each of Parent and the
Company enforceable against each of Parent and the Company in accordance with
its terms.
SECTION 3.04. Governmental Approvals. No action, consent or approval of,
-----------------------
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Transactions, or, at the date
thereof, any Permitted Acquisition, except (i) such as have been made or
obtained and are in full force and effect and (ii) in connection with the
exercise of remedies by the Collateral Agent following an Event of Default by
the Borrower, compliance by the Collateral Agent with applicable Nebraska law
including Neb. Rev. Stat. (S)(S) 44-2126 and 44-6115, applicable Ohio law
including Ohio Revised Code Section 3901.321 and applicable Pennsylvania law
including 40 PENNSYLVANIA STATUTES (S)(S) 8991.1401, 8991.1402 and 8991.1403.
SECTION 3.05. Financial Statements. (a) Parent has heretofore furnished to
---------------------
the Lenders its consolidated balance sheets and statements of income and changes
in financial condition (a) as of and for the fiscal year ended December 31,
1997, audited by and accompanied by the opinion of KPMG Peat Marwick LLP,
independent public accountants, and (b) as of and for the fiscal quarter and the
portion of the fiscal year ended March 31, 1998, certified by its chief
financial officer. Such financial statements present fairly the financial
condition and results of operations and cash flows of Parent and its
consolidated Subsidiaries as of such dates and for such periods. Such balance
sheets and the notes thereto disclose all material liabilities, direct or
contingent, of Parent and its consolidated Subsidiaries as of the dates thereof.
Such financial statements were prepared in accordance with GAAP applied on a
consistent basis.
(b) Parent has heretofore delivered to the Lenders its unaudited pro
forma consolidated balance sheet as of December 31, 1997, prepared giving effect
to the Acquisition as if it had occurred on such date. Such pro forma balance
sheet has been prepared in good faith by Parent, based on assumptions believed
by Parent on the date hereof to be reasonable, is based on the best information
available to Parent as of the date of delivery thereof, accurately reflects all
adjustments required to be made to give effect
32
to the Acquisition, and presents fairly on a pro forma basis the estimated
consolidated financial position of Parent and its consolidated Subsidiaries as
of March 31, 1998, assuming that the Acquisition had actually occurred on
December 31, 1997.
SECTION 3.06. No Material Adverse Change. There has been no material
---------------------------
adverse change in the business, assets, operations, prospects, condition,
financial or otherwise, or material agreements of Parent and the Subsidiaries,
taken as a whole, since December 31, 1997.
SECTION 3.07. Title to Properties; Possession Under Leases. (a) Each of
---------------------------------------------
Parent, the Company and the Subsidiaries has good and marketable title to, or
valid leasehold interests in, all its material properties and assets, except for
minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties and assets for
their intended purposes. All such material properties and assets are free and
clear of Liens, other than Liens expressly permitted by Section 6.02.
(b) Each of Parent, the Company and the Subsidiaries has complied
with all obligations under all material leases to which it is a party and all
such leases are in full force and effect. Each of Parent, the Company and the
Subsidiaries enjoys peaceful and undisturbed possession under all such material
leases.
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the Effective
-------------
Date (after giving effect to the Acquisition) a list of all Subsidiaries and, as
to each Subsidiary, the number of issued and outstanding shares of each class of
capital stock of each Subsidiary and the ownership of all such shares. The
shares of capital stock or other ownership interests indicated on Schedule 3.08
to be owned directly or indirectly by Parent are fully paid and non-assessable
and are owned by Parent directly or indirectly, free and clear of all Liens.
SECTION 3.09. Litigation; Compliance with Laws. (a) Except as set forth on
---------------------------------
Schedule 3.09, there are not any actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of Parent, threatened against or affecting Parent or any Subsidiary or
any business, property or rights of any such person (i) that involve any Loan
Document or the Transactions or (ii) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect.
(b) None of Parent, the Company or any of the Subsidiaries or any of
their respective material properties or assets is in violation of, nor will the
continued operation of their material properties and assets as currently
conducted violate, any law, rule or regulation, or is in default with respect to
any judgment, writ, injunction, decree or order of any Governmental Authority,
where such violation or default could reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10. Agreements. (a) Neither Parent, the Company nor any of the
-----------
Subsidiaries is a party to any agreement or instrument or subject to any
corporate restriction (other than restrictions disclosed in Schedule 3.10
hereto) that has resulted or could reasonably be expected to result in a
Material Adverse Effect.
33
(b) None of Parent, the Company nor any of the Subsidiaries is in
default in any manner under any provision of any indenture or other agreement or
instrument evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default could reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.11. Federal Reserve Regulations. (a) None of Parent, the
----------------------------
Company nor any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
buy or carry any Margin Stock or for any purpose that entails a violation of, or
that is inconsistent with, the provisions of the Regulations of the Board,
including Regulation U or X.
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act.
-----------------------------------------------------------
None of Parent, the Company nor any Subsidiary is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.13. Use of Proceeds. Parent will use the proceeds of the Term
----------------
Loans only to pay the cash portion of the Purchase Price and related fees and
expenses in connection with the Acquisition. Parent and the Company will use
the proceeds of the Revolving Loans only for (i) general corporate purposes,
including the funding of surplus infusions to Subsidiaries and the payment of
any amounts owed under the Existing Credit Agreement, and (ii) Permitted
Acquisitions.
SECTION 3.14. Tax Returns. Each of Parent, the Company and the Subsidiaries
------------
has filed or caused to be filed all Federal, state, local and foreign tax
returns or materials required to have been filed by it and has paid or caused to
be paid all taxes due and payable by it and all assessments received by it,
except taxes that are being contested in good faith by appropriate proceedings
and for which Parent, the Company or such Subsidiary, as applicable, shall have
set aside on its books adequate reserves.
SECTION 3.15. No Material Misstatements. No information, report, financial
--------------------------
statement, projection, exhibit or schedule furnished by or on behalf of Parent
to the Administrative Agent or any Lender in connection with the negotiation of
any Loan Document or included therein or delivered pursuant thereto contained,
contains or will contain any material misstatement of fact or omitted, omits or
will omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were, are or will be made,
not misleading; provided that to the extent any such information, report,
--------
financial statement, exhibit or schedule was based upon or constitutes a
forecast or projection, Parent represents only that it acted in good faith and
utilized reasonable assumptions and due care in the preparation of such
information, report, financial statement, exhibit or schedule.
34
SECTION 3.16. Employee Benefit Plans. Each of Parent and its ERISA
-----------------------
Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in material liability of Parent or any of
its ERISA Affiliates. The present value of all benefit liabilities under each
Plan (based on those assumptions used to fund such Plan) did not, as of the last
annual valuation date applicable thereto, exceed by more than $1,000,000 the
fair market value of the assets of such Plan, and the present value of all
benefit liabilities of all underfunded Plans (based on those assumptions used to
fund each such Plan) did not, as of the last annual valuation dates applicable
thereto, exceed by more than $1,000,000 the fair market value of the assets of
all such underfunded Plans.
SECTION 3.17. Pledge Agreement. The Pledge Agreement is effective to create
-----------------
in favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral (as
defined in the Pledge Agreement) and, when the Pledged Shares (as defined in the
Pledge Agreement) are delivered to the Collateral Agent, the Pledge Agreement
shall constitute a fully perfected first priority Lien on, and security interest
in, all right, title and interest of the pledgor thereunder in such Collateral,
in each case prior and superior in right to any other person and except, in
connection with the exercise of remedies by the Collateral Agent following an
Event of Default by the Borrower, compliance by the Collateral Agent with
applicable Nebraska law including Neb. Rev. Stat. (S)(S) 44-2126 and 44-6115,
applicable Ohio law including Ohio Revised Code Section 3901.321 and applicable
Pennsylvania law including 40 PENNSYLVANIA STATUTES (S)(S) 8991.1401, 8991.1402
and 8991.1403.
SECTION 3.18. Year 2000 Compliance. Any reprogramming required to permit the
---------------------
proper functioning, in and following the year 2000, of (a) the computer systems
of Parent and its Subsidiaries and (b) equipment containing embedded microchips
(including systems and equipment supplied by others or with which systems of
Parent, the Company or any Subsidiary interface) and the testing of all such
systems and equipment, as so reprogrammed, will be substantially completed by
June 30, 1999. The cost to Parent, the Company and the Subsidiaries of such
reprogramming and testing and of the reasonably foreseeable consequences of year
2000 to Parent, the Company and the Subsidiaries (including reprogramming errors
and the failure of others' systems or equipment) will not result in a Default or
a Material Adverse Effect. Except for such of the reprogramming referred to in
the preceding sentence as may be necessary, the computer and management
information systems of Parent, the Company and the Subsidiaries are and, with
ordinary course upgrading and maintenance, will continue for the term of this
Agreement to be, sufficient to permit Parent, the Company and the Subsidiaries
to conduct their business without Material Adverse Effect.
ARTICLE IV
CONDITIONS OF LENDING
The obligations of the Lenders to make Loans hereunder are subject to
the satisfaction of the following conditions:
35
SECTION 4.01. All Borrowings. On the date of each Borrowing:
---------------
(a) The Administrative Agent shall have received a notice of such
Borrowing as required by Section 2.03.
(b) Except in the case of a Borrowing that does not increase the
aggregate principal amount of Loans of either Class outstanding, the
representations and warranties set forth in Article III hereof shall be
true and correct in all material respects on and as of the date of such
Borrowing with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate
to an earlier date.
(c) Each of Parent and the Company shall be in compliance with all
the terms and provisions set forth herein and in each other Loan Document
on its part to be observed or performed, and at the time of and immediately
after such Borrowing, no Event of Default or Default shall have occurred
and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
each of Parent and the Company on the date of such Borrowing as to the matters
specified in paragraphs (b) (except as aforesaid) and (c) of this Section 4.01.
SECTION 4.02. Initial Borrowing. On or prior to the date of the initial
------------------
Borrowing hereunder:
(a) The Administrative Agent shall have received, on behalf of itself
and the Lenders, a favorable written opinion of Xxxxxxx Xxxxxxxx, General
Counsel of Parent, substantially in the form of Exhibit E, (A) dated the
Effective Date, (B) addressed to the Administrative Agent and the Lenders,
and (C) covering such other matters relating to the Loan Documents and the
Transactions as the Administrative Agent shall reasonably request.
(b) All legal matters incident to this Agreement, the Borrowings and
extensions of credit hereunder and the other Loan Documents shall be
satisfactory to the Lenders and to Cravath, Swaine & Xxxxx, counsel for the
Administrative Agent.
(c) The Administrative Agent shall have received (i) a copy of the
certificate or articles of incorporation, including all amendments thereto,
of each of Parent and the Company, certified as of a recent date by the
Secretary of State of the state of its organization, and a certificate as
to the good standing of each of Parent and the Company as of a recent date,
from such Secretary of State; (ii) a certificate of the Secretary or
Assistant Secretary of each of Parent and the Company dated the Effective
Date and certifying (A) that attached thereto is a true and complete copy
of the by-laws of each of Parent and the Company as in effect on the
Effective Date and at all times since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached thereto is a
true and complete copy of resolutions duly adopted by the Board of
Directors of each of Parent and the Company authorizing the execution,
delivery and performance of
36
the Loan Documents, the borrowings hereunder and, in the case of Parent,
the Acquisition, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (C) that the
certificate or articles of incorporation of each of Parent and the Company
have not been amended since the date of the last amendment thereto shown on
the certificate of good standing furnished pursuant to clause (i) above,
and (D) as to the incumbency and specimen signature of each officer
executing any Loan Document or any other document delivered in connection
herewith on behalf of each of Parent and the Company; (iii) a certificate
of another officer as to the incumbency and specimen signature of the
Secretary or Assistant Secretary executing the certificate pursuant to (ii)
above; and (iv) such other documents as the Lenders or Cravath, Swaine &
Xxxxx, counsel for the Administrative Agent, may reasonably request.
(d) The Administrative Agent shall have received a certificate, dated
the Effective Date and signed by a Financial Officer of Parent, confirming
compliance with the conditions precedent set forth in paragraphs (b) and
(c) of Section 4.01.
(e) The Administrative Agent shall have received all Fees and other
amounts due and payable on or prior to the Effective Date, including, to
the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by either Borrower hereunder or under any
other Loan Document.
(f) The Pledge Agreement shall have been duly executed by the parties
thereto and delivered to the Collateral Agent and shall be in full force
and effect, and all capital stock owned by Parent of the Restricted
Subsidiaries (including, without limitation, Westfield) shall have been
duly and validly pledged thereunder to the Collateral Agent for the ratable
benefit of the Secured Parties and certificates representing such shares,
accompanied by instruments of transfer or stock powers endorsed in blank,
shall be in the actual possession of the Collateral Agent.
(g) The Acquisition shall have been (or, simultaneously with the
funding of the initial Loans on the Effective Date, shall be) duly
completed in accordance with applicable law and the Purchase Agreement
(without giving effect to any material amendment thereto or waiver
thereunder that has not been approved by the Required Lenders).
(h) The Existing Credit Agreement and all lending commitments
thereunder shall have been (or, simultaneously with the funding of the
initial Loans on the Effective Date, shall be) terminated, all loans and
other amounts outstanding thereunder shall have been (or, simultaneously
with the funding of the initial Loans on the Effective Date, shall be) paid
in full and all Liens securing obligations thereunder shall have been (or,
simultaneously with the funding of the initial Loans on the Effective Date,
shall be) released.
(i) After giving effect to the Acquisition and the other transactions
contemplated hereby, Parent and its Subsidiaries shall have outstanding no
Indebtedness or preferred stock other than (i) the Loans hereunder and (ii)
37
preferred stock issued under the Rights Agreement dated as of November 18,
1996, between Parent and Chasemellon Shareholder Services, LLC.
(j) All Governmental Authorities and other third parties shall have
approved or consented to the Acquisition and the Transactions, to the
extent required, all applicable appeal periods shall have expired and there
shall be no governmental or judicial action, actual or threatened, that has
a reasonable likelihood of restraining, preventing or imposing burdensome
conditions on the Acquisition or the Transactions.
(k) The Lenders shall have received an unaudited pro forma
consolidated balance sheet of Parent as of December 31, 1997, prepared
giving effect to the Acquisition and the other Transactions as if they had
occurred on such date, which shall not be materially inconsistent with
forecasts dated April, 1998, previously provided to the Lenders.
ARTICLE V
AFFIRMATIVE COVENANTS
Each of Parent and the Company covenants and agrees with each Lender
that so long as this Agreement shall remain in effect and until the Commitments
have been terminated and the principal of and interest on each Loan, all Fees
and all other expenses or amounts payable under any Loan Document shall have
been paid in full, unless the Required Lenders shall otherwise consent in
writing, each of Parent and the Company will, and Parent will cause each of the
Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties. (a) Do or cause to be
-------------------------------------
done all things necessary to preserve, renew and keep in full force and effect
its legal existence, except as otherwise expressly permitted under Section 6.04.
(b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated; comply
in all material respects with all applicable laws, rules, regulations and
decrees and orders of any Governmental Authority (including, without limitation,
risk-based capital requirements, Environmental Laws or any other rules
promulgated by any Applicable Insurance Regulatory Authority), whether now in
effect or hereafter enacted; and at all times maintain and preserve all property
material to the conduct of such business and keep such property in good repair,
working order and condition and from time to time make, or cause to be made, all
needful and proper repairs, renewals, additions, improvements and replacements
thereto necessary in order that the business carried on in connection therewith
may be properly conducted at all times.
SECTION 5.02. Insurance. Keep its insurable properties adequately insured
----------
at all times by financially sound and reputable insurers; maintain such other
insurance, to such extent and against such risks, including fire and other risks
insured against by extended coverage, as is customary with companies in the same
or similar businesses operating in
38
the same or similar locations, including public liability insurance against
claims for personal injury or death or property damage occurring upon, in, about
or in connection with the use of any properties owned, occupied or controlled by
it; and maintain such other insurance as may be required by law.
SECTION 5.03. Obligations and Taxes. Pay its Indebtedness and other
----------------------
obligations promptly and in accordance with their terms and pay and discharge
promptly when due all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property,
before the same shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise that, if unpaid, might
give rise to a Lien upon such properties or any part thereof; provided, however,
-------- -------
that such payment and discharge shall not be required with respect to any such
tax, assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings and Parent or the
Company, as applicable, shall have set aside on its books adequate reserves with
respect thereto in accordance with GAAP (or, in the case of the Company, SAP)
and such contest operates to suspend collection of the contested obligation,
tax, assessment or charge and enforcement of a Lien.
SECTION 5.04. Financial Statements, Reports, etc. In the case of Parent,
-----------------------------------
furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year, its consolidated
and consolidating balance sheets and related statements of operations,
stockholders' equity and cash flows showing the financial condition of
Parent and its consolidated Subsidiaries as of the close of such fiscal
year and the results of its operations and the operations of such
Subsidiaries during such year, all audited by KPMG Peat Marwick LLP or
other independent public accountants of recognized national standing
acceptable to the Required Lenders and accompanied by an opinion of such
accountants (which shall not be qualified in any material respect) to the
effect that such consolidated financial statements fairly present the
financial condition and results of operations of Parent and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year, its consolidated and consolidating balance
sheets and related statements of operations, stockholders' equity and cash
flows showing the financial condition of Parent and its consolidated
Subsidiaries as of the close of such fiscal quarter and the results of its
operations and the operations of such Subsidiaries during such fiscal
quarter and the then elapsed portion of the fiscal year, all certified by
one of its Financial Officers as fairly presenting the financial condition
and results of operations of Parent and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments;
(c) concurrently with any delivery of financial statements under sub-
paragraph (a) or (b) above, a certificate of the accounting firm or
Financial Officer opining on or certifying such statements (which
certificate, when furnished by an accounting firm, may be limited to
accounting matters and disclaim responsibility for legal interpretations)
certifying that no Event of Default or Default has
39
occurred or, if such an Event of Default or Default has occurred,
specifying the nature and extent thereof and any corrective action taken or
proposed to be taken with respect thereto;
(d) as soon as available and in any event within 90 days after the end
of each fiscal year, (i) the Statement of Actuarial Opinion of each
Insurance Subsidiary for such fiscal year as filed with the Applicable
Insurance Regulatory Authority and (ii) the Annual Statement of each
Insurance Subsidiary for such fiscal year as filed with the Applicable
Insurance Regulatory Authority, together with, in the case of the
statements delivered pursuant to clause (ii) above, (x) a certificate of a
Responsible Officer of such Insurance Subsidiary or a Responsible Officer
of Parent, as the case may be, to the effect that such statements present
fairly the statutory assets, liabilities, capital and surplus, results of
operations and cash flows of such Insurance Subsidiary in accordance with
SAP and (y) management discussions and analysis prepared by such Insurance
Subsidiary with respect to such Annual Statement;
(e) as soon as available and in any event within 45 days after the end
of each of the first three fiscal quarters of each fiscal year, the
Quarterly Statement of each Insurance Subsidiary for such fiscal quarter as
filed with the Applicable Insurance Regulatory Authority, certified by a
Responsible Officer of the Borrower as fairly presenting the statutory
assets, liabilities, capital and surplus, results of operations and cash
flows of such Insurance Subsidiary.
(f) promptly after delivery to an Insurance Subsidiary, final copies
of all regular and periodic reports of reviews or examinations of such
Insurance Subsidiary delivered to such Insurance Subsidiary by the
Applicable Insurance Regulatory Authority;
(g) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
Parent, the Company or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
distributed to its shareholders, as the case may be; and
(h) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of Parent, the Company
or any Subsidiary, or compliance with the terms of any Loan Document, as
the Administrative Agent or any Lender may reasonably request.
SECTION 5.05. Litigation and Other Notices. Furnish to the Administrative
-----------------------------
Agent and each Lender prompt written notice of the following:
(a) any Event of Default or Default, specifying the nature and extent
thereof and the corrective action (if any) taken or proposed to be taken
with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or
40
in equity or by or before any Governmental Authority, against either
Borrower or any Affiliate thereof that could reasonably be expected to
result in a Material Adverse Effect; and
(c) any development that has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect.
SECTION 5.06. Employee Benefits. (a) Comply in all material respects with
------------------
the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent (i) as soon as possible after, and in any event within 10
days after any Responsible Officer of Parent or any ERISA Affiliate knows or has
reason to know that, any ERISA Event has occurred that, alone or together with
any other ERISA Event could reasonably be expected to result in liability of
Parent in an aggregate amount exceeding $1,000,000 or requiring payments
exceeding $1,000,000 in any year, a statement of a Financial Officer of Parent
setting forth details as to such ERISA Event and the action, if any, that Parent
proposes to take with respect thereto.
SECTION 5.07. Maintaining Records; Access to Properties and Inspections.
----------------------------------------------------------
Keep proper books of record and account in which full, true and correct entries
in conformity with GAAP and all requirements of law are made of all dealings and
transactions in relation to its business and activities. Each Borrower will,
and will cause each of its Subsidiaries to, permit any representatives
designated by the Administrative Agent or any Lender to visit and inspect the
financial records and the properties of Parent, the Company or any Subsidiary at
reasonable times and as often as reasonably requested and to make extracts from
and copies of such financial records, and permit any representatives designated
by the Administrative Agent or any Lender to discuss the affairs, finances and
condition of Parent, the Company or any Subsidiary with the officers thereof and
independent accountants therefor.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans only for the
----------------
purposes set forth in the preamble to this Agreement.
SECTION 5.09. Tax Sharing and Other Arrangements. By December 31, 1998,
----------------------------------
enter into written tax sharing or other arrangements among Parent and the
Subsidiaries satisfactory to the Administrative Agent, and provide copies of all
such arrangements or agreements to the Administrative Agent and the Lenders by
such date.
SECTION 5.10. Further Assurances. Execute any and all further documents,
-------------------
financing statements, agreements and instruments, and take all further action
that may be required under applicable law, or that the Required Lenders, the
Administrative Agent or the Collateral Agent may reasonably request, in order to
effectuate the transactions contemplated by the Loan Documents and in order to
grant, preserve, protect and perfect the validity and first priority of the
security interests created or intended to be created by the Pledge Agreement.
Parent will promptly amend Schedule I to the Pledge Agreement to reflect the
creation or acquisition of, or the modification in any fashion of any Subsidiary
into, a Restricted Subsidiary, and will promptly cause the stock or other
interests of such Restricted Subsidiary to be duly and validly pledged and
delivered to the Collateral Agent as provided in the Pledge Agreement. Parent
agrees to provide such
41
evidence as the Collateral Agent shall reasonably request as to the perfection
and priority status of each such security interest.
ARTICLE VI
NEGATIVE COVENANTS
Each of Parent and the Company covenants and agrees with each Lender
that, so long as this Agreement shall remain in effect and until the Commitments
have been terminated and the principal of and interest on each Loan, all Fees
and all other expenses or amounts payable under any Loan Document have been paid
in full, unless the Required Lenders shall otherwise consent in writing, neither
Parent nor the Company will, nor will either cause or permit any of the
Subsidiaries to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist any
-------------
Indebtedness, except:
(a) Indebtedness for borrowed money existing on the date hereof and
set forth in Schedule 6.01;
(b) Indebtedness created hereunder;
(c) other Indebtedness ranking pari passu (taking into account any
---- -----
effects of structural subordination, etc.) with the Indebtedness hereunder,
to the extent that the aggregate principal amount of such Indebtedness and
the Indebtedness in respect of Revolving Loans outstanding hereunder does
not at any time exceed $75,000,000; and
(d) in the case of Parent, Indebtedness in an aggregate principal
amount not exceeding $100,000,000 in respect of long-term unsecured debt
securities issued by Parent; provided that (i) such debt securities mature
--------
after the Term Loan Maturity Date and do not require any scheduled
amortization prior to the Term Loan Maturity Date and (ii) the terms and
conditions of such debt securities (including, without limitation, the
covenants, events of default and any mandatory redemption provisions
applicable thereto) shall be no less favorable to Parent in any material
respect than those prevailing at the time of issuance for unsecured debt
securities issued by issuers of credit quality comparable to Parent in
public offerings registered under the Securities Act of 1933 or offerings
pursuant to Rule 144A thereunder.
SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien on
------
any property or assets (including stock or other securities of any person,
including any Subsidiary) now owned or hereafter acquired by it or on any income
or revenues or rights in respect of any thereof, except:
(a) Liens on property or assets of Parent, the Company, Westfield and
the Subsidiaries existing on the date hereof and set forth in Schedule
6.02; provided that such Liens shall secure only those obligations which
--------
they secure on the date hereof;
42
(b) any Lien created under the Loan Documents;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by Parent, the Company or any Subsidiary; provided that
--------
(i) such Lien is not created in contemplation of or in connection with such
acquisition and (ii) such Lien does not apply to any other property or
assets of Parent, the Company or any Subsidiary;
(d) Liens for taxes not yet due or which are being contested in
compliance with Section 5.03;
(e) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business and securing
obligations that are not due and payable or which are being contested in
compliance with Section 5.03;
(f) pledges and deposits made in the ordinary course of business in
compliance with workmen's compensation, unemployment insurance and other
social security laws or regulations;
(g) deposits to secure the performance of bids, trade contracts (other
than for Indebtedness), leases (other than Capital Lease Obligations),
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
and
(h) zoning restrictions, easements, rights-of-way, restrictions on use
of real property and other similar encumbrances incurred in the ordinary
course of business which, in the aggregate, are not substantial in amount
and do not materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries.
SECTION 6.03. Sale and Lease-Back Transactions. Enter into any arrangement,
---------------------------------
directly or indirectly, with any person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred; provided that the Company may sell its home
--------
office campus located at 8801, 8805 and 0000 Xxxxxx Xxxxx Xxxxx in Omaha,
Nebraska and any contiguous real estate pursuant to a sale and leaseback
transaction.
SECTION 6.04. Mergers, Consolidations and Sales of Assets. Merge into or
--------------------------------------------
consolidate with any other person, or permit any other person to merge into or
consolidate with it, or sell, transfer, lease or otherwise dispose of (in one
transaction or in a series of transactions) all or substantially all its assets
(whether now owned or hereafter acquired), except that if at the time thereof
and immediately after giving effect thereto no Event of Default or Default shall
have occurred and be continuing (i) any wholly owned Subsidiary may merge into
Parent in a transaction in which Parent is the surviving corporation, (ii) any
wholly owned Subsidiary may merge into or consolidate with any other wholly
owned Subsidiary in a transaction in which the surviving entity is a wholly
43
owned Subsidiary and no person other than Parent or a wholly owned Subsidiary
receives any consideration (iii) any Subsidiary may sell or transfer through
coinsurance, reinsurance or otherwise all or substantially all of its assets to
a wholly owned Subsidiary (provided that if the Subsidiary so selling or
--------
transferring assets is a Restricted Subsidiary the Subsidiary receiving such
assets shall also be a Restricted Subsidiary, all of whose stock and other
equity interests have been pledged and delivered to the Collateral Agent under
the Pledge Agreement); provided however that this Section 6.04 shall not
--------
prohibit any merger or consolidation in which the surviving entity is a wholly
owned Subsidiary and such merger or consolidation would have constituted a
Permitted Acquisition if it had been structured as a stock or asset purchase.
SECTION 6.05. Restrictions on Ability of Subsidiaries to Pay Dividends.
---------------------------------------------------------
Except to the extent required by applicable law following the ongoing best
efforts of Parent, permit its Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Subsidiary to (i) pay any dividends or
make any other distributions on its capital stock or any other interest or (ii)
make or repay any loans or advances to either Borrower or the parent of such
Subsidiary to the extent any such restriction or limitation could result in a
material adverse effect on the condition (financial or otherwise) of Parent or
the Company or on the ability of Parent or the Company to service its
Indebtedness or otherwise comply with the terms and conditions of any Loan
Document.
SECTION 6.06. Transactions with Affiliates. Sell or transfer any property or
-----------------------------
assets to, or purchase or acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except that
Parent, the Company or any Subsidiary may engage in any of the foregoing
transactions in the ordinary course of business at prices and on terms and
conditions not less favorable to Parent, the Company or such Subsidiary than
could be obtained on an arm's-length basis from unrelated third parties.
SECTION 6.07. Business of Parent, the Company and Subsidiaries. Engage at
-------------------------------------------------
any time in any business or business activity other than the business currently
conducted by it and business activities reasonably incidental thereto.
SECTION 6.08. Minimum Net Worth. Permit the Consolidated Net Worth on any
------------------
date to be less than the sum of (i) $150,000,000 plus (ii) 50% of the sum of
Consolidated Net Income for each completed fiscal quarter commencing on or after
January 1, 1994, for which Consolidated Net Income is positive.
SECTION 6.09. Leverage Ratio. Permit the Leverage Ratio (a) on any date
---------------
during the period from and including the Effective Date through and including
December 31, 1999, to exceed 0.40 to 1.0, (b) on any date during the period from
and including January 1, 2000 through and including December 31, 2000, to exceed
0.35 to 1.0 and (c) on any date after December 31, 2000, to exceed 0.30 to 1.0.
SECTION 6.10. Interest Coverage Ratio. Permit the ratio of (a) the sum of
------------------------
(without duplication) (i) Cash Sources for the period of four fiscal quarters
most recently ended on or prior to any date plus (ii) cash and Cash Equivalents
held by Parent on such date (deducting any amounts received as loans from any
Subsidiary) in an amount not to
44
exceed $5,000,000 to (b) Consolidated Interest Expense for the period of four
fiscal quarters most recently ended on or prior to such date to be less than 3.0
to 1.0.
SECTION 6.11. Risk-Based Capital Ratio. Permit the ratio of the Total
-------------------------
Adjusted Capital of any Material Insurance Subsidiary on any date to the Company
Action Level Risk-Based Capital of such Material Insurance Subsidiary on such
date to be less than 1.75 to 1.0.
SECTION 6.12. Preferred Stock. Issue, or permit to remain outstanding, any
---------------
preferred stock or other capital or equity interests, other than Trust Preferred
Securities, of any Subsidiary preferred as to the payment of dividends or other
amounts and Series A Junior Participating Cumulative Preferred Stock issued
under the Parent's Rights Agreement, dated November 18, 1996.
SECTION 6.13. Tax Sharing and Other Arrangements. Terminate, amend or permit
----------------------------------
to be terminated or amended the written tax sharing or other arrangements
entered into pursuant to Section 5.09 hereof.
SECTION 6.14. Trust Preferred Securities. Issue, assume or permit to remain
--------------------------
outstanding Trust Preferred Securities in an aggregate principal amount in
excess of $150,000,000.
SECTION 6.15. Prepayment of Long-Term Unsecured Debt Securities. Prepay
-------------------------------------------------
prior to the Term Loan Maturity Date any Indebtedness permitted pursuant to
Section 6.01(d).
ARTICLE VII
EVENTS OF DEFAULT
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made in or in
connection with any Loan Document or the borrowings hereunder, or any
representation, warranty, statement or information contained in any report,
certificate, financial statement or other instrument furnished in
connection with or pursuant to any Loan Document, shall prove to have been
false or misleading in any material respect when so made, deemed made or
furnished;
(b) default shall be made in the payment of any principal of any Loan
when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise;
(c) default shall be made in the payment of any interest on any Loan
or any Fee or any other amount (other than an amount referred to in (b)
above) due under any Loan Document, when and as the same shall become due
and payable, and such default shall continue unremedied for a period of
three Business Days;
45
(d) default shall be made in the due observance or performance by
Parent, the Company or any Subsidiary of any covenant, condition or
agreement contained in Section 5.01(a), 5.05 or 5.08 or in Article VI,
provided, however, that no default shall be deemed to have occurred under
-------- -------
Section 6.10 hereof at any time if (i) there shall be on deposit in a
collateral account maintained by Parent with the Administrative Agent for
the ratable benefit of the Lenders, the Administrative Agent and the
Collateral Agent cash or Cash Equivalents of Parent at least equal to the
required aggregate payments of principal, interest and fees hereunder for
the 12 months immediately succeeding such time (assuming timely repayment
of all principal scheduled at such time to be repaid during such period
with respect to outstanding Loans and an average interest rate equal to the
weighted average of the rates applicable to outstanding Loans at such time)
and (ii) no default would have occurred under such Section if compliance
with such Section had been computed without giving effect to any ceding
commissions deemed to have been paid by the Company by virtue of payments
to any other insurance company to acquire a portion of such company's
insurance business;
(e) default shall be made in the due observance or performance by
Parent, the Company or any Subsidiary of any covenant, condition or
agreement contained in any Loan Document (other than those specified in
(b), (c) or (d) above) and such default shall continue unremedied for a
period of 10 days after notice thereof from the Administrative Agent or any
Lender to Parent;
(f) Parent, the Company or any Subsidiary shall (i) fail to pay any
principal or interest, regardless of amount, due in respect of any
Indebtedness in a principal amount in excess of $5,000,000, when and as the
same shall become due and payable, or (ii) fail to observe or perform any
other term, covenant, condition or agreement contained in any agreement or
instrument evidencing or governing any such Indebtedness if the effect of
any failure referred to in this clause (ii) is to cause, or to permit the
holder or holders of such Indebtedness or a trustee on its or their behalf
(with or without the giving of notice, the lapse of time or both) to cause,
such Indebtedness to become due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of Parent, the Company or any Subsidiary, or of a
substantial part of the property or assets of Parent, the Company or a
Subsidiary, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official
for Parent, the Company or any Subsidiary or for a substantial part of the
property or assets of Parent, the Company or a Subsidiary or (iii) the
winding-up or liquidation of Parent, the Company or any Subsidiary; and
such proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(h) Parent, the Company or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11
of the United States Code, as now constituted or hereafter amended, or any
other Federal, state
46
or foreign bankruptcy, insolvency, receivership or similar law, (ii)
consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described
in (g) above, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for
Parent, the Company or any Subsidiary or for a substantial part of the
property or assets of Parent, the Company or any Subsidiary, (iv) file an
answer admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (vii) take any action for
the purpose of effecting any of the foregoing;
(i) one or more judgments for the payment of money in an aggregate
amount in excess of $2,000,000 shall be rendered against Parent, the
Company, any Subsidiary or any combination thereof and the same shall
remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally
taken by a judgment creditor to levy upon assets or properties of Parent,
the Company or any Subsidiary to enforce any such judgment;
(j) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other such ERISA Events,
could reasonably be expected to result in liability of Parent and its ERISA
Affiliates in an aggregate amount exceeding $1,000,000 or requires payments
exceeding $1,000,000 in any year;
(k) any security interest purported to be created by the Pledge
Agreement shall cease to be, or shall be asserted by Parent not to be, a
valid, perfected, first priority (except as otherwise expressly provided in
this Agreement or the Pledge Agreement) security interest in the collateral
covered thereby, except to the extent that any such loss of perfection or
priority results from the failure of the Collateral Agent to maintain
possession of certificates representing securities pledged under the Pledge
Agreement;
(l) any Governmental Authority with insurance regulatory powers shall
issue any order of conservation, supervision, liquidation, rehabilitation
or similar order relating to the Company or any other direct or indirect
subsidiary of Parent engaged in the Life Insurance Business;
(m) prior to any sale or transfer of all or substantially all of the
assets of Westfield pursuant to a transaction permitted under Section
6.04(iii), the Company or Westfield shall at any time cease to be a direct,
wholly owned Subsidiary of Parent;
(n) following any sale or transfer of all or substantially all of the
assets of Westfield pursuant to a transaction permitted under Section
6.04(iii), the Company or the Subsidiary holding all or substantially all
of the assets of Westfield shall at any time cease to be a direct, wholly
owned Subsidiary of Parent;
47
(o) there shall have occurred a Change in Control;
(p) the A.M. Best Rating shall be less than A-; or
(q) the guarantee of Parent under Section 9.16 shall cease to be in
full force or effect or Parent shall disaffirm its liability in respect
thereof; then, and in every such event (other than an event with respect to
Parent described in paragraph (g) or (h) above), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at
the request of the Required Lenders shall, by notice to Parent, take either
or both of the following actions, at the same or different times: (i)
terminate forthwith the Commitments and (ii) declare the Loans then
outstanding to be forthwith due and payable in whole or in part, whereupon
the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and any unpaid accrued Fees and all other
liabilities of Parent accrued hereunder and under any other Loan Document,
shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by Parent, anything contained herein or in any other Loan Document
to the contrary notwithstanding; and in any event with respect to Parent
described in paragraph (g) or (h) above, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees and all
other liabilities of Parent accrued hereunder and under any other Loan
Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by Parent, anything contained herein or in any other Loan
Document to the contrary notwithstanding.
ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
48
In order to expedite the transactions contemplated by this Agreement,
The Chase Manhattan Bank is hereby appointed to act as Administrative Agent and
as Collateral Agent on behalf of the Lenders (for purposes of this Article VIII,
the Administrative Agent and the Collateral Agent are referred to collectively
as the "Agents"). Each of the Lenders and each assignee of any such Lender,
------
hereby irrevocably authorizes the Agents to take such actions on behalf of such
Lender or assignee and to exercise such powers as are specifically delegated to
the Agents by the terms and provisions hereof and of the other Loan Documents,
together with such actions and powers as are reasonably incidental thereto. The
Administrative Agent is hereby expressly authorized by the Lenders, without
hereby limiting any implied authority, (a) to receive on behalf of the Lenders
all payments of principal of and interest on the Loans and all other amounts due
to the Lenders hereunder, and promptly to distribute to each Lender its proper
share of each payment so received; (b) to give notice on behalf of each of the
Lenders to the Borrowers of any Event of Default specified in this Agreement of
which the Administrative Agent has actual knowledge acquired in connection with
its agency hereunder; and (c) to distribute to each Lender copies of all
notices, financial statements and other materials delivered by the Borrowers
pursuant to this Agreement or the other Loan Documents as received by the
Administrative Agent. Without limiting the generality of the foregoing, the
Agents are hereby expressly authorized to execute any and all documents
(including releases) with respect to the Collateral and the rights of the
Secured Parties with respect thereto, as contemplated by and in accordance with
the provisions of this Agreement and the Pledge Agreement.
Neither the Agents nor any of their respective directors, officers,
employees or agents as or on behalf of the Agents shall be liable as such for
any action taken or omitted by any of them except for its or his own gross
negligence or wilful misconduct, or be responsible for any statement, warranty
or representation herein or the contents of any document delivered in connection
herewith, or be required to ascertain or to make any inquiry concerning the
performance or observance by the Borrowers of any of the terms, conditions,
covenants or agreements contained in any Loan Document. The Agents shall not be
responsible to the Lenders for the due execution, genuineness, validity,
enforceability or effectiveness of this Agreement or any other Loan Documents,
instruments or agreements. The Agents shall in all cases be fully protected in
acting, or refraining from acting, in accordance with written instructions
signed by the Required Lenders and, except as otherwise specifically provided
herein, such instructions and any action or inaction pursuant thereto shall be
binding on all the Lenders. Each Agent shall, in the absence of knowledge to
the contrary, be entitled to rely on any instrument or document believed by it
in good faith to be genuine and correct and to have been signed or sent by the
proper person or persons. Neither the Agents nor any of their respective
directors, officers, employees or agents shall have any responsibility to the
Borrowers on account of the failure of or delay in performance or breach by any
Lender of any of its obligations hereunder or to any Lender on account of the
failure of or delay in performance or breach by any other Lender or the
Borrowers of any of their respective obligations hereunder or under any other
Loan Document or in connection herewith or therewith. Each of the Agents may
execute any and all duties hereunder by or through agents or employees and shall
be entitled to rely upon the advice of legal counsel selected by it with respect
to all matters arising hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
49
The Lenders hereby acknowledge that neither Agent shall be under any
duty to take any discretionary action permitted to be taken by it pursuant to
the provisions of this Agreement unless it shall be requested in writing to do
so by the Required Lenders.
Subject to the appointment and acceptance of a successor Agent as
provided below, either Agent may resign at any time by notifying the Lenders and
Parent. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Agent gives notice of its resignation, then the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent having a combined capital
and surplus of at least $500,000,000 or an Affiliate of any such bank. Upon the
acceptance of any appointment as Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent and the retiring Agent shall be
discharged from its duties and obligations hereunder. After the Agent's
resignation hereunder, the provisions of this Article and Section 9.05 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Agent.
With respect to the Loans made by it hereunder, each Agent in its
individual capacity as Lender and not as Agent shall have the same rights and
powers as any other Lender and may exercise the same as though it were not an
Agent, and the Agents and their Affiliates may accept deposits from, lend money
to and generally engage in any kind of business with Parent, the Company or any
Subsidiary or other Affiliate thereof as if it were not an Agent.
Each Lender agrees (a) to reimburse the Agents, on demand, in the
amount of its pro rata share (based on its outstanding Loans and unused
Commitments hereunder) of any expenses incurred for the benefit of the Lenders
by the Agents, including counsel fees and compensation of agents and employees
paid for services rendered on behalf of the Lenders, that shall not have been
reimbursed by the Borrowers and (b) to indemnify and hold harmless each Agent
and any of its directors, officers, employees or agents, on demand, in the
amount of such pro rata share, from and against any and all liabilities, taxes,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by or asserted against it in its capacity as Agent or any of them
in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by it or any of them under this
Agreement or any other Loan Document, to the extent the same shall not have been
reimbursed by the Borrowers, provided that no Lender shall be liable to an Agent
--------
or any such other indemnified person for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements which are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Agent or any of its directors, officers,
employees or agents; provided that no payment need be made nor any portion
thereof refunded prior to such determination.
Each Lender acknowledges that it has, independently and without
reliance upon the Agents or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this
50
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Agents or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement
or any other Loan Document, any related agreement or any document furnished
hereunder or thereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. Notices and other communications provided for herein
--------
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to Parent or the Company, to either at Guarantee Centre, 0000
Xxxxxx Xxxxx Xxxxx, Xxxxx, Xxxxxxxx 00000-0000, Attention of Xxxxxxx X.
Xxxxxxx (Telecopy No. (000) 000-0000);
(b) if to the Administrative Agent, to The Chase Manhattan Bank, Xxx
Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxx Xxxxxx
(Telecopy No. (000) 000-0000), with a copy to The Chase Manhattan Bank, at
000 Xxxx Xxxxxx, Xxx Xxxx 00000, Attention of Xxxxx Xxxxxxx (Telecopy No.
(000) 000-0000); and
(c) if to a Lender, to it at its address (or telecopy number) set
forth on Schedule 2.01 or in the Assignment and Acceptance pursuant to
which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
----------------------
representations and warranties made by Parent or the Company herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and shall survive the making by the Lenders
of the Loans, regardless of any investigation made by the Lenders or on their
behalf, and shall continue in full force and effect as long as the principal of
or any accrued interest on any Loan or any Fee or any other amount payable under
this Agreement or any other Loan Document is outstanding and unpaid and so long
as the Commitments have not been terminated. The provisions of Sections 2.12,
2.14, 2.18, 9.05 and 9.16 shall remain operative and in full force and effect
regardless of the expiration of the term of this Agreement, the consummation of
the transactions contemplated hereby, the repayment of any of the Loans, the
expiration of the Commitments, the invalidity or unenforceability of any term
51
or provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent, the Collateral Agent or any
Lender.
SECTION 9.03. Binding Effect. This Agreement shall become effective when it
---------------
shall have been executed by Parent, the Company and the Administrative Agent and
when the Administrative Agent shall have received counterparts hereof which,
when taken together, bear the signatures of each of the other parties hereto,
and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective permitted successors and assigns.
SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement any of
-----------------------
the parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of Parent, the Company, the Administrative Agent or
the Lenders that are contained in this Agreement shall bind and inure to the
benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion
of its interests, rights and obligations under this Agreement (including all or
a portion of its Commitment and the Loans at the time owing to it); provided,
--------
however, that (i) except in the case of an assignment to a Lender or an
-------
Affiliate of a Lender, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 (or, if less, the entire
remaining amount of such Lender's Commitment or Loans of the applicable Class),
(ii) the parties to each such assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500 and (iii) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire. Upon acceptance and recording pursuant to paragraph (e) of this
Section 9.04, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five Business Days after the
execution thereof, (A) the assignee thereunder shall be a party hereto and, to
the extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement and (B) the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto but shall continue to be entitled
to the benefits of Sections 2.12, 2.14, 2.18, 9.05 and 9.16, as well as to any
Fees accrued for its account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitment, and the outstanding balance of its Loans, in each case without
giving effect to assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance, (ii) except as set forth in (i) above,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
52
representations made in or in connection with this Agreement, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, any other Loan Document or any other instrument or document furnished
pursuant hereto, or the financial condition of Parent, the Company or any
Subsidiary or the performance or observance by Parent, the Company or any
Subsidiary of any of its obligations under this Agreement, any other Loan
Document or any other instrument or document furnished pursuant hereto; (iii)
such assignee represents and warrants that it is legally authorized to enter
into such Assignment and Acceptance; (iv) such assignee confirms that it has
received a copy of this Agreement, together with copies of the most recent
financial statements referred to in Section 3.05(a) or delivered pursuant to
Section 5.04 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, the Collateral Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (vi) such assignee appoints
and authorizes the Administrative Agent and the Collateral Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Administrative Agent and the Collateral Agent,
respectively, by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
--------
conclusive and the Borrowers, the Administrative Agent, the Collateral Agent and
the Lenders may treat each person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrowers, the Collateral Agent and any Lender,
at any reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) above and, if required, the written consent of the Borrower and the
Administrative Agent to such assignment, the Administrative Agent shall (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Lenders. No
assignment shall be effective unless it has been recorded in the Register as
provided in this paragraph (e).
(f) Each Lender may without the consent of the Borrowers or the
Administrative Agent sell participations to one or more banks or other entities
in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided, however, that (i) such Lender's obligations under this Agreement shall
-------- -------
remain unchanged, (ii) such Lender shall remain
53
solely responsible to the other parties hereto for the performance of such
obligations, (iii) the participating banks or other entities shall be entitled
to the benefit of the cost protection provisions contained in Sections 2.12,
2.14 and 2.18 to the same extent as if they were Lenders and (iv) the Borrowers,
the Administrative Agent and the Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrowers relating to the Loans and to approve
any amendment, modification or waiver of any provision of this Agreement (other
than amendments, modifications or waivers decreasing any fees payable hereunder
or the amount of principal of or the rate at which interest is payable on the
Loans, extending any scheduled principal payment date or date fixed for the
payment of interest on the Loans or increasing or extending the Commitments).
(g) Any Lender or participant may, in connection with any assignment
or participation or proposed assignment or participation pursuant to this
Section 9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrowers furnished to such Lender
by or on behalf of the Borrowers.
(h) Any Lender may at any time assign all or any portion of its
rights under this Agreement to a Federal Reserve Bank to secure extensions of
credit by such Federal Reserve Bank to such Lender; provided that no such
--------
assignment shall release a Lender from any of its obligations hereunder or
substitute any such Bank for such Lender as a party hereto. In order to
facilitate such an assignment to a Federal Reserve Bank, the applicable Borrower
shall, at the request of the assigning Lender, duly execute and deliver to the
assigning Lender a promissory note or notes evidencing the Loans made to such
Borrower by the assigning Lender hereunder.
(i) Neither Parent nor the Company shall assign or delegate any of
its rights or duties hereunder without the prior written consent of the
Administrative Agent and each Lender, and any attempted assignment without such
consent shall be null and void.
SECTION 9.05. Expenses; Indemnity. (a) Each of Parent and the Company,
--------------------
jointly and severally, agrees to pay all out-of-pocket expenses incurred by the
Administrative Agent and the Collateral Agent in connection with the syndication
of the credit facilities provided for herein and the preparation and
administration of this Agreement and the other Loan Documents or in connection
with any amendments, modifications or waivers of the provisions hereof or
thereof (whether or not the transactions hereby or thereby contemplated shall be
consummated) or incurred by the Administrative Agent, the Collateral Agent or
any Lender in connection with the enforcement or protection of its rights in
connection with this Agreement and the other Loan Documents or in connection
with the Loans made hereunder, including the fees, charges and disbursements of
Cravath, Swaine & Xxxxx, counsel for the Administrative Agent and the Collateral
Agent, and, in connection with any such enforcement or protection, the fees,
charges and disbursements of any other counsel for the Administrative Agent, the
Collateral Agent or any Lender.
(b) Each of Parent and the Company, jointly and severally, agrees to
indemnify the Administrative Agent, the Collateral Agent and each Lender, each
Affiliate of any of the foregoing persons and each of their respective
directors, officers, employees
54
and agents (each such person being called an "Indemnitee") against, and to hold
----------
each Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses, including reasonable counsel fees, charges and
disbursements, incurred by or asserted against any Indemnitee arising out of, in
any way connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their respective obligations
thereunder or the consummation of the Transactions and the other transactions
contemplated thereby, (ii) the use of the proceeds of the Loans, or (iii) any
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto; provided that (i)such
--------
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee and
(ii) the Company shall not be required to indemnify any Indemnitee for
indemnified claims attributable solely to activities of Parent.
(c) The provisions of this Section 9.05 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the invalidity
or unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Administrative Agent,
the Collateral Agent or any Lender. All amounts due under this Section 9.05
shall be payable on written demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall have occurred
----------------
and be continuing, each Lender is hereby authorized at any time and from time to
time, 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 and other indebtedness at any time owing by such Lender to or for the
credit or the account of any Borrower against any of and all the obligations of
any Borrower now or hereafter existing under this Agreement and other Loan
Documents held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement or such other Loan Document and
although such obligations may be unmatured. The rights of each Lender under
this Section 9.06 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.
SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
---------------
(OTHER THAN AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the
-------------------
Administrative Agent, the Collateral Agent or any Lender in exercising any power
or right hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the
Collateral Agent and the Lenders hereunder and under the other Loan Documents
are cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or any other
55
Loan Document or consent to any departure by any Borrower therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) below,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice or demand on any Borrower in any
case shall entitle any Borrower to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement, the Pledge Agreement nor any provision
hereof or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by
Parent, the Company and the Required Lenders or, in the case of the Pledge
Agreement, pursuant to an agreement or agreements in writing entered into by
Parent and the Collateral Agent and approved in writing by the Required Lenders;
provided, however, that no such agreement shall (i) decrease the principal
-------- -------
amount of, or extend the maturity of or any scheduled principal payment date or
date for the payment of any interest on, any Loan, or waive or excuse any such
payment or any part thereof, or decrease the rate of interest on any Loan,
without the prior written consent of each Lender affected thereby, (ii) change
or extend the Commitment or decrease, extend the date for payment of or waive or
excuse the payment of any of the Commitment Fees of any Lender without the prior
written consent of such Lender, (iii) change any provisions of any Loan Document
in a manner that by its terms adversely affects the rights in respect of
payments due to Lenders holding Loans of any Class differently than those
holding Loans of any other Class, without the written consent of Lenders holding
a majority in interest of the outstanding Loans and unused Commitments of each
affected Class (in addition to the consent of the Required Lenders) or (iv)
amend or modify the provisions of Section 2.15 or 9.04(i), the provisions of
this Section, the definition of the term "Required Lenders" or release all or a
material part of the Collateral or release Parent from or limit its obligations
under its guarantee set forth in Section 9.16, without the prior written consent
of each Lender; provided further that no such agreement shall amend, modify or
----------------
otherwise affect the rights or duties of the Administrative Agent or the
Collateral Agent hereunder or under any other Loan Document without the prior
written consent of the Administrative Agent or the Collateral Agent.
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein to
-------------------------
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively the "Charges"), shall exceed the maximum
-------
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
------------
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section 9.09 shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 9.10. Entire Agreement. This Agreement, the fee letter dated March
-----------------
18, 1998, between the Borrowers and the Administrative Agent and the other Loan
Documents constitute the entire contract between the parties relative to the
subject matter
56
hereof. Any other previous agreement among the parties with respect to the
subject matter hereof is superseded by this Agreement and the other Loan
Documents. Nothing in this Agreement or in the other Loan Documents, expressed
or implied, is intended to confer upon any party other than the parties hereto
and thereto any rights, remedies, obligations or liabilities under or by reason
of this Agreement or the other Loan Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
---------------------
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
SECTION 9.12. Severability. In the event any one or more of the provisions
-------------
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 9.13. Counterparts. This Agreement may be executed in counterparts
-------------
(and by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 9.03.
Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.
SECTION 9.14. Headings. Article and Section headings and the Table of
---------
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) Each of
--------------------------------------------
Parent and the Company hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York City,
and any appellate court from any
57
thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent,
the Collateral Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents against either
Parent or the Company, or the properties of either, in the courts of any
jurisdiction.
(b) Each of Parent and the Company hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
the other Loan Documents in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.16. Parent Guarantee. (a) Parent hereby unconditionally and
-----------------
irrevocably guarantees, as a primary obligor and not merely as surety, the due,
punctual and complete payment and performance by the Company when and as due,
whether at the stated maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, of the Obligations of the Company.
(b) Parent agrees that whenever, at any time, or from time to time, it
shall make any payment to the Administrative Agent for the benefit of any
Secured Party on account of its liability hereunder, it will notify the
Administrative Agent in writing that such payment is made under this Section
9.16 for such purpose; provided that the failure of Parent to provide such
--------
notice shall not preclude the application of such payment to the complete or
partial satisfaction of Parent's obligations hereunder following Parent's notice
to the Administrative Agent of such payment.
(c) Notwithstanding any payment or payments made by Parent hereunder
or any setoff or application of funds of Parent by any Lender, Parent shall not
be entitled to be subrogated to any of the rights of any Lender against the
Company or any collateral security or guarantee or right of offset held by any
Lender for the payment of the Obligations, nor shall Parent seek or be entitled
to seek any contribution or reimbursement from the Company in respect of
payments made by Parent hereunder, until all amounts owing to the Lenders by
Parent or the Company on account of the Obligations are paid in full and the
Commitments are terminated. If any amount shall be paid to Parent on account of
such subrogation rights at any time when all of the Obligations shall not have
been paid in full and the Commitments shall not have been terminated, such
amount shall be held by Parent in trust for the Lenders, segregated from
58
other funds of Parent, and shall forthwith upon receipt by Parent be turned over
to the Administrative Agent in the exact form received by Parent (duly endorsed
by Parent to the Administrative Agent, if required), to be applied against the
Obligations, whether matured or unmatured, at such time and in such order as the
Administrative Agent may determine.
(d) The provisions of this Section 9.16 shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by any Lender for any reason whatsoever, including, without
limitation, upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of Parent or the Company or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, Parent or the Company or any substantial part of the property of
either, or otherwise, all as though such payments had not been made.
(e) The obligations of Parent under this Section 9.16 shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including, without limitation, any claim of waiver, release, surrender,
alteration or compromise of the Obligations, and shall not be subject to any
defense or setoff, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
Parent under this Section 9.16 shall not be discharged or impaired or otherwise
affected by the failure of the Administrative Agent or any Lender to assert any
claim or demand or to enforce any remedy under any guarantee or any other
agreement, by any waiver or modification of any thereof, by any default, failure
or delay, wilful or otherwise, in the performance of the Obligations by the
Borrower, or by any other act or omission which may or might in any manner or to
any extent vary the risk of Parent or otherwise operate as a discharge of Parent
as a matter of law or equity (other than the payment in full of all the
Obligations).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
THE GUARANTEE LIFE COMPANIES INC.,
by
Xxxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
and CFO
59
GUARANTEE LIFE INSURANCE COMPANY,
by
Xxxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
and CFO
THE CHASE MANHATTAN BANK, individually and as
Administrative Agent and Collateral Agent,
by
Xxxxx Xxxxxxx
-------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
[OTHER LENDERS]
EXHIBIT A
[Form of]
THE GUARANTEE LIFE COMPANIES INC.
ADMINISTRATIVE QUESTIONNAIRE
Please accurately complete the following information and return via Telecopy to
the attention of [Xxxxx Xxxxxx] at The Chase Manhattan Bank Agency Services
Corporation as soon as possible, at Telecopy No. (000) 000-0000.
-------------------------------------------------------------------------------
LENDER LEGAL NAME TO APPEAR IN DOCUMENTATION:
---------------------------------------------
GENERAL INFORMATION - DOMESTIC LENDING OFFICE:
----------------------------------------------
Institution Name:
Street Address:
City, State, Zip Code:
GENERAL INFORMATION - EURODOLLAR LENDING OFFICE:
------------------------------------------------
Institution Name:
Street Address:
City, State, Zip Code:
POST-CLOSING, ONGOING CREDIT CONTACTS/NOTIFICATION METHODS:
-----------------------------------------------------------
CREDIT CONTACTS:
Primary Contact:
Street Address:
City, State, Zip Code:
Phone Number:
Telecopy Number:
Backup Contact:
Street Address:
City, State, Zip Code:
Phone Number:
Telecopy Number:
TAX WITHHOLDING:
----------------
Nonresident Alien _______ Y* _______ N
* Form 4224 Enclosed
Tax ID Number _________________________
POST-CLOSING, ONGOING ADMINISTRATIVE CONTACTS/NOTIFICATION METHODS:
-------------------------------------------------------------------
ADMINISTRATIVE CONTACTS - BORROWINGS, PAYDOWNS, FEES, ETC.
Contact:
Street Address:
City, State, Zip Code:
Phone Number:
Telecopy Number:
PAYMENT INSTRUCTIONS:
---------------------
Name of Bank to which funds are to be transferred:
Routing Transit/ABA number of Bank to which funds are to be transferred:
Name of Account, if applicable:
3
Account Number:
Additional information:
MAILINGS:
---------
Please specify the person to whom the applicable Borrower should send financial
and compliance information received subsequent to the closing (if different from
primary credit contact):
Name:
Street Address:
City, State, Zip Code:
It is very important that all the above information be accurately completed and
---
that this questionnaire be returned to the person specified in the introductory
paragraph of this questionnaire as soon as possible. If there is someone other
than yourself who should receive this questionnaire, please notify us of that
person's name and telecopy number and we will telecopy a copy of the
questionnaire. If you have any questions about this form, please call [Xxxxx
Xxxxxx] at (000) 000-0000.
EXHIBIT B
[Form of]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of May 28, 1998
(the "Credit Agreement"), among The Guarantee Life Companies Inc., a Delaware
corporation ("Parent"), Guarantee Life Insurance Company, a Nebraska stock life
insurance company (the "Company"), the lenders listed on Schedule 2.01 thereto
(the "Lenders") and The Chase Manhattan Bank, as administrative agent for the
Lenders (in such capacity, the "Administrative Agent") and Collateral Agent.
Terms defined in the Credit Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of the Effective Date set forth below (but not prior
to the registration of the information contained herein in the Register pursuant
to Section 9.04(e) of the Credit Agreement), the interests set forth below (the
"Assigned Interest") in the Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents, including, without limitation, the
amounts and percentages set forth below of (i) the Revolving Commitments of the
Assignor on the Effective Date and (ii) the [Revolving Loans][and][Term Loans]
owing to the Assignor which are outstanding on the Effective Date. Each of the
Assignor and the Assignee hereby makes and agrees to be bound by all the
representations, warranties and agreements set forth in Section 9.04(c) of the
Credit Agreement, a copy of which has been received by each such party. From
and after the Effective Date (i) the Assignee shall be a party to and be bound
by the provisions of the Credit Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and under the Loan Documents and (ii) the Assignor shall, to
the extent of the interests assigned by this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
2. This Assignment and Acceptance is being delivered to the
Administrative Agent together with (i) if the Assignee is organized under the
laws of a jurisdiction outside the United States, the forms specified in Section
2.18(f) of the Credit Agreement, duly completed and executed by such Assignee,
(ii) if the Assignee is not already a Lender under the Credit Agreement, an
Administrative Questionnaire in the form of Exhibit A to the Credit Agreement
and (iii) a processing and recordation fee of $3,500.
3. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
2
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment):
Percentage Assigned of Applicable
Facility/Commitment (set forth,
Principal Amount to at least 8 decimals, as a
Assigned percentage of the Facility and
the aggregate Commitments of all
Lenders thereunder)
Facility/Commitment
-------------------
Revolving Credit $ %
Term Loans $ %
The terms set forth above are
hereby agreed to:
_________________, as Assignor
by:___________________________
Name:
Title:
_________________, as Assignee
by:___________________________
Name:
Title:
EXHIBIT C
FORM OF BORROWING REQUEST
The Chase Manhattan Bank, as Administrative Agent for
the Lenders referred to below,
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention of [ ]
[Date]
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of May 28, 1998
(the "Credit Agreement"), among The Guarantee Life Companies Inc. ("Parent"),
Guarantee Life Insurance Company (the "Company"), the lenders from time to time
party thereto (the "Lenders") and The Chase Manhattan Bank, as administrative
agent for the Lenders (in such capacity, the "Agent") and collateral agent.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement. The undersigned hereby
gives you notice pursuant to Section 2.03 of the Credit Agreement that it
requests a Borrowing of [Revolving Loans][Term Loans] under the Credit
Agreement, and in that connection sets forth below the terms on which such
Borrowing is requested to be made:
(A) Borrower ______________________
(B) Date of Borrowing
(which is a Business Day) ______________________
(C) Principal Amount of
Borrowing 1/ ______________________
-
(D) Interest rate basis 1/ ______________________
-
(E) Interest Period and the last
1/ Not less than $5,000,000 and in an integral multiple of $1,000,000, but in
- any event not exceeding the available Commitments of the applicable Class.
2/ Specify Eurodollar Borrowing or ABR Borrowing.
-
day thereof 1/ ______________________
-
(F) Funds are requested to be disbursed to the Borrower's account with The
Chase Manhattan Bank (Account No. ).
Upon acceptance of any or all of the Loans offered by the Lenders in
response to this request, the undersigned Borrower shall be deemed to have
represented and warranted that the conditions to lending specified in Sections
4.01(b) and (c) of the Credit Agreement have been satisfied.
-------------------
3/ Which shall be subject to the definition of "Interest Period" and end not
- later than the applicable Maturity Date (applicable for Eurodollar
Borrowings only)
[BORROWER],
by
-----------------------------
Name:
Title: [Responsible Officer]
EXHIBIT D
PLEDGE AGREEMENT dated as of May [ ], 1998,
between THE GUARANTEE LIFE COMPANIES INC., a Delaware corporation
(the "Pledgor"), and THE CHASE MANHATTAN BANK, a New York banking
-------
corporation, as collateral agent (in such capacity, the
"Collateral Agent") for the Secured Parties (as defined below).
----------------
Reference is made to the Credit Agreement dated as of May 28, 1998 (as
amended, supplemented or otherwise modified from time to time, the "Credit
------
Agreement"), among the Pledgor, Guarantee Life Insurance Company (the "Company"
--------- -------
and, together with the Pledgor, the "Borrowers"), the lenders from time to time
---------
party thereto (the "Lenders") and The Chase Manhattan Bank, as administrative
-------
agent for the Lenders and as Collateral Agent. Terms used and not defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
The Lenders, the Administrative Agent and the Collateral Agent are collectively
referred to herein as the "Secured Parties".
---------------
The Lenders have agreed to make Loans to the Borrowers pursuant to,
and upon the terms and subject to the conditions specified in, the Credit
Agreement. The Company is a wholly owned subsidiary of the Pledgor, and the
Pledgor has guaranteed all obligations of the Company under the Credit
Agreement. The obligations of the Lenders to make Loans are conditioned upon,
among other things, the execution and delivery by the Pledgor of a Pledge
Agreement in the form hereof to secure (a) the due and punctual payment by the
Borrowers of (i) the principal of and premium, if any, and interest (including
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise and (ii) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of the Borrowers to the
Secured Parties under the Credit Agreement and the other Loan Documents and (b)
the due and punctual performance of all covenants, agreements, obligations and
liabilities of the Borrowers under or pursuant to the Credit Agreement and the
other Loan Documents (all the monetary and other obligations referred to in the
preceding clauses (a) and (b) being referred to collectively as the
"Obligations").
-----------
2
Accordingly, the Pledgor and the Collateral Agent, on behalf of itself
and each Secured Party (and each of their respective successors or assigns),
hereby agree as follows:
SECTION 1. Pledge. As security for the payment and performance, as
-------
the case may be, in full of the Obligations, the Pledgor hereby transfers,
grants, bargains, sells, conveys, hypothecates, pledges, sets over and delivers
unto the Collateral Agent, its successors and assigns, and hereby grants to the
Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, a security interest in (a) all of the Pledgor's right, title
and interest in, to and under the shares of capital stock owned by it and listed
on Schedule I hereto and any shares of capital stock of any Restricted
Subsidiary created or acquired by the Pledgor, and any Subsidiary upon becoming
a Restricted Subsidiary, and the certificates representing all such shares (the
"Pledged Stock"); provided that the Pledged Stock shall not, to the extent that
------------- --------
applicable law requires that a Restricted Subsidiary of the Pledgor issue
directors' qualifying shares, include such qualifying shares; (b) all other
property that may be delivered to and held by the Collateral Agent pursuant to
the terms hereof; (c) subject to Section 5, all payments of principal or
interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed, in respect of, in exchange for or
upon the conversion of the securities referred to in clause (a) above; (d)
subject to Section 5, all rights and privileges of the Pledgor with respect to
the securities and other property referred to in clauses (a), (b) and (c) above;
and (e) all proceeds of any of the foregoing (the items referred to in clauses
(a) through (e) above being collectively referred to as the "Collateral"). Upon
----------
delivery to the Collateral Agent, any Pledged Stock now or hereafter included in
the Collateral shall be accompanied by stock powers duly executed in blank or
other instruments of transfer satisfactory to the Collateral Agent and by such
other instruments and documents as the Collateral Agent may reasonably request.
Each delivery of Pledged Stock shall be accompanied by a schedule describing the
securities theretofore and then being pledged hereunder, which schedule shall be
attached hereto as Schedule I and made a part hereof. Each schedule so delivered
shall supersede any prior schedules so delivered.
TO HAVE AND TO HOLD the Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Collateral Agent, its successors and assigns, for the ratable benefit
of the Secured Parties, forever; subject, however, to the terms, covenants and
------- -------
conditions hereinafter set forth.
SECTION 2. Delivery of the Collateral. The Pledgor agrees promptly
---------------------------
to deliver or cause to be delivered to the Collateral Agent any and all Pledged
Stock, and any and all certificates or other instruments or documents
representing the Collateral.
3
SECTION 3. Representations, Warranties and Covenants. The Pledgor
-----------------------------------------
hereby represents, warrants and covenants, as to itself and the Collateral
pledged by it hereunder, to and with the Collateral Agent that:
(a) the Pledged Stock represents that percentage as set forth on
Schedule I of the issued and outstanding shares of each class of the
capital stock of each issuer with respect thereto;
(b) except for the security interest granted hereunder, the Pledgor
(i) is and will at all times continue to be the direct owner, beneficially
and of record, of the Pledged Stock indicated on Schedule I, (ii) holds the
same free and clear of all Liens, (iii) will make no assignment, pledge,
hypothecation or transfer of, or create or permit to exist any security
interest in or other Lien on, the Collateral, other than pursuant hereto,
and (iv) subject to Section 5, will cause any and all Collateral, whether
for value paid by the Pledgor or otherwise, to be forthwith deposited with
the Collateral Agent and pledged or assigned hereunder;
(c) the Pledgor (i) has the power and authority to pledge the
Collateral in the manner hereby done or contemplated and (ii) will defend
its title or interest thereto or therein against any and all Liens (other
than the Lien created by this Agreement), however arising, of all persons
whomsoever;
(d) no consent of any other person (including stockholders or
creditors of the Pledgor) and no consent or approval of any Governmental
Authority or any securities exchange was or is necessary to the validity of
the pledge effected hereby;
(e) by virtue of the execution and delivery by the Pledgor of this
Agreement, when the Pledged Stock, certificates or other documents
representing or evidencing the Collateral are delivered to the Collateral
Agent in accordance with this Agreement, the Collateral Agent will obtain a
valid and perfected first lien upon and security interest in such Pledged
Stock as security for the payment and performance of the Obligations;
(f) the pledge effected hereby is effective to vest in the Collateral
Agent, for the benefit of the Secured Parties, the rights of the Collateral
Agent in the Collateral as set forth herein, except, in connection with the
exercise of remedies by the Collateral Agent following an Event of Default
by the Borrower, compliance by the Collateral Agent with applicable
Nebraska law including Neb. Rev. Stat. (S)(S) 44-2126 and 44-6115 and
applicable Ohio law including Ohio Revised Code Section 3901.321 and
applicable Pennsylvania law including 40 PENNSYLVANIA STATUTES (S)(S)
8991.1401, 8991.1402 and 8991.1403;
(g) all of the Pledged Stock has been duly authorized and validly
issued and is fully paid and nonassessable;
4
(h) all information set forth herein relating to the Pledged Stock is
accurate and complete in all material respects as of the date hereof; and
(i) the pledge of the Pledged Stock pursuant to this Agreement does
not violate Regulation G, T, U or X of the Federal Reserve Board or any
successor thereto as of the date hereof.
SECTION 4. Registration in Nominee Name; Denominations. The
--------------------------------------------
Collateral Agent, on behalf of the Secured Parties, shall have the right (in its
sole and absolute discretion) to hold the Pledged Stock in its own name as
pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the
Pledgor, endorsed or assigned in blank or in favor of the Collateral Agent. The
Pledgor will promptly give to the Collateral Agent copies of any notices or
other communications received by it with respect to Pledged Stock registered in
the name of the Pledgor.
SECTION 5. Voting Rights; Dividends and Interest, etc. (a) Unless
-------------------------------------------
and until an Event of Default shall have occurred and be continuing:
(i) The Pledgor shall be entitled to exercise any and all voting
and/or other consensual rights and powers inuring to an owner of Pledged
Stock or any part thereof for any purpose consistent with the terms of this
Agreement, the Credit Agreement and the other Loan Documents; provided,
--------
however, that the Pledgor will not be entitled to exercise any such right
-------
if the result thereof could materially and adversely affect the rights
inuring to a holder of the Pledged Stock or the rights and remedies of any
of the Secured Parties under this Agreement or the Credit Agreement or any
other Loan Document or the ability of the Secured Parties to exercise the
same.
(ii) The Collateral Agent shall execute and deliver to the Pledgor, or
cause to be executed and delivered to the Pledgor, all such proxies, powers
of attorney and other instruments as the Pledgor may reasonably request for
the purpose of enabling the Pledgor to exercise the voting and/or
consensual rights and powers it is entitled to exercise pursuant to
subparagraph (i) above and to receive the cash dividends it is entitled to
receive pursuant to subparagraph (iii) below.
(iii) The Pledgor shall be entitled to receive and retain any and all
cash dividends paid on the Pledged Stock to the extent and only to the
extent that such cash dividends are permitted by, and otherwise paid in
accordance with, the terms and conditions of the Credit Agreement, the
other Loan Documents and applicable laws. All noncash dividends, interest
and principal, and all dividends, interest and principal paid or payable in
cash or otherwise in connection with a partial or total liquidation or
dissolution, return of capital, capital surplus or paid-in surplus, and all
other distributions (other than distributions referred to in the preceding
sentence) made on or in respect of the Pledged Stock, whether paid or
payable in
5
cash or otherwise, whether resulting from a subdivision, combination or
reclassification of the outstanding capital stock of the issuer of any
Pledged Stock or received in exchange for Pledged Stock or any part
thereof, or in redemption thereof, or as a result of any merger,
consolidation, acquisition or other exchange of assets to which such issuer
may be a party or otherwise, shall be and become part of the Collateral,
and, if received by the Pledgor, shall not be commingled by the Pledgor
with any of its other funds or property but shall be held separate and
apart therefrom, shall be held in trust for the benefit of the Collateral
Agent and shall be forthwith delivered to the Collateral Agent in the same
form as so received (with any necessary endorsement).
(b) Upon the occurrence and during the continuance of an Event of
Default, all rights of the Pledgor to dividends, interest or principal that the
Pledgor is authorized to receive pursuant to paragraph (a)(iii) above shall
cease, and all such rights shall thereupon become vested in the Collateral
Agent, which shall have the sole and exclusive right and authority to receive
and retain such dividends, interest or principal. All dividends, interest or
principal received by any Pledgor contrary to the provisions of this Section 5
shall be held in trust for the benefit of the Collateral Agent, shall be
segregated from other property or funds of the Pledgor and shall be forthwith
delivered to the Collateral Agent upon demand in the same form as so received
(with any necessary endorsement). Any and all money and other property paid over
to or received by the Collateral Agent pursuant to the provisions of this
paragraph (b) shall be retained by the Collateral Agent in an account to be
established by the Collateral Agent upon receipt of such money or other property
and shall be applied in accordance with the provisions of Section 7. After all
Events of Default have been cured or waived, the Collateral Agent shall, within
five Business Days after all such Events of Default have been cured or waived,
repay to the Pledgor all cash dividends, interest or principal (without
interest), that the Pledgor would otherwise be permitted to retain pursuant to
the terms of paragraph (a)(iii) above and which remain in such account.
(c) Upon the occurrence and during the continuance of an Event of
Default, all rights of the Pledgor to exercise the voting and consensual rights
and powers it is entitled to exercise pursuant to paragraph (a)(i) of this
Section 5, and the obligations of the Collateral Agent under paragraph (a)(ii)
of this Section 5, shall cease, and, subject to applicable regulatory and legal
requirements, all such rights shall thereupon become vested in the Collateral
Agent, which shall have the sole and exclusive right and authority to exercise
such voting and consensual rights and powers, provided that, unless otherwise
--------
directed by the Required Lenders, the Collateral Agent shall have the right from
time to time following and during the continuance of an Event of Default to
permit the Pledgor to exercise such rights. After all Events of Default have
been cured or waived, the Pledgor will have the right to exercise the voting and
consensual rights and powers that it would otherwise be entitled to exercise
pursuant to the terms of paragraph (a)(i) above.
SECTION 6. Remedies upon Default. Upon the occurrence and during the
----------------------
continuance of an Event of Default, subject to applicable regulatory and legal
6
requirements, the Collateral Agent may sell the Collateral, or any part thereof,
at public or private sale or at any broker's board or on any securities
exchange, for cash, upon credit or for future delivery as the Collateral Agent
shall deem appropriate. The Collateral Agent shall be authorized at any such
sale (if it deems it advisable to do so) to restrict the prospective bidders or
purchasers to persons who will represent and agree that they are purchasing the
Collateral for their own account for investment and not with a view to the
distribution or sale thereof, and upon consummation of any such sale the
Collateral Agent shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of the Pledgor, and, to the extent permitted by applicable
law, the Pledgor hereby waives all rights of redemption, stay, valuation and
appraisal the Pledgor now has or may at any time in the future have under any
rule of law or statute now existing or hereafter enacted.
The Collateral Agent shall give a Pledgor 10 days' prior written
notice (which the Pledgor agrees is reasonable notice within the meaning of
Section 9-504(3) of the Uniform Commercial Code as in effect in the State of New
York or its equivalent in other jurisdictions) of the Collateral Agent's
intention to make any sale of the Pledgor's Collateral. Such notice, in the
case of a public sale, shall state the time and place for such sale and, in the
case of a sale at a broker's board or on a securities exchange, shall state the
board or exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such board or
exchange. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Collateral Agent may
fix and state in the notice of such sale. At any such sale, the Collateral, or
portion thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may (in its sole and absolute discretion)
determine. The Collateral Agent shall not be obligated to make any sale of any
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given. The Collateral Agent
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In case any sale of all or any
part of the Collateral is made on credit or for future delivery, the Collateral
so sold may be retained by the Collateral Agent until the sale price is paid in
full by the purchaser or purchasers thereof, but the Collateral Agent shall not
incur any liability in case any such purchaser or purchasers shall fail to take
up and pay for the Collateral so sold and, in case of any such failure, such
Collateral may be sold again upon like notice. At any public (or, to the extent
permitted by applicable law, private) sale made pursuant to this Section 6, any
Secured Party may bid for or purchase, free from any right of redemption, stay
or appraisal on the part of the Pledgor (all said rights being also hereby
waived and released), the Collateral or any part thereof offered for sale and
may make payment on account thereof by using any Obligation then due and payable
to it from the Pledgor as a credit against the purchase price, and it may, upon
compliance with the terms of sale, hold, retain and dispose of such property
without further accountability to the Pledgor therefor. For purposes hereof,
(a) a written agreement to purchase the
7
Collateral or any portion thereof shall be treated as a sale thereof, (b) the
Collateral Agent shall be free to carry out such sale pursuant to such agreement
and (c) the Pledgor shall not be entitled to the return of the Collateral or any
portion thereof subject thereto, notwithstanding the fact that after the
Collateral Agent shall have entered into such an agreement all Events of Default
shall have been remedied and the Obligations paid in full. As an alternative to
exercising the power of sale herein conferred upon it, the Collateral Agent may
proceed by a suit or suits at law or in equity to foreclose upon the Collateral
and to sell the Collateral or any portion thereof pursuant to a judgment or
decree of a court or courts having competent jurisdiction or pursuant to a
proceeding by a court-appointed receiver. Any sale pursuant to the provisions of
this Section 6 shall be deemed to conform to the commercially reasonable
standards as provided in Section 9-504(3) of the Uniform Commercial Code as in
effect in the State of New York or its equivalent in other jurisdictions.
SECTION 7. Application of Proceeds of Sale. The proceeds of any sale
--------------------------------
of Collateral pursuant to Section 6, as well as any Collateral consisting of
cash, shall be applied by the Collateral Agent as follows:
FIRST, to the payment of all costs and expenses incurred by the
Collateral Agent or the Administrative Agent in connection with such sale
or otherwise in connection with this Agreement, any other Loan Document or
any of the Obligations, including all court costs and the reasonable fees
and expenses of its agents and legal counsel, the repayment of all advances
made by the Collateral Agent hereunder or under any other Loan Document on
behalf of the Pledgor and any other costs or expenses incurred in
connection with the exercise of any right or remedy hereunder or under any
other Loan Document;
SECOND, to the payment in full of the Obligations (the amounts so
applied to be distributed among the Secured Parties pro rata in accordance
with the amounts of the Obligations owed to them on the date of any such
distribution); and
THIRD, to the Pledgor, its successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of the Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the purchase money by the Collateral Agent or of the officer
making the sale shall be a sufficient discharge to the purchaser or purchasers
of the Collateral so sold and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase money paid over
to the Collateral Agent or such officer or be answerable in any way for the
misapplication thereof.
8
SECTION 8. Reimbursement of Collateral Agent. (a) The Pledgor
----------------------------------
agrees to pay upon demand to the Collateral Agent the amount of any and all
reasonable expenses, including the reasonable fees, other charges and
disbursements of its counsel and of any experts or agents, that the Collateral
Agent may incur in connection with (i) the administration of this Agreement,
(ii) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Collateral Agent hereunder or (iv) the failure by the
Pledgor to perform or observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations under the
other Loan Documents, the Pledgor agrees to indemnify the Collateral Agent and
the Indemnitees (as defined in Section 9.05 of the Credit Agreement) against,
and hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable counsel fees, other
charges and disbursements, incurred by or asserted against any Indemnitee
arising out of, in any way connected with, or as a result of (i) the execution
or delivery of this Agreement or any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations thereunder or the consummation of the
Transactions and the other transactions contemplated thereby or (ii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, provided that such indemnity
--------
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or wilful misconduct of such Indemnitee.
(c) Any amounts payable as provided hereunder shall be additional
Obligations secured hereby. The provisions of this Section 8 shall remain
operative and in full force and effect regardless of the termination of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Obligations, the invalidity or unenforceability of any
term or provision of this Agreement or any other Loan Document or any
investigation made by or on behalf of the Collateral Agent or any other Secured
Party. All amounts due under this Section 8 shall be payable on written demand
therefor and shall bear interest at the rate specified in Section 2.06 of the
Credit Agreement.
SECTION 9. Collateral Agent Appointed Attorney-in-Fact. The Pledgor
--------------------------------------------
hereby appoints the Collateral Agent the attorney-in-fact of the Pledgor for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instrument that the Collateral Agent may deem necessary or
advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Collateral Agent shall have the right, upon the occurrence and during the
continuance of an Event of Default, with full power of substitution either in
the Collateral Agent's name or in the name of the Pledgor, to ask for, demand,
xxx for, collect, receive and give acquittance for any and all moneys due or to
9
become due under and by virtue of any Collateral, to endorse checks, drafts,
orders and other instruments for the payment of money payable to the Pledgor
representing any interest or dividend or other distribution payable in respect
of the Collateral or any part thereof or on account thereof and to give full
discharge for the same, to settle, compromise, prosecute or defend any action,
claim or proceeding with respect thereto, and to sell, assign, endorse, pledge,
transfer and to make any agreement respecting, or otherwise deal with, the same;
provided, however, that nothing herein contained shall be construed as requiring
-------- -------
or obligating the Collateral Agent to make any commitment or to make any inquiry
as to the nature or sufficiency of any payment received by the Collateral Agent,
or to present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby. The Collateral Agent and the other
Secured Parties shall be accountable only for amounts actually received as a
result of the exercise of the powers granted to them herein, and neither they
nor their officers, directors, employees or agents shall be responsible to the
Pledgor for any act or failure to act hereunder, except for their own gross
negligence or wilful misconduct.
SECTION 10. Waivers; Amendment. (a) No failure or delay of the
-------------------
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the other Secured Parties under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provisions of this Agreement or consent to any departure by the
Pledgor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on the Pledgor in any case shall entitle the Pledgor to any
other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into between
the Collateral Agent and the Pledgor, subject to any consent required in
accordance with Section 9.08 of the Credit Agreement.
SECTION 11. Securities Act, etc. In view of the position of the
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Pledgor in relation to the Pledged Stock, or because of other current or future
circumstances, a question may arise under the Securities Act of 1933, as now or
hereafter in effect, or any similar statute hereafter enacted analogous in
purpose or effect (such Act and any such similar statute as from time to time in
effect being called the "Federal Securities Laws") with respect to any
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disposition of the Pledged Stock permitted hereunder. The Pledgor understands
that compliance with the Federal Securities Laws might very strictly limit the
course of conduct of the Collateral Agent if the Collateral Agent were to
attempt to dispose of all or any part of the Pledged Stock, and might also limit
the extent to which or
10
the manner in which any subsequent transferee of any Pledged Stock could dispose
of the same. Similarly, there may be other legal restrictions or limitations
affecting the Collateral Agent in any attempt to dispose of all or part of the
Pledged Stock under applicable Blue Sky or other state securities laws or
similar laws analogous in purpose or effect. The Pledgor recognizes that in
light of such restrictions and limitations the Collateral Agent may, with
respect to any sale of the Pledged Stock, limit the purchasers to those who will
agree, among other things, to acquire such Pledged Stock for their own account,
for investment, and not with a view to the distribution or resale thereof. The
Pledgor acknowledges and agrees that in light of such restrictions and
limitations, the Collateral Agent, in its sole and absolute discretion, (a) may
proceed to make such a sale whether or not a registration statement for the
purpose of registering such Pledged Stock or part thereof shall have been filed
under the Federal Securities Laws and (b) may approach and negotiate with a
single potential purchaser to effect such sale. The Pledgor acknowledges and
agrees that any such sale might result in prices and other terms less favorable
to the seller than if such sale were a public sale without such restrictions. In
the event of any such sale, the Collateral Agent shall incur no responsibility
or liability for selling all or any part of the Pledged Stock at a price that
the Collateral Agent, in its sole and absolute discretion, may in good xxxxx
xxxx reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid or if more than a single purchaser were
approached. The provisions of this Section 11 will apply notwithstanding the
existence of a public or private market upon which the quotations or sales
prices may exceed substantially the price at which the Collateral Agent sells.
SECTION 12. Registration, etc. The Pledgor agrees that, upon the
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occurrence and during the continuance of an Event of Default hereunder, if for
any reason the Collateral Agent desires to sell any of the Pledged Stock at a
public sale, it will, at any time and from time to time, upon the written
request of the Collateral Agent, use its best efforts to take or to cause the
issuer of such Pledged Stock to take such action and prepare, distribute and/or
file such documents, as are required or advisable in the reasonable opinion of
counsel for the Collateral Agent to permit the public sale of such Pledged
Stock. The Pledgor further agrees to indemnify, defend and hold harmless the
Collateral Agent, each other Secured Party, any underwriter and their respective
officers, directors, affiliates and controlling persons from and against all
loss, liability, expenses, costs of counsel (including, without limitation,
reasonable fees and expenses to the Collateral Agent of legal counsel), and
claims (including the costs of investigation) that they may incur insofar as
such loss, liability, expense or claim arises out of or is based upon any
alleged untrue statement of a material fact contained in any prospectus (or any
amendment or supplement thereto) or in any notification or offering circular, or
arises out of or is based upon any alleged omission to state a material fact
required to be stated therein or necessary to make the statements in any thereof
not misleading, except insofar as the same may have been caused by any untrue
statement or omission based upon information furnished in writing to the Pledgor
or the issuer of such Pledged Stock by the Collateral Agent or any other Secured
Party expressly for use therein. The Pledgor further agrees, upon such written
request referred to above, to use its best efforts to
11
qualify, file or register, or cause the issuer of such Pledged Stock to qualify,
file or register, any of the Pledged Stock under the Blue Sky or other
securities laws of such states as may be requested by the Collateral Agent and
keep effective, or cause to be kept effective, all such qualifications, filings
or registrations. The Pledgor will bear all costs and expenses of carrying out
its obligations under this Section 12. The Pledgor acknowledges that there is no
adequate remedy at law for failure by it to comply with the provisions of this
Section 12 and that such failure would not be adequately compensable in damages,
and therefore agrees that its agreements contained in this Section 12 may be
specifically enforced.
SECTION 13. Security Interest Absolute. All rights of the Collateral
---------------------------
Agent hereunder, the grant of a security interest in the Collateral and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of (a) any lack of validity or enforceability of the Credit
Agreement, any other Loan Document, any agreement with respect to any of the
Obligations or any other agreement or instrument relating to any of the
foregoing, (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement, any other Loan
Document or any other agreement or instrument relating to any of the foregoing,
(c) any exchange, release or nonperfection of any other collateral, or any
release or amendment or waiver of or consent to or departure from any guaranty,
for all or any of the Obligations or (d) any other circumstance that might
otherwise constitute a defense available to, or a discharge of, the Pledgor in
respect of the Obligations or in respect of this Agreement (other than the
indefeasible payment in full of all the Obligations).
SECTION 14. Termination or Release. (a) This Agreement and the
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security interests granted hereby shall terminate when all the Obligations have
been indefeasibly paid in full and the Lenders have no further commitment to
lend under the Credit Agreement.
(b) Upon any sale or other transfer by the Pledgor of any Collateral
that is permitted under the Credit Agreement, or upon the effectiveness of any
written consent to the release of the security interest granted hereby in any
Collateral pursuant to Section 9.08(b) of the Credit Agreement, the security
interest in such Collateral shall be automatically released.
(c) In connection with any termination or release pursuant to
paragraph (a) or (b), the Collateral Agent shall execute and deliver to the
Pledgor, at the Pledgor's expense, all documents that the Pledgor shall
reasonably request to evidence such termination or release. Any execution and
delivery of documents pursuant to this Section 14 shall be without recourse to
or warranty by the Collateral Agent.
SECTION 15. Notices. All communications and notices hereunder shall
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be in writing and given as provided in Section 9.01 of the Credit Agreement.
12
SECTION 16. Further Assurances. The Pledgor agrees to do such
-------------------
further acts and things, and to execute and deliver such additional conveyances,
assignments, agreements and instruments, as the Collateral Agent may at any time
reasonably request in connection with the administration and enforcement of this
Agreement or with respect to the Collateral or any part thereof or in order
better to assure and confirm unto the Collateral Agent its rights and remedies
hereunder.
SECTION 17. Binding Effect; Several Agreement; Assignments. Whenever
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in this Agreement any of the parties hereto is referred to, such reference shall
be deemed to include the successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of the Pledgor that are
contained in this Agreement shall bind and inure to the benefit of its
successors and assigns. This Agreement shall become effective when a
counterpart hereof executed on behalf of the Pledgor shall have been delivered
to the Collateral Agent and a counterpart hereof shall have been executed on
behalf of the Collateral Agent, and thereafter shall be binding upon the Pledgor
and the Collateral Agent and their respective successors and assigns, and shall
inure to the benefit of the Pledgor, the Collateral Agent and the other Secured
Parties, and their respective successors and assigns, except that the Pledgor
shall not have the right to assign its rights hereunder or any interest herein
or in the Collateral (and any such attempted assignment shall be void), except
as expressly contemplated by this Agreement or the other Loan Documents.
SECTION 18. Survival of Agreement; Severability. (a) All covenants,
------------------------------------
agreements, representations and warranties made by the Pledgor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Collateral Agent and the other Secured Parties and
shall survive the making by the Lenders of the Loans, regardless of any
investigation made by the Secured Parties or on their behalf, and shall continue
in full force and effect as long as the principal of or any accrued interest on
any Loan or any other fee or amount payable under this Agreement or any other
Loan Document is outstanding and unpaid and as long as the Commitments have not
been terminated.
(b) In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
13
SECTION 19. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
--------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 20. Counterparts. This Agreement may be executed in two or
-------------
more counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute a single contract, and shall become
effective as provided in Section 17. Delivery of an executed counterpart of a
signature page to this Agreement by facsimile transmission shall be as effective
as delivery of a manually executed counterpart of this Agreement.
SECTION 21. Rules of Interpretation. The rules of interpretation
------------------------
specified in Section 1.02 of the Credit Agreement shall be applicable to this
Agreement. Section headings used herein are for convenience of reference only,
are not part of this Agreement and are not to affect the construction of, or to
be taken into consideration in interpreting this Agreement.
SECTION 22. Jurisdiction; Consent to Service of Process. (a) The
--------------------------------------------
Pledgor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that, to the extent permitted by applicable law, all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Collateral Agent or
any other Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against the Pledgor or
its properties in the courts of any jurisdiction.
(b) The Pledgor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 15. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
14
SECTION 23. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
---------------------
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
15
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
THE GUARANTEE LIFE COMPANIES INC.,
by
-------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as Collateral Agent,
by
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Name:
Title:
