EXHIBIT 4
$70,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
AMERICAN MEDICAL SECURITY GROUP, INC.
and
UNITED WISCONSIN LIFE INSURANCE COMPANY,
as Borrowers,
THE LENDERS NAMED HEREIN
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent and Swing Line Lender
DATED AS OF
October 15, 1998
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS ..................................................................1
ARTICLE II
THE CREDITS.................................................................. 17
2.1. Commitment................................................. 17
2.2. Required Payments; Termination............................. 17
2.3. Ratable Loans.............................................. 17
2.4. Types of Advances.......................................... 17
2.5. Facility Fee; Reductions in Aggregate Commitment........... 17
2.6. Minimum Amount of Each Advance............................. 18
2.7. Optional Principal Payments................................ 18
2.8. Mandatory Commitment Reductions............................ 18
2.9. Method of Selecting Types and Interest Periods for New
Advances................................................... 19
2.10. Conversion and Continuation of Outstanding Advances........ 19
2.11. The Swing Line Loans....................................... 20
2.12. Procedure for Swing Line Loans............................. 20
2.13. Changes in Interest Rate, etc.............................. 22
2.14. Rates Applicable After Default............................. 22
2.15. Method of Payment.......................................... 23
2.16. Noteless Agreement; Evidence of Indebtedness............... 23
2.17. Telephonic Notices......................................... 24
2.18. Interest Payment Dates; Interest and Fee Basis............. 24
2.19. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions...................................... 24
2.20. Lending Installations...................................... 24
2.21. Non-Receipt of Funds by the Agent.......................... 25
ARTICLE III
YIELD PROTECTION; TAXES...................................................... 25
3.1. Yield Protection........................................... 25
3.2. Changes in Capital Adequacy Regulations.................... 26
3.3. Availability of Types of Advances.......................... 26
3.4. Funding Indemnification.................................... 27
3.5. Taxes...................................................... 27
3.6. Lender Statements; Survival of Indemnity................... 28
3.7. Substitution of Lender..................................... 29
ARTICLE IV
CONDITIONS PRECEDENT......................................................... 29
4.1. Initial Advance............................................ 29
4.2. Each Advance and Swing Line Loan........................... 31
ARTICLE V
REPRESENTATIONS AND WARRANTIES............................................... 32
5.1. Existence and Standing..................................... 32
5.2. Authorization and Validity................................. 32
5.3. No Conflict; Government Consent............................ 32
5.4. Financial Statements....................................... 33
5.5. Material Adverse Change.................................... 33
5.6. Taxes...................................................... 33
5.7. Litigation and Contingent Obligations...................... 34
5.8. Subsidiaries............................................... 34
5.9. ERISA...................................................... 34
5.10. Accuracy of Information.................................... 34
5.11. Federal Reserve Regulations................................ 34
5.12. Material Agreements........................................ 35
5.13. Compliance With Laws....................................... 35
5.14. Ownership of Properties.................................... 35
5.15. Plan Assets; Prohibited Transactions....................... 35
5.16. Environmental Matters...................................... 35
5.17. Investment Company Act..................................... 36
5.18. Public Utility Holding Company Act......................... 36
5.19. Insurance.................................................. 36
5.20. Solvency................................................... 36
5.21. Year 2000.................................................. 36
5.22. Insurance Licenses......................................... 36
5.23. Reinsurance................................................ 37
5.24. Reserves................................................... 37
5.25. UWLIC Capital and Surplus.................................. 37
5.26. Defaults................................................... 37
5.27. Certain Fees............................................... 37
5.28. Indebtedness............................................... 38
5.29. Employee Controversies..................................... 38
5.30. Dividends.................................................. 38
ARTICLE VI
COVENANTS.................................................................... 38
6.1. Financial Reporting........................................ 38
6.2. Use of Proceeds............................................ 41
6.3. Notice of Default.......................................... 41
6.4. Conduct of Business........................................ 42
6.5. Taxes...................................................... 42
6.6. Insurance.................................................. 42
6.7. Compliance with Laws....................................... 42
6.8. Maintenance of Properties.................................. 43
6.9. Inspection................................................. 43
6.10. Dividends.................................................. 43
6.11. Indebtedness............................................... 43
6.12. Merger..................................................... 44
6.13. Sale of Assets............................................. 45
6.14. Investments and Acquisitions............................... 45
6.15. Liens...................................................... 47
6.16. Affiliates................................................. 48
6.17. Other Indebtedness......................................... 48
6.18. Contingent Obligations..................................... 49
6.19. Financial Covenants........................................ 49
6.19.1. Interest Coverage Ratio............................49
6.19.2. Leverage Ratio.....................................49
6.19.3. Tangible Net Worth................................ 49
6.19.4. Risk-Based Capital................................ 49
6.20. Year 2000.................................................. 50
6.21. Reinsurance................................................ 50
6.22. Tax Consolidation.......................................... 50
6.23. ERISA Compliance........................................... 50
6.24. Environmental Matters...................................... 51
6.25. Change in Corporate Structure; Fiscal Year................. 51
6.26. Inconsistent Agreements.................................... 51
6.27. Capital Expenditures....................................... 52
ARTICLE VII
DEFAULTS..................................................................... 52
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES............................... 55
8.1. Acceleration............................................... 55
8.2. Amendments................................................. 55
8.3. Preservation of Rights..................................... 56
ARTICLE IX
GENERAL PROVISIONS........................................................... 56
9.1. Survival of Representations................................ 56
9.2. Governmental Regulation.................................... 56
9.3. Headings................................................... 56
9.4. Entire Agreement........................................... 57
9.5. Several Obligations; Benefits of this Agreement............ 57
9.6. Expenses; Indemnification.................................. 57
9.7. Numbers of Documents....................................... 58
9.8. Accounting................................................. 58
9.9. Severability of Provisions................................. 58
9.10. Nonliability of Lenders.................................... 58
9.11. Confidentiality............................................ 58
9.12. Nonreliance................................................ 59
9.13. Disclosure................................................. 59
ARTICLE X
THE AGENT.................................................................... 59
10.1. Appointment; Nature of Relationship........................ 59
10.2. Powers..................................................... 60
10.3. General Immunity........................................... 60
10.4. No Responsibility for Loans, Recitals, etc................. 60
10.5. Action on Instructions of Lenders.......................... 60
10.6. Employment of Agents and Counsel........................... 60
10.7. Reliance on Documents; Counsel............................. 61
10.8. Agent's Reimbursement and Indemnification.................. 61
10.9. Notice of Default.......................................... 61
10.10. Rights as a Lender......................................... 61
10.11. Lender Credit Decision..................................... 62
10.12. Successor Agent............................................ 62
10.13. Agent's Fee................................................ 63
10.14. Delegation to Affiliates................................... 63
ARTICLE XI
SETOFF; RATABLE PAYMENTS......................................................63
11.1. Setoff..................................................... 63
11.2. Ratable Payments........................................... 63
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS............................ 64
12.1. Successors and Assigns..................................... 64
12.2. Participations............................................. 64
12.2.1. Permitted Participants; Effect.................... 64
12.2.2. Voting Rights..................................... 65
12.2.3. Benefit of Setoff................................. 65
12.3. Assignments................................................ 65
12.3.1. Permitted Assignments............................. 65
12.3.2. Effect; Effective Date............................ 65
12.4. Dissemination of Information............................... 66
12.5. Tax Treatment.............................................. 66
ARTICLE XIII
NOTICES...................................................................... 67
13.1. Notices.................................................... 67
13.2. Change of Address.......................................... 67
ARTICLE XIV
COUNTERPARTS................................................................. 67
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL................. 68
15.1. CHOICE OF LAW.............................................. 68
15.2. CONSENT TO JURISDICTION.................................... 68
15.3. WAIVER OF JURY TRIAL....................................... 68
ARTICLE XVI
GUARANTY OF GROUP............................................................ 69
EXHIBITS
Exhibit A .........-........Compliance Certificate
Exhibit B .........-........Assignment Agreement
Exhibit C .........-........Revolving Note
Exhibit D .........-........Swing Line Note
SCHEDULES
Schedule 5.3 .........-........Consents
Schedule 5.8 .........-........Subsidiaries
Schedule 5.22 .........-........Insurance Licenses
Schedule 5.23 .........-........Reinsurance
Schedule 5.24 .........-........Reserves
Schedule 5.28 .........-........Indebtedness
Schedule 6.15 .........-........Liens
Schedule 6.18 .........-........Contingent Obligations
AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement, dated as of October 15, 1998,
is among American Medical Security Group, Inc., a Wisconsin corporation, United
Wisconsin Life Insurance Company, a Wisconsin insurance company, the Lenders and
The First National Bank of Chicago, as Agent and as Swing Line Lender.
R E C I T A L S:
A. On July 31, 1998, Holdings and UWLIC entered into a Credit Agreement
with the Agent and the lenders (as amended through the date hereof, the "Prior
Credit Agreement"), pursuant to which the Lenders agreed to make revolving loans
to Holdings and the Swing Line Lender agreed to make Swing Line Loans to UWLIC
and Holdings.
B. At Holdings' request, Holdings' rights and obligations under the Prior
Credit Agreement were assigned to and assumed by Group pursuant to that certain
Assignment and Assumption and Amendment Agreement dated as of September 24, 1998
among Holdings, Group, UWLIC, the Agent and the Lenders.
C. Group, UWLIC, the Agent and the Lenders wish to amend and restate the
Prior Credit Agreement in its entirety as set forth below.
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which Group or any of its
Subsidiaries (a) acquires any going business or all or substantially all of the
assets of any firm, corporation or limited liability company, or division
thereof, whether through purchase of assets, merger or otherwise or (b) directly
or indirectly acquires (in one transaction or as the most recent transaction in
a series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power) of the
outstanding ownership interests of a partnership or limited liability company.
"Advance" means a borrowing hereunder (or conversion or continuation
thereof) consisting of the aggregate amount of the several Revolving Loans made
on the same Borrowing Date (or date of conversion or continuation) by the
Lenders to Group of the same Type and, in the case of Eurodollar Advances, for
the same Interest Period. The making of a Swing Line Loan shall not constitute
an Advance.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Affected Lender" is defined in SECTION 3.7.
"Agent" means The First National Bank of Chicago in its capacity as
contractual representative of the Lenders pursuant to ARTICLE X, and not in its
individual capacity as a Lender, and any successor Agent appointed pursuant to
ARTICLE X.
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders, as reduced from time to time pursuant to the terms hereof.
"Agreement" means this credit agreement, as it may be amended or modified
and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
those used in preparing the financial statements referred to in SECTION 5.4(A)
and (B).
"Annual Statement" means the annual statutory financial statement of any
Insurance Subsidiary required to be filed with the insurance commissioner (or
similar authority) of its jurisdiction of incorporation, which statement shall
be in the form required by such Insurance Subsidiary's jurisdiction of
incorporation or, if no specific form is so required, in the form of financial
statements permitted by such insurance commissioner (or such similar authority)
to be used for filing annual statutory financial statements and shall contain
the type of information permitted by such insurance commissioner (or such
similar authority) to be disclosed therein, together with all exhibits or
schedules filed therewith
"Applicable Fee Rate" means, at any time, the percentage rate per annum at
which facility fees are accruing on the Aggregate Commitment (without regard to
usage) at such time as set forth in the Pricing Schedule.
"Applicable Margin" means, with respect to Eurodollar Advances at any time,
the percentage rate per annum which is applicable at such time with respect to
Eurodollar Advances as set forth in the Pricing Schedule.
"Arranger" means First Chicago Capital Markets, Inc., a Delaware
corporation, and its successors.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of the President, any Executive Vice
President or the chief financial officer of the applicable Borrower, acting
singly.
"Borrowers" means, collectively, Group and UWLIC, and their successors and
assigns and "Borrower" means either Group or UWLIC.
"Borrowing Date" means a date on which an Advance or a Swing Line Loan is
made hereunder.
"Borrowing Notice" is defined in SECTION 2.9.
"Business Day" means (a) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States dollars are carried on in the London interbank market and (b)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Chicago for the conduct of substantially all of their
commercial lending activities.
"Capital Expenditures" means, without duplication, any expenditures for any
purchase or other acquisition for value of any asset that is classified on a
consolidated balance sheet of Holdings and its Subsidiaries prepared in
accordance with Agreement Accounting Principles as a fixed or capital asset
excluding (a) the cost of assets acquired under Capitalized Lease Obligations,
(b) expenditures of insurance proceeds to rebuild or replace any asset after a
casualty loss, and (c) leasehold improvement expenditures for which Group or a
Subsidiary is reimbursed promptly by the lessor.
"Capitalized Lease" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalent Investments" means (a) short-term obligations of, or fully
guaranteed by, the United States of America, (b) commercial paper rated A-1 or
better by S&P or P-1 or better by Xxxxx'x, (c) demand deposit accounts
maintained in the ordinary course of business, and (d) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000; PROVIDED, in each case
that the same provides for payment of both principal and interest (and not
principal alone or interest alone) and is not subject to any contingency
regarding the payment of principal or interest.
"Change in Control" means (a) Blue Cross and Blue Shield United of
Wisconsin shall cease to own beneficially and of record shares representing at
least 10% of the voting power of the issued and outstanding shares of capital
stock of Group, free and clear of all Liens and other encumbrances, (b) the
acquisition by any Person, or two or more Persons acting in concert, of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934) or voting
control, directly or indirectly, of 25% or more of the outstanding shares of
voting stock of Group; (c) Group shall cease to own, free and clear of all Liens
or other encumbrances, 100% of the outstanding shares of voting stock of
Holdings on a fully diluted basis (other than pursuant to a merger of Holdings
with and into Group in accordance with SECTION 6.12; (d) Holdings shall cease to
own, free and clear of all Liens or other encumbrances, 100% of the outstanding
shares of voting stock of UWLIC on a fully diluted basis; or (e) during any
period of 25 consecutive calendar months, commencing on the date of this
Agreement, the ceasing of those individuals (the "Continuing Directors") who (i)
were directors of Group on the first day of each such period or (ii)
subsequently became directors of Group and whose initial election or initial
nomination for election subsequent to that date was approved by a majority of
the Continuing Directors then on the board of directors of Group to constitute a
majority of the board of directors of Group.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to make
Loans not exceeding the amount set forth opposite its signature below or as set
forth in any Notice of Assignment relating to any assignment that has become
effective pursuant to SECTION 12.3.2, as such amount may be modified from time
to time pursuant to the terms hereof.
"Consolidated Indebtedness" means at any time the Indebtedness of Group and
its Subsidiaries calculated on a consolidated basis as of such time.
"Consolidated Interest Expense" means, with reference to any period, the
interest expense of Group and its Subsidiaries calculated on a consolidated
basis for such period.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of Group and its Subsidiaries calculated on a consolidated
basis for such period.
"Consolidated Net Worth" means at any time the consolidated stockholders'
equity of Group and its Subsidiaries calculated on a consolidated basis as of
such time, determined without giving effect to Statement of Financial Accounting
Standards No. 115.
"Consolidated Person" means, for the taxable year of reference, each Person
which is a member of the affiliated group of Group if consolidated returns are
or shall be filed for such affiliated group for federal income tax purposes or
any combined or unitary group of which Group, Holdings or UWLIC is a member for
state income tax purposes.
"Consolidated Tangible Net Worth" means at any time (a) Consolidated Net
Worth, less (b) the amount (to the extent reflected in determining Consolidated
Net Worth) of all write ups, unamortized debt discount and expense, unamortized
deferred charges, goodwill, patents, trademarks, service marks, trade names,
copyrights, organization or developmental expenses and other intangible items.
"Consolidated Total Capitalization" means at any time the sum of
Consolidated Indebtedness and Consolidated Net Worth, each calculated at such
time.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, but excluding Contingent Obligations in respect of insurance
policies issued in the ordinary course of business.
"Conversion/Continuation Notice" is defined in SECTION 2.10.
"Controlled Group" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with Group or any of its
Subsidiaries, are treated as a single employer under Section 414 of the Code.
"Corporate Base Rate" means a rate per annum equal to the corporate base
rate of interest announced by First Chicago from time to time, changing when and
as said corporate base rate changes.
"Default" means an event described in ARTICLE VII.
"Distribution" means the consummation of the transactions described in the
section of the Information Statement entitled "The Distribution", substantially
in the form included in the Form 10 Registration Statement filed by Newco/UWS,
Inc. with the Securities and Exchange Commission on May 29, 1998, as amended on
August 13, 1998 and September 9, 1998.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to (a) the
protection of the environment, (b) the effect of the environment on human
health, (c) emissions, discharges or releases of pollutants, contaminants,
hazardous substances or wastes into surface water, ground water or land, or (d)
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which bears interest at the
applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the rate determined by the Agent to be the rate at
which First Chicago offers to place deposits in U.S. dollars with first-class
banks in the London interbank market at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, in the
approximate amount of First Chicago's relevant Eurodollar Loan and having a
maturity approximately equal to such Interest Period.
"Eurodollar Loan" means a Loan which bears interest at the applicable
Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (a) the quotient of (i) the Eurodollar Base
Rate applicable to such Interest Period, divided by (ii) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(b) the Applicable Margin. The Eurodollar Rate shall be rounded to the next
higher multiple of 1/16 of 1% if the rate is not such a multiple.
"Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (a) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (b) the jurisdiction in
which the Agent's or such Lender's principal executive office or such Lender's
applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another document
is specifically referenced.
"Existing Reinsurance Agreements" is defined in SECTION 5.23.
"Facility Termination Date" means July 31, 2003.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Financial Contract" of a Person means (a) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (b) any agreements, devices or
arrangements providing for payments related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to, interest rate
exchange agreements, forward currency exchange agreements, interest rate cap or
collar protection agreements, forward rate currency or interest rate options.
"First Chicago" means The First National Bank of Chicago in its individual
capacity, and its successors.
"Fiscal Quarter" means one of the four three-month accounting periods
comprising a Fiscal Year.
"Fiscal Year" means the twelve-month accounting period ending December 31
of each year.
"Floating Rate" means, for any day, a rate of interest per annum equal to
the higher of (a) the Corporate Base Rate for such day and (b) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate, including without limitation each Swing Line Loan.
"Governmental Authority" means any government (foreign or domestic) or any
state or other political subdivision thereof or any governmental body, agency,
authority, department or commission (including without limitation any board of
insurance, insurance department or insurance commission and any taxing authority
or political subdivision) or any instrumentality or officer thereof (including
without limitation any court or tribunal) exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
and any corporation, partnership or other entity directly or indirectly owned or
controlled by or subject to the control of any of the foregoing.
"Group" means American Medical Security Group, Inc., a Wisconsin
corporation (formerly known as United Wisconsin Services, Inc.)
"Guaranteed Obligations" is defined in SECTION 16.1.
"Guaranty" means that certain Guaranty dated as of the date hereof by
Holdings in favor of the Agent and the Lenders, as amended, supplemented or
modified from time to time.
"Holdings" means American Medical Security Holdings, Inc., a Wisconsin
corporation.
"Indebtedness" of a Person means such Person's (a) obligations for borrowed
money, (b) obligations representing the deferred purchase price of Property or
services (other than accounts payable arising in the ordinary course of such
Person's business payable on terms customary in the trade), (c) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from Property now or hereafter owned or acquired by such Person, (d)
obligations which are evidenced by notes, acceptances, or other instruments, (e)
obligations of such Person to purchase securities or other property arising out
of or in connection with the sale of the same or substantially similar
securities or property, (f) Capitalized Lease Obligations, (g) Contingent
Obligations, (h) obligations for which such Person is obligated pursuant to or
in respect of a Letter of Credit, (i) Off-Balance Sheet Liabilities, (j)
obligations for which such person is obligated pursuant to or in respect of a
Sale and Leaseback Transaction, (k) Net Xxxx-to-Market Exposure of Rate Hedging
Agreements and other Financial Contracts, and (l) other obligations for borrowed
money or other financial accommodations which, in accordance with Agreement
Accounting Principles or SAP, as applicable, would be shown as a liability on
the consolidated balance sheet of such Person.
"Information Statement" means that certain Information Statement
distributed to the shareholders of Group in connection with the Distribution.
"Initial Closing Date" means July 31, 1998.
"Insurance Subsidiary" means any Subsidiary which is engaged in the
insurance business.
"Interest Coverage Ratio" means, as of any date of determination, the ratio
of (a) the lesser of (i) 10% of UWLIC's Statutory Surplus as of such date and
(ii) UWLIC's aggregate Statutory Net Income for the period of four Fiscal
Quarters ending on such date, without regard to realized capital gains in such
period (determined on a pre-tax basis) and determined without double counting,
to (b) Consolidated Interest Expense for the period of four Fiscal Quarters
ending on such date; PROVIDED, that for determinations made through June 30,
1999, the amount determined pursuant to clause (b) above shall be equal to the
Consolidated Interest Expense for the period beginning on August 1, 1998 and
ending on the date of determination, divided by the number of months in such
period and multiplied by 12.
"Interest Period" means, with respect to a Eurodollar Advance, a period of
one, two, three or six months commencing on a Business Day selected by Group
pursuant to this Agreement. Such Interest Period shall end on the day which
corresponds numerically to such date one, two, three or six months thereafter;
PROVIDED, that if there is no such numerically corresponding day in such next,
second, third or sixth succeeding month, such Interest Period shall end on the
last Business Day of such next, second, third or sixth succeeding month;
PROVIDED, further, that during the period specified in the proviso in SECTION
2.9, each Interest Period shall be limited to a period of seven days. If an
Interest Period would otherwise end on a day which is not a Business Day, such
Interest Period shall end on the next succeeding Business Day; PROVIDED, that if
said next succeeding Business Day falls in a new calendar month, such Interest
Period shall end on the immediately preceding Business Day.
"Investment" of a Person means (a) any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; (b) any stocks, bonds, mutual
funds, partnership interests, notes, debentures or other securities owned by
such Person; (c) any deposit accounts and certificates of deposit owned by such
Person; and (d) any structured notes, derivative financial instruments and other
similar instruments or contracts owned by such Person.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement (including the Swing Line Lender) and their respective successors
and assigns.
"Lending Installation" means, with respect to a Lender or the Agent, the
office, branch, subsidiary or affiliate of such Lender or the Agent listed on
the signature pages hereof or on a Schedule or otherwise selected by such Lender
or the Agent pursuant to SECTION 2.20.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Leverage Ratio" means, as of any date of calculation, the ratio of (a)
Consolidated Indebtedness outstanding on such date to (b) the sum of (i)
Consolidated Indebtedness outstanding on such date and (ii) Consolidated Net
Worth outstanding on such date.
"License" means any license, certificate of authority, permit or other
authorization which is required to be obtained from any Governmental Authority
in connection with the operation, ownership or transaction of insurance
business.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's loan made pursuant to
ARTICLE II (or any conversion or continuation thereof) in the form of a
Revolving Loan or a Swing Line Loan.
"Loan Documents" means this Agreement, any Notes issued pursuant to SECTION
2.11 or 2.16, the Guaranty and the other documents and agreements contemplated
hereby and executed by either Borrower or Holdings in favor of the Agent or any
Lender.
"Material Adverse Effect" means a material adverse effect on (a) the
business, Property, condition (financial or otherwise), operations, performance
or prospects of Group and its Subsidiaries taken as a whole, (b) the ability of
either Borrower or Holdings to perform its obligations under the Loan Documents
to which it is a party, or (c) the validity or enforceability of any of the Loan
Documents or the rights or remedies of the Agent or the Lenders thereunder.
"Material Indebtedness" is defined in SECTION 7.5.
"Material Insurance Subsidiary" means an Insurance Subsidiary with a
Statutory Capital and Surplus of greater than $5,000,000.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which either Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"NAIC" means the National Association of Insurance Commissioners or any
successor thereto, or in lieu thereof, any other association, agency or other
organization performing advisory, coordination or other like functions among
insurance departments, insurance commissioners and similar Governmental
Authorities of the various states of the United States toward the promotion of
uniformity in the practices of such Governmental Authorities.
"Net Available Proceeds" means with respect to any sale or issuance of any
equity securities of Group or any of Group's Subsidiaries, cash or readily
marketable cash equivalents received therefrom, whether at the time of such
disposition or subsequent thereto, net, in either case, of all legal, title and
recording tax expenses, all other taxes (including income taxes), commissions
and other fees and all costs and expenses incurred.
"Net Xxxx-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Hedging Agreements and other Financial
Contracts. "Unrealized losses" means the fair market value of the cost to such
Person of replacing such Rate Hedging Agreement or Financial Contract as of the
date of determination (assuming the Rate Hedging Agreement or Financial Contract
were to be terminated as of that date), and "unrealized profits" means the fair
market value of the gain to such Person of replacing such Rate Hedging Agreement
or Financial Contract as of the date of determination (assuming such Rate
Hedging Agreement or Financial Contract were to be terminated as of that date).
"Non-U.S. Lender" is defined in SECTION 3.5(D).
"Notes" means, collectively any Revolving Notes and Swing Line Notes then
issued at the request of the applicable Lender.
"Notice of Assignment" is defined in SECTION 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Loans, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Borrowers to the Lenders or to any
Lender, the Agent or any indemnified party arising under the Loan Documents and
any Rate Hedging Obligations or foreign exchange contracts of the Borrowers
owing to the Agent or any Lender.
"Off-Balance Sheet Liability" of a Person means (a) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (b) any liability under any Sale and Leaseback
Transaction which does not create a liability on the balance sheet of such
Person, (c) any liability under any financing lease or so-called "synthetic
lease" transaction entered into by such Person, or (d) any obligation arising
with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
balance sheet of such Person, but excluding Operating Leases.
"Other Taxes" is defined in SECTION 3.5(B).
"Participants" is defined in SECTION 12.2.1.
"Payment Date" means the last day of each March, June, September and
December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which either Borrower or any member of the Controlled Group may have
any liability.
"Pricing Schedule" means the Schedule attached hereto identified as such.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Pro Rata Share" means, as to any Lender, (a) at any time at which the
Aggregate Commitment remains outstanding, the percentage equivalent (expressed
as a decimal rounded to the ninth decimal place) at such time of such Lender's
Commitment divided by the Aggregate Commitment, and (b) after the termination of
the Aggregate Commitment, the percentage equivalent (expressed as a decimal,
rounded to the ninth decimal place) at such time of the principal amount of such
Lender's outstanding Loans (other than Swing Line Loans) divided by the
aggregate principal amount of the outstanding Loans (other than Swing Line
Loans) of all of the Lenders.
"Purchasers" is defined in SECTION 12.3.1.
"Quarterly Statement" means the quarterly statutory financial statement of
any Insurance Subsidiary required to be filed with the insurance commissioner
(or similar authority) of its jurisdiction of incorporation or, if no specific
form is so required, in the form of financial statements permitted by such
insurance commissioner (or such similar authority) to be used for filing
quarterly statutory financial statements and shall contain the type of financial
information permitted by such insurance commissioner (or such similar authority)
to be disclosed therein, together with all exhibits or schedules filed
therewith.
"Rate Hedging Agreement" means an agreement, device or arrangement
providing for payments which are related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants.
"Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all Rate
Hedging Agreements, and (b) any and all cancellations, buy backs, reversals,
terminations or assignments of any Rate Hedging Agreement.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation T" means Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and shall include any successor or
other regulation or official interpretation of such Board of Governors relating
to the extension of credit by securities brokers and dealers for the purpose of
purchasing or carrying margin stocks applicable to such Persons.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and shall include any successor or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by the specified lenders for the purpose of
purchasing or carrying margin stocks applicable to such Persons.
"Replacement Lender" is defined in SECTION 3.7.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event; PROVIDED, that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.
"Reports" is defined in SECTION 9.6.
"Required Lenders" means Lenders in the aggregate having at least 66-2/3%
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 66-2/3% of the aggregate unpaid
principal amount of the outstanding Revolving Loans and Swing Line Loans (less
the amount of any Swing Line Loans as to which participating interests have been
purchased by the Lenders pursuant to SECTION 2.12(D)).
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Revolving Note" means any promissory note issued at the request of a
Lender pursuant to SECTION 2.16 in the form of EXHIBIT C.
"Revolving Loan" is defined in SECTION 2.1.
"Risk Based Capital Act" means the Risk-Based Capital (RBC) for Life and/or
Health Insurers Model Act as in effect as the date of this Agreement.
"S&P" means Standard and Poor's Ratings Service, a division of The McGraw
Hill Companies, Inc.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"SAP" means, with respect to any Insurance Subsidiary, the statutory
accounting practices prescribed or permitted by the insurance commissioner (or
other similar authority) in the jurisdiction of such Person for the preparation
of annual statements and other financial reports by insurance companies of the
same type as such Person in effect from time to time, applied in a manner
consistent with those used in preparing the financial statements referred to in
SECTION 5.4(C) and (D).
"Schedule" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a Plan maintained by either Borrower or any
member of the Controlled Group for employees of such Borrower or any member of
the Controlled Group.
"Statutory Capital and Surplus" means, with respect to any Insurance
Subsidiary at any time, the capital and surplus of such Insurance Subsidiary at
such time, as determined in accordance with SAP ("Liabilities, Surplus and Other
Funds" statement, Page 3, Column 1, Line 38 of the Annual Statement).
"Statutory Net Income" means, with respect to any Insurance Subsidiary for
any computation period, the net income earned by such Insurance Subsidiary
during such period, as determined in accordance with SAP ("Summary of
Operations" statement, Page 4, Column 1, Line 33 of the Annual Statement).
"Statutory Surplus" means, with respect to any Insurance Subsidiary at any
time, the surplus as regards policyholders of such Insurance Subsidiary at such
time, as determined in accordance with SAP ("Liabilities, Surplus and Other
Funds" statement, Page 3, Column 1, Line 37 of the Annual Statement).
"Subsidiary" of a Person means (a) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(b) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of Group.
"Substantial Portion" means, with respect to the Property of any Person,
Property which (a) represents more than 10% of the consolidated assets of such
Person as would be shown in the consolidated financial statements of such Person
as at the end of the Fiscal Quarter next preceding the date on which such
determination is made, or (b) is responsible for more than 10% of the
consolidated net revenues or of the consolidated net income of such Person as
reflected in the financial statements referred to in clause (a) above.
"Swing Line Commitment" means, at any time, the commitment of the Swing
Line Lenders to make Swing Line Loans pursuant to SECTION 2.11.
"Swing Line Lender" means First Chicago, in its capacity as provider of the
Swing Line Loans.
"Swing Line Loan" means a Loan made by the Swing Line Lender.
"Swing Line Note" means a promissory note in substantially the form of
EXHIBIT D.
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes.
"Transferee" is defined in SECTION 12.4.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or a Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the present value
of all vested and unvested accrued benefits under all Single Employer Plans
exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"UWLIC" means United Wisconsin Life Insurance Company, a Wisconsin life
insurance company.
"UWS" means United Wisconsin Services, Inc., a Wisconsin corporation.
"UWS Group" means, collectively, UWS and its Subsidiaries.
"Wholly-Owned Subsidiary" of a Person means (a) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, 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, or (b) any partnership, limited liability company, association,
joint venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.
"Year 2000 Issues" means anticipated costs, problems and uncertainties
associated with the inability of certain computer applications to effectively
handle data, including dates on and after January 1, 2000, as such inability
affects the business, operations and financial condition of Group and its
Subsidiaries and of Group's and its Subsidiaries' material customers, suppliers
and vendors.
"Year 2000 Program" is defined in SECTION 5.21.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms. References herein to particular columns,
lines or sections of any Person's Annual Statement shall be deemed, where
appropriate, to be references to the corresponding column, line or section of
such Person's Quarterly Statement, or if no such corresponding column, line or
section exists or if any report form changes, then to the corresponding item
referenced thereby. References herein to the Risk Based Capital Act shall be
deemed to be references to such act as in effect on the date of this Agreement;
PROVIDED, that the Agent, the Lenders and the Borrowers agree to make mutually
acceptable modifications to SECTION 6.19.4 hereof following the request by any
thereof upon any modification to such act so as to equitably reflect such
modifications in order that the criteria for evaluating the Insurance
Subsidiaries will be the same after such modifications as if such modifications
had not occurred. Each accounting term used herein which is not otherwise
defined herein shall be defined in accordance with Agreement Accounting
Principles unless otherwise specified.
In the event that any changes in Agreement Accounting Principles and/or SAP
occur after the date of this Agreement and such changes result in a material
variation in the method of calculation of financial covenants or other terms of
this Agreement, then the Borrowers, the Agent and the Lenders agree to amend
such provisions of this Agreement so as to equitably reflect such changes in
order that the criteria for evaluating the Borrowers' financial condition will
be the same after such changes as if such changes had not occurred.
ARTICLE II
THE CREDITS
2.1. COMMITMENT. (a) From and including the date of this Agreement and
prior to the Facility Termination Date, each Lender severally agrees, on the
terms and conditions set forth in this Agreement, to make Loans (each such Loan,
a "REVOLVING LOAN") to Group from time to time in amounts which, together with
such Lender's Pro Rata Share of any outstanding Swing Line Loans, shall not
exceed in the aggregate at any one time outstanding the amount of its
Commitment. UWLIC may not borrow Revolving Loans, but may only borrow Swing Line
Loans pursuant to SECTION 2.11. Subject to the terms of this Agreement, Group
may borrow, repay and reborrow Revolving Loans and Swing Line Loans at any time
prior to the Facility Termination Date. The Commitments to lend hereunder shall
expire on the Facility Termination Date.
(b) Each Borrower hereby agrees that if at any time, as a result in
reductions in the Aggregate Commitment pursuant to SECTION 2.8 or
otherwise, the outstanding principal amount of the Loans exceeds the
Aggregate Commitment, such Borrower shall repay immediately its then
outstanding Loans in such amount as may be necessary to eliminate such
excess.
2.2. REQUIRED PAYMENTS; TERMINATION . Any outstanding Advances and all
other unpaid Obligations shall be paid in full by the Borrowers on the Facility
Termination Date.
2.3. RATABLE LOANS. Each Advance hereunder shall consist of Revolving Loans
made from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment.
2.4. TYPES OF ADVANCES . The Advances may be Floating Rate Advances or
Eurodollar Advances, or a combination thereof, selected by Group in accordance
with SECTIONS 2.9 and 2.10.
2.5. FACILITY FEE; REDUCTIONS IN AGGREGATE COMMITMENT . Group agrees to pay
to the Agent for the account of each Lender a facility fee at a per annum rate
equal to the Applicable Fee Rate times such Lender's Commitment (whether used or
unused) from the date hereof to and including the Facility Termination Date,
payable in arrears on each Payment Date hereafter and on the Facility
Termination Date. Group may permanently reduce the Aggregate Commitment in
whole, or in part ratably among the Lenders, in a minimum amount of $1,000,000
(and in multiples of $500,000 if in excess thereof) upon at least three Business
Days' written notice to the Agent, which notice shall specify the amount of any
such reduction; PROVIDED, that the amount of the Aggregate Commitment may not be
reduced below the aggregate principal amount of the outstanding Advances and the
outstanding Swing Line Loans. All accrued facility fees shall be payable on the
effective date of any termination of the obligations of the Lenders to make
Loans hereunder.
2.6. MINIMUM AMOUNT OF EACH ADVANCE. Each Advance shall be in the minimum
amount of $1,000,000 (and in multiples of $500,000 if in excess thereof);
PROVIDED, that any Floating Rate Advance may be in the amount of the unused
Aggregate Commitment.
2.7. OPTIONAL PRINCIPAL PAYMENTS. Group may from time to time pay, without
penalty or premium, all outstanding Advances or, in a minimum aggregate amount
of $1,000,000 or any integral multiple of $500,000 in excess thereof, any
portion of the outstanding Advances upon two Business Days' prior notice to the
Agent, subject, in the case of Eurodollar Advances, to the payment of any
funding indemnification amounts required by SECTION 3.4 but without penalty or
premium.
2.8. MANDATORY COMMITMENT REDUCTIONS. (a) The Aggregate Commitment shall be
automatically and permanently reduced to the following amounts on the following
dates:
DATE. AGGREGATE COMMITMENT
---- --------------------
July 31, 2000 $60,000,000
July 31, 2001 $50,000,000
uly 31, 2002 $35,000,000
(b) Any reduction in the Aggregate Commitment pursuant to this SECTION
2.8 or otherwise shall ratably reduce the Commitment of each Lender.
(c) At no time shall the Swing Line Commitment exceed the Aggregate
Commitment, and any reduction of the Aggregate Commitment which reduces the
Aggregate Commitment below the then-current amount of the Swing Line
Commitment shall result in an automatic corresponding reduction of the
Swing Line Commitment to the amount of the Aggregate Commitment, as so
reduced, without any action on the part of the Swing Line Lender. At no
time shall the Swing Line Commitment exceed the Commitment of the Swing
Line Lender, and any reduction of the Aggregate Commitment which reduces
the Commitment of the Swing Line Lender below the then-current amount of
the Swing Line Commitment shall result in an automatic corresponding
reduction of the Swing Line Commitment to the amount of the Commitment of
the Swing Line Lender, as so reduced, without any action on the part of the
Swing Line Lender.
2.9. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW ADVANCES. Group
shall select the Type of Advance and, in the case of each Eurodollar Advance,
the Interest Period applicable thereto from time to time. Group shall give the
Agent irrevocable notice (a "BORROWING NOTICE") not later than 10:00 a.m.
(Chicago time) on the Borrowing Date of each Floating Rate Advance and three
Business Days before the Borrowing Date for each Eurodollar Advance, specifying:
(a) the Borrowing Date, which shall be a Business Day, of such
Advance,
(b) the aggregate amount of such Advance,
(c) the Type of Advance selected, and
(d) in the case of each Eurodollar Advance, the Interest Period
applicable thereto, which shall end on or prior to the Facility Termination
Date.
Not later than noon (Chicago time) on each Borrowing Date, each Lender
shall make available its Revolving Loan or Loans in funds immediately available
in Chicago to the Agent at its address specified pursuant to ARTICLE XIII. The
Agent will make the funds so received from the Lenders available to Group at the
Agent's aforesaid address.
2.10. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES. Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into Eurodollar Advances pursuant to this SECTION
2.10 or are repaid in accordance with SECTION 2.7. Each Eurodollar Advance shall
continue as a Eurodollar Advance until the end of the then applicable Interest
Period therefor, at which time such Eurodollar Advance shall be automatically
converted into a Floating Rate Advance unless (x) such Eurodollar Advance is or
was repaid in accordance with SECTION 2.7 or (y) Group shall have given the
Agent a Conversion/Continuation Notice (as defined below) requesting that, at
the end of such Interest Period, such Eurodollar Advance continue as a
Eurodollar Advance for the same or another Interest Period. Subject to the terms
of SECTION 2.6, Group may elect from time to time to convert all or any part of
a Floating Rate Advance into a Eurodollar Advance. Group shall give the Agent
irrevocable notice (a "CONVERSION/CONTINUATION NOTICE") of each conversion of a
Floating Rate Advance into a Eurodollar Advance or continuation of a Eurodollar
Advance not later than 10:00 a.m. (Chicago time) at least three Business Days
prior to the date of the requested conversion or continuation, specifying:
(a) the requested date of such conversion or continuation, which shall
be a Business Day,
(b) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(c) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the Interest Period
applicable thereto.
2.11. THE SWING LINE LOANS. Subject to the terms and conditions hereof, the
Swing Line Lender agrees to make Swing Line Loans to either Group or UWLIC from
time to time prior to the Facility Termination Date in an aggregate principal
amount at any one time outstanding not to exceed $10,000,000 (the "SWING LINE
COMMITMENT"); PROVIDED, that after giving effect to any such Swing Line Loan,
the principal amount outstanding of all Revolving Loans and Swing Line Loans at
such time would not exceed the Aggregate Commitment at such time; PROVIDED,
further, that the principal amount outstanding of the Swing Line Loans and of
the Swing Line Lender's Revolving Loans would not exceed the Swing Line Lender's
Commitment. Prior to the Facility Termination Date, the Borrowers may use the
Swing Line Commitment by borrowing, prepaying the Swing Line Loans in whole or
in part, and reborrowing, all in accordance with the terms and conditions
hereof. All Swing Line Loans shall bear interest at the Floating Rate and shall
not be entitled to be converted into Loans that bear interest at any other rate.
At the Swing Line Lender's request, the Swing Line Loans shall be evidenced by a
Swing Line Note made payable thereto.
2.12. PROCEDURE FOR SWING LINE LOANS . (a) Either Borrower may borrow under
the Swing Line Commitment on any Business Day until the Facility Termination
Date; PROVIDED, that such Borrower shall give the Swing Line Lender irrevocable
notice (which notice must be received by the Swing Line Lender prior to 11:00
a.m. (Chicago time)) specifying the amount of the requested Swing Line Loan,
which shall be a minimum amount of $250,000 or a whole multiple of $100,000 in
excess thereof. The proceeds of the Swing Line Loan will be made available by
the Swing Line Lender to the applicable Borrower in immediately available funds
at the office of the Swing Line Lender by 1:00 p.m. (Chicago time) on the date
of such notice. Each Borrower may at any time and from time to time, prepay the
Swing Line Loans, in whole or in part, without premium or penalty, by notifying
the Swing Line Lender prior to 11:00 a.m. (Chicago time) on any Business Day of
the date and amount of prepayment with a copy to the Agent. If any such notice
is given, the amount specified in such notice shall be due and payable on the
date specified therein. Partial prepayments shall be in an aggregate principal
amount of $250,000 or a whole multiple of $100,000 in excess thereof.
(b) If any Swing Line Loan shall remain outstanding at 11:00 a.m.
(Chicago time) on the thirtieth (30th) day following the date of such Swing
Line Loan and if by such time on such thirtieth (30th) day the Agent shall
have received from the applicable Borrower neither (i) a Borrowing Notice
delivered by Group pursuant to SECTION 2.9 requesting that Revolving Loans
be made to Group pursuant to SECTION 2.1 on such date in an amount at least
equal to the principal amount of such Swing Line Loan (without regard to
whether such Swing Line Loan was made to Group or UWLIC) nor (ii) any other
notice satisfactory to the Agent indicating such Borrower's intent to repay
such Swing Line Loan on or before such thirtieth (30th) day with funds
obtained from other sources, then on such thirtieth (30th) day the Swing
Line Lender shall (and on any previous Business Day the Swing Line Lender
in its sole discretion may), on behalf of Group (which hereby irrevocably
directs the Swing Line Lender to act on its behalf) request the Agent to
notify each Lender to make a Floating Rate Loan in an amount equal to such
Lender's Pro Rata Share of (A) in the case of such a request which is
required to be made, the amount of the relevant Swing Line Loan, and (B) in
the case of such a discretionary request, the aggregate principal amount of
the Swing Line Loans outstanding on the date such notice is given. Unless
any of the events described in SECTION 7.6 or 7.7 shall have occurred with
respect to either Borrower (in which event the procedures of paragraph (d)
of this SECTION 2.12 shall apply) each Lender shall make the proceeds of
its Revolving Loan available to the Agent for the account of the Swing Line
Lender in funds immediately available prior to 1:00 p.m. (Chicago time) on
the Business Day next succeeding the date such notice is given. The
proceeds of such Revolving Loans shall be immediately applied to repay the
outstanding Swing Line Loans. Effective on the day such Revolving Loans are
made, the portion of the Swing Line Loans so paid shall no longer be
outstanding as Swing Line Loans and shall no longer be due under the Swing
Line Note. Each Borrower shall pay to the Swing Line Lender, promptly
following the Swing Line Lender's demand, the amount of its outstanding
Swing Line Loans to the extent amounts received from Lenders are not
sufficient to repay in full such outstanding Swing Line Loans.
(c) Notwithstanding anything herein to the contrary, the Swing Line
Lender (i) shall not be obligated to make any Swing Line Loan if the
conditions set forth in ARTICLE IV have not been satisfied and (ii) shall
not make any requested Swing Line Loan if, prior to 11:00 a.m. (Chicago
time) on the date of such requested Swing Line Loan, it has received a
written notice from the Agent or any Lender directing it not to make
further Swing Line Loans because one or more of the conditions specified in
ARTICLE IV are not then satisfied.
(d) If prior to the making of a Revolving Loan required to be made by
SECTION 2.12(B) a Default described in SECTION 7.6 or 7.7 shall have
occurred and be continuing with respect to either Borrower, each Lender
will, on the date such Revolving Loan was to have been made pursuant to the
notice described in SECTION 2.12(B), purchase an undivided participating
interest in the outstanding Swing Line Loans (including accrued interest
thereon) in an amount equal to its Pro Rata Share of the aggregate
principal amount of Swing Line Loans then outstanding. Each Lender will
immediately transfer to the Agent for the benefit of the Swing Line Lender,
in immediately available funds, the amount of its participation.
(e) Whenever, at any time after a Lender has purchased a participating
interest in a Swing Line Loan, the Swing Line Lender receives any payment
on account thereof, the Swing Line Lender will distribute to the Agent for
delivery to each Lender its participating interest in such amount
(appropriately adjusted in the case of interest payments, to reflect the
period of time during which such Lender's participating interest was
outstanding and funded); PROVIDED, that in the event that such payment
received by the Swing Line Lender is required to be returned, such Lender
will return to the Agent for delivery to the Swing Line Lender any portion
thereof previously distributed by the Swing Line Lender to it.
(f) Each Lender's obligation to make the Revolving Loans referred to
in SECTION 2.12(B) and to purchase participating interests pursuant to
SECTION 2.12(D) shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any
set-off, counterclaim, recoupment, defense or other right which such Lender
or either Borrower may have against the Swing Line Lender, either Borrower
or any other Person for any reason whatsoever, (ii) the occurrence or
continuance of a Default or an Unmatured Default, (iii) any adverse change
in the condition (financial or otherwise) of either Borrower, (iv) any
breach of this Agreement or any other Loan Document by either Borrower, any
Subsidiary or any other Lender, or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.
2.13. CHANGES IN INTEREST RATE, ETC. Each Floating Rate Advance shall bear
interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is automatically converted from a
Eurodollar Advance into a Floating Rate Advance pursuant to SECTION 2.10, to but
excluding the date it is paid or is converted into a Eurodollar Advance pursuant
to SECTION 2.10 hereof, at a rate per annum equal to the Floating Rate for such
day. Changes in the rate of interest on that portion of any Advance maintained
as a Floating Rate Advance will take effect simultaneously with each change in
the Floating Rate. Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined by the Agent as applicable to
such Eurodollar Advance based upon Group's selections under SECTION 2.9 and 2.10
and otherwise in accordance with the terms hereof. No Interest Period may end
after the Facility Termination Date.
2.14. RATES APPLICABLE AFTER DEFAULT. Notwithstanding anything to the
contrary contained in SECTION 2.9 or 2.10, during the continuance of a Default
or Unmatured Default the Required Lenders may, at their option, by notice to
Group (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of SECTION 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued as a Eurodollar Advance. During the continuance of a
Default the Required Lenders may, at their option, by notice to Group (which
notice may be revoked at the option of the Required Lenders notwithstanding any
provision of SECTION 8.2 requiring unanimous consent of the Lenders to changes
in interest rates), declare that each Loan shall bear interest at the then
applicable rate per annum in effect from time to time plus 2% per annum;
PROVIDED, that during the continuance of a Default under SECTION 7.6 or 7.7, the
interest rate set forth above shall be applicable to all Loans without any
election or action on the part of the Agent or any Lender.
2.15. METHOD OF PAYMENT. All payments of the Obligations hereunder shall be
made, without setoff, deduction, or counterclaim, in immediately available funds
to the Agent at the Agent's address specified pursuant to ARTICLE XIII, or at
any other Lending Installation of the Agent specified in writing by the Agent to
Group, by noon (local time) on the date when due and shall be applied ratably by
the Agent among the Lenders. Each payment delivered to the Agent for the account
of any Lender shall be delivered promptly by the Agent to such Lender in the
same type of funds that the Agent received at its address specified pursuant to
ARTICLE XIII or at any Lending Installation specified in a notice received by
the Agent from such Lender. The Agent is hereby authorized to charge the account
of either Borrower maintained with First Chicago for each payment of principal,
interest and fees payable thereby as it becomes due hereunder.
2.16. NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS.
(a) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrowers 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 to such
Lender from time to time hereunder.
(b) The Agent shall also maintain accounts in which it will record (i)
the amount of each Loan made hereunder, the Type thereof and the Interest
Period with respect 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 Agent
hereunder from each Borrower and each Lender's share thereof.
(c) The entries maintained in the accounts maintained pursuant to
paragraphs (a) and (b) above shall be prima facie evidence of the existence
and amounts of the Obligations therein recorded; PROVIDED, that the failure
of the Agent or any Lender to maintain such accounts or any error therein
shall not in any manner affect the obligation of either Borrower to repay
the Obligations in accordance with their terms.
(d) Any Lender may request that its Revolving Loans be evidenced by a
promissory note (a "REVOLVING NOTE"). In such event, Group shall prepare,
execute and deliver to such Lender a Revolving Note payable to the order of
such Lender in a form supplied by the Agent. Thereafter, the Loans
evidenced by such Revolving Note and interest thereon shall at all times
(including after any assignment pursuant to SECTION 12.3) be represented by
one or more Revolving Notes payable to the order of the payee named therein
or any assignee pursuant to SECTION 12.3, except to the extent that any
such Lender or assignee subsequently returns any such Revolving Note for
cancellation and requests that such Revolving Loans once again be evidenced
as described in paragraphs (a) and (b) above.
2.17. TELEPHONIC NOTICES. Each Borrower hereby authorizes the Lenders and
the Agent to extend, convert or continue Advances, effect selections of Types of
Advances and to transfer funds, and the Swing Line Lender to make Swing Line
Loans, based in each case on telephonic notices made by any person or persons
the Agent or any Lender in good faith believes to be acting on behalf of such
Borrower. Each Borrower agrees to deliver promptly to the Agent a written
confirmation, if such confirmation is requested by the Agent or any Lender, of
each telephonic notice signed by an Authorized Officer. If the written
confirmation differs in any material respect from the action taken by the Agent
and the Lenders, the records of the Agent and the Lenders shall govern absent
manifest error.
2.18. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS . Interest accrued on
each Floating Rate Loan shall be payable on each Payment Date, commencing with
the first such date to occur after the date hereof and at maturity. Interest
accrued on each Eurodollar Loan shall be payable on the last day of its
applicable Interest Period, on any date on which the Eurodollar Loan is prepaid,
whether by acceleration or otherwise, and at maturity. Interest accrued on each
Eurodollar Loan having an Interest Period longer than three months shall also be
payable on the last day of each three-month interval during such Interest
Period. Interest and facility fees shall be calculated for actual days elapsed
on the basis of a 360-day year. Interest shall be payable for the day an Advance
is made but not for the day of any payment on the amount paid if payment is
received prior to noon (local time) at the place of payment. If any payment of
principal of or interest on an Advance shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
2.19. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND COMMITMENT
REDUCTIONS. Promptly after receipt thereof, the Agent will notify each Lender of
the contents of each Aggregate Commitment reduction notice, Borrowing Notice,
Conversion/Continuation Notice, and repayment notice received by it hereunder.
The Agent will notify each Lender of the interest rate applicable to each
Eurodollar Advance promptly upon determination of such interest rate and will
give each Lender prompt notice of each change in the Floating Rate.
2.20. LENDING INSTALLATIONS. Each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Loans and any Notes issued hereunder shall be deemed held
by each Lender for the benefit of such Lending Installation. Each Lender may, by
written notice to the Agent and Group in accordance with ARTICLE XIII, designate
replacement or additional Lending Installations through which Loans will be made
by it and for whose account Loan payments are to be made.
2.21. NON-RECEIPT OF FUNDS BY THE AGENT . Unless either Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (a) in the case of a Lender, the
proceeds of a Loan or (b) in the case of a Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or Borrower, as the case may be, has not in fact made such payment
to the Agent, the recipient of such payment shall, on demand by the Agent, repay
to the Agent the amount so made available together with interest thereon in
respect of each day during the period commencing on the date such amount was so
made available by the Agent until the date the Agent recovers such amount at a
rate per annum equal to (x) in the case of payment by a Lender, the Federal
Funds Effective Rate for such day or (y) in the case of payment by a Borrower,
the interest rate applicable to the relevant Loan.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. YIELD PROTECTION. If, on or after the Initial Closing Date, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(a) subjects any Lender or any applicable Lending Installation to any
Taxes, or changes the basis of taxation of payments (other than with
respect to Excluded Taxes) to any Lender in respect of its Eurodollar
Loans, or
(b) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender or
any applicable Lending Installation (other than reserves and assessments
taken into account in determining the interest rate applicable to
Eurodollar Advances), or
(c) imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation of making,
funding or maintaining its Eurodollar Loans or reduces any amount
receivable by any Lender or any applicable Lending Installation in
connection with its Eurodollar Loans, or requires any Lender or any
applicable Lending Installation to make any payment calculated by reference
to the amount of Eurodollar Loans held or interest received by it, by an
amount deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such
Lender or applicable Lending Installation of making or maintaining its
Eurodollar Loans or Commitment or to reduce the return received by such Lender
or applicable Lending Installation in connection with such Eurodollar Loans or
Commitment, then, within 15 days of demand by such Lender, Group shall pay such
Lender such additional amount or amounts as will compensate such Lender for such
increased cost or reduction in amount received.
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines the
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 15 days of demand by such
Lender, the Borrowers shall, jointly and severally, pay such Lender the amount
necessary to compensate for any shortfall in the rate of return on the portion
of such increased capital which such Lender determines is attributable to this
Agreement, its Loans or its Commitment to make Loans hereunder (after taking
into account such Lender's policies as to capital adequacy); PROVIDED, that if
any Lender fails to notify the Borrowers within 180 days after it obtains actual
knowledge of any event giving rise to the payment of additional amounts under
this SECTION 3.2, then such Lender shall only be entitled to payment for
additional amounts incurred from and after the date which is 180 days prior to
the date that such Lender gives such notice. "CHANGE" means (a) any change after
the Initial Closing Date in the Risk-Based Capital Guidelines or (b) any
adoption of or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender or any
Lending Installation or any corporation controlling any Lender. "RISK-BASED
CAPITAL GUIDELINES" means (x) the risk-based capital guidelines in effect in the
United States on the date of this Agreement, including transition rules, and (y)
the corresponding capital regulations promulgated by regulatory authorities
outside the United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3. AVAILABILITY OF TYPES OF ADVANCES. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (a) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (b) the interest rate applicable to a Type of Advance does not
accurately reflect the cost of making or maintaining such Advance, then the
Agent shall suspend the availability of the affected Type of Advance and require
any affected Eurodollar Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by SECTION 3.4.
3.4. FUNDING INDEMNIFICATION. If any payment of a Eurodollar Advance occurs
on a date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise, or a Eurodollar Advance is not
made on the date specified by Group for any reason other than default by the
Lenders, Group will indemnify each Lender for any loss or cost incurred by it
resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain such Eurodollar
Advance.
3.5. TAXES.
(a) All payments by the Borrower to or for the account of any Lender
or the Agent hereunder or under any Note shall be made free and clear of
and without deduction for any and all Taxes. If either Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or the Agent, (i) the sum payable shall be
increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
SECTION 3.5) such Lender or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) such Borrower shall make such deductions, (iii) such Borrower
shall pay the full amount deducted to the relevant authority in accordance
with applicable law and (iv) such Borrower shall furnish to the Agent the
original copy of a receipt evidencing payment thereof within 30 days after
such payment is made.
(b) In addition, each Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or
under any Note or from the execution or delivery of, or otherwise with
respect to, this Agreement or any Note ("OTHER TAXES").
(c) Each Borrower hereby agrees to indemnify the Agent and each Lender
for the full amount of Taxes or Other Taxes (including, without limitation,
any Taxes or Other Taxes imposed on amounts payable under this SECTION 3.5)
paid by the Agent or such Lender and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto. Payments
due under this indemnification shall be made within 30 days of the date the
Agent or such Lender makes demand therefor pursuant to SECTION 3.6.
(d) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "NON-U.S. LENDER") agrees that
it will, not less than ten Business Days after the date of this Agreement,
(i) deliver to each of Group and the Agent two duly completed copies of
United States Internal Revenue Service Form 1001 or 4224, certifying in
either case that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal
income taxes, and (ii) deliver to each of Group and the Agent a United
States Internal Revenue Form W-8 or W-9, as the case may be, and certify
that it is entitled to an exemption from United States backup withholding
tax. Each Non-U.S. Lender further undertakes to deliver to each of Group
and the Agent (x) renewals or additional copies of such form (or any
successor form) on or before the date that such form expires or becomes
obsolete, and (y) after the occurrence of any event requiring a change in
the most recent forms so delivered by it, such additional forms or
amendments thereto as may be reasonably requested by Group or the Agent.
All forms or amendments described in the preceding sentence shall certify
that such Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes,
unless an event (including without limitation any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which
would prevent such Lender from duly completing and delivering any such form
or amendment with respect to it and such Lender advises Group and the Agent
that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.
(e) For any period during which a Non-U.S. Lender has failed to
provide Group with an appropriate form pursuant to clause (d) above (unless
such failure is due to a change in treaty, law or regulation, or any change
in the interpretation or administration thereof by any governmental
authority, occurring subsequent to the date on which a form originally was
required to be provided), such Non-U.S. Lender shall not be entitled to
indemnification under this SECTION 3.5 with respect to Taxes imposed by the
United States; PROVIDED, that, should a Non-U.S. Lender which is otherwise
exempt from or subject to a reduced rate of withholding tax become subject
to Taxes because of its failure to deliver a form required under clause (d)
above, the Borrowers shall take such steps as such Non-U.S. Lender shall
reasonably request to assist such Non-U.S. Lender to recover such Taxes.
(f) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall
deliver to Group (with a copy to the Agent), at the time or times
prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to
be made without withholding or at a reduced rate.
3.6. LENDER STATEMENTS; SURVIVAL OF INDEMNITY. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrowers to such
Lender under SECTIONS 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under SECTION 3.3, so long as such designation is not, in
the judgment of such Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to Group (with a copy to the Agent)
as to the amount due, if any, under SECTION 3.1, 3.2, 3.4 or 3.5. Such written
statement shall set forth in reasonable detail the calculations upon which such
Lender determined such amount and shall be final, conclusive and binding on each
Borrower in the absence of manifest error. Determination of amounts payable
under such Sections in connection with a Eurodollar Loan shall be calculated as
though each Lender funded its Eurodollar Loan through the purchase of a deposit
of the type and maturity corresponding to the deposit used as a reference in
determining the Eurodollar Rate applicable to such Loan, whether in fact that is
the case or not. Unless otherwise provided herein, the amount specified in the
written statement of any Lender shall be payable on demand after receipt by
Group of such written statement. The obligations of each Borrower under SECTIONS
3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations and termination
of this Agreement.
3.7. SUBSTITUTION OF LENDER. Upon the receipt by either Borrower from any
Lender (an "AFFECTED LENDER") of a claim for compensation under SECTION 3.1, 3.2
or 3.5 or a notice in accordance with SECTION 3.3 regarding the unavailability
of a Type of Advance, such Borrower may: (a) request the Affected Lender to use
commercially reasonable efforts to obtain a replacement bank or other entity
satisfactory to such Borrower to acquire and assume all or a ratable part of all
of such Affected Lender's Loans and Commitment at the face amount thereof (a
"REPLACEMENT LENDER"); (b) request one or more of the other Lenders to acquire
and assume all or part of such Affected Lender's Loans and Commitment (which
request each such other Lender may decline or agree to in its sole discretion);
or (c) designate a Replacement Lender. Any such designation of a Replacement
Lender under clause (a) or (c) shall be subject to the prior written consent of
the Agent (which consent shall not unreasonably be withheld). Any transfer of
Loans or Commitment pursuant to this Section shall be made in accordance with
SECTION 12.3 and SECTION 3.4, if applicable.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. EFFECTIVENESS. This Agreement shall not be effective unless the
Borrowers have furnished to the Agent with sufficient copies for the Lenders:
(a) GOOD STANDING CERTIFICATES. Copies of a certificate of existence
(or its equivalent) for each of Group, Holdings and UWLIC, each certified
by the appropriate governmental officer in its jurisdiction of
incorporation.
(b) RESOLUTIONS. Copies, certified by the Secretary or Assistant
Secretary of each of Group, Holdings and UWLIC of its Board of Directors'
resolutions.
(c) SECRETARY'S CERTIFICATE. An incumbency certificate, executed by
the Secretary or Assistant Secretary of each Borrower and of Holdings,
which shall identify by name and title and bear the signatures of the
Authorized Officers and any other officers of such Borrower or Holdings
authorized to sign the Loan Documents to which such Borrower or Holdings,
as applicable, is a party and, in respect of the Borrowers, to make
borrowings hereunder, upon which certificates of the Borrowers the Agent
and the Lenders shall be entitled to rely until informed of any change in
writing by such Borrower.
(d) OFFICER'S CERTIFICATE. A certificate, dated the date of this
Agreement, signed by an Authorized Officer of each Borrower, in form and
substance satisfactory to the Agent, to the effect that: (i) on such date
(both before and after giving effect to the making of the Loans hereunder,
the execution and delivery of the Guaranty and the consummation of the
other transactions contemplated hereby and by the other Loan Documents
(collectively, the "CLOSING TRANSACTIONS")) no Default or Unmatured Default
has occurred and is continuing; (ii) no injunction or temporary restraining
order which would prohibit the making of the Loans or the consummation of
any of the Closing Transactions, or other litigation which could reasonably
be expected to have a Material Adverse Effect, is pending or, to the best
of such Person's knowledge, threatened; (iii) all orders, consents,
approvals, licenses, authorizations or validations of, or filings,
recordings or registrations with, or exemptions by, any governmental or
public body or authority, or any subdivision thereof, required to make or
consummate the Closing Transactions have been or, prior to the time
required, will have been, obtained, given, filed or taken and are or will
be in full force and effect (or the Borrowers or Holdings, as applicable,
have obtained effective relief with respect to the application thereof) and
all applicable waiting periods have expired; (iv) each of the
representations and warranties set forth in ARTICLE V of this Agreement is
true and correct on and as of such date; (v) the Distribution has been
consummated substantially in accordance with the description thereof set
forth in the Information Statement; and (vi) since December 31, 1997, no
event or change has occurred that has caused or evidences a Material
Adverse Effect.
(e) LEGAL OPINION. A written opinion of Xxxxxxx & Xxxxx, counsel to
the Borrowers and the Guarantor, addressed to the Agent and the Lenders in
form and substance acceptable to the Agent and its counsel.
(f) NOTES. Any Notes requested by a Lender pursuant to SECTION 2.11 or
2.16 payable to the order of each such requesting Lender.
(g) LETTERS OF DIRECTION. Written money transfer instructions with
respect to the Loans in form and substance acceptable to the Agent and its
counsel addressed to the Agent and signed by an Authorized Officer,
together with such other related money transfer authorizations as the Agent
may have reasonably requested.
(h) LOAN DOCUMENTS. Executed originals of the Agreement, together with
all schedules, exhibits, certificates, instruments, opinions, documents and
financial statements required to be delivered pursuant hereto and thereto.
(i) SOLVENCY CERTIFICATE. A written solvency certificate from the
chief financial officer of each Borrower in form and content satisfactory
to the Agent, dated the date of this Agreement, with respect to the value,
solvency and other factual information of, or relating to, as the case may
be, such Borrower and its Subsidiaries, taken as a whole, both before and
after giving effect to the Closing Transactions.
(j) REGULATORY MATTERS. Receipt of any required regulatory approvals
from any Governmental Authority with respect to the Closing Transactions.
(k) OTHER. Such other documents as the Agent, any Lender or their
counsel may have reasonably requested.
4.2. EACH ADVANCE AND SWING LINE LOAN. The Lenders shall not be required to
make any Advance (other than an Advance that, after giving effect thereto and to
the application of the proceeds thereof, does not increase the aggregate amount
of outstanding Advances) and the Swing Line Lender shall not be required to make
any Swing Line Loan, unless on the applicable Borrowing Date:
(a) There exists no Default or Unmatured Default.
(b) The representations and warranties contained in ARTICLE V are true
and correct in all material respects as of such Borrowing Date except to
the extent any such representation or warranty is stated to relate solely
to an earlier date, in which case such representation or warranty shall
have been true and correct on and as of such earlier date.
(c) All legal matters incident to the making of such Advance or Swing
Line Loan shall be satisfactory to the Lenders and their counsel.
Each Borrowing Notice with respect to each such Advance and each request
for a Swing Line Loan shall constitute a representation and warranty by the
applicable Borrower that the conditions contained in SECTION 4.2(A) and (B) have
been satisfied. Any Lender may require a duly completed compliance certificate
in substantially the form of EXHIBIT A as a condition to making an Advance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to the Lenders that, both before and
after giving effect to the Closing Transactions:
5.1. EXISTENCE AND STANDING . Each of Group and each Subsidiary is a
corporation, partnership (in the case of Subsidiaries only) or limited liability
company duly and properly incorporated or organized, as the case may be, validly
existing and (to the extent such concept applies to such entity) in good
standing under the laws of its jurisdiction of incorporation or organization and
has all requisite authority to conduct its business in each jurisdiction in
which its business is conducted, except where the failure to be so qualified,
licensed or authorized could not reasonably be expected to have a Material
Adverse Effect.
5.2. AUTHORIZATION AND VALIDITY. Each of Holdings, UWLIC and Group has the
power and authority and legal right to execute and deliver the Loan Documents to
which it is a party and to perform its obligations thereunder. The execution and
delivery by Holdings, UWLIC and Group of the Loan Documents to which it is a
party and the performance of its obligations thereunder have been duly
authorized by proper corporate proceedings, and the Loan Documents to which each
such Person is a party constitute legal, valid and binding obligations of such
Person enforceable against such Person in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
5.3. NO CONFLICT; GOVERNMENT CONSENT . Neither the execution and delivery
by either Holdings, UWLIC or Group of the Loan Documents to which it is a party,
the consummation of the Closing Transactions nor compliance with the provisions
of the Loan Documents will, or at the relevant time did, violate (a) any law,
rule, regulation (including Regulations T, U and X), order, writ, judgment,
injunction, decree or award binding on Group or any of its Subsidiaries, (b)
Group's or any of its Subsidiaries' articles or certificate of incorporation,
partnership agreement, certificate of partnership, articles or certificate of
organization, by-laws, or operating or other management agreement, as the case
may be, or (c) the provisions of any indenture, instrument or agreement to which
Group or any of its Subsidiaries is a party or is subject, or by which it, or
its Property, is bound, or conflict with or constitute a default thereunder, or
result in, or require, the creation or imposition of any Lien in, of or on the
Property of Group or any Subsidiary pursuant to the terms of any such indenture,
instrument or agreement, except for any violation of any such law, rule,
regulation, order, writ, judgment, injunction, decree, award, indenture,
instrument or agreement that could not reasonably be expected to have a Material
Adverse Effect. Except as set forth in SCHEDULE 5.3 hereto, no order, consent,
adjudication, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, or other action in respect of
any Governmental Authority, or any subdivision thereof, or any other Person
(including without limitation the stockholders of any Person) is required to be
obtained by Group or any Subsidiary in connection with the execution and
delivery of the Loan Documents, the borrowings under this Agreement, the payment
and performance by either Borrower of the Obligations, the execution and
delivery of the Guaranty or the legality, validity, binding effect or
enforceability of any of the Loan Documents or the consummation of any of the
Closing Transactions.
5.4. FINANCIAL STATEMENTS. The Borrowers have heretofore furnished to the
Agent and each of the Lenders (a) the December 31, 1997 audited consolidated
financial statements of Group and its Subsidiaries, (b) the unaudited
consolidated financial statements of Group and its Subsidiaries through June 30,
1998, (c) the December 31, 1997 audited Annual Statement of each Material
Insurance Subsidiary and (d) the June 30, 1998 Quarterly Statement of each
Material Insurance Subsidiary (collectively, the "FINANCIAL STATEMENTS"). Each
of the Financial Statements was prepared in accordance with generally accepted
accounting principles or statutory accounting practices, as applicable, and (in
the case of the Financial Statements prepared in accordance with generally
accepted accounting principles) fairly presents the consolidated financial
condition and operations of Group and its Subsidiaries at such dates and the
consolidated results of their operations for the respective periods then ended
(except, in the case of such unaudited statements, for normal year-end audit
adjustments).
5.5. MATERIAL ADVERSE CHANGE . Since December 31, 1997 there has been no
change in the business, Property, prospects, performance, condition (financial
or otherwise) or operations of Group and its Subsidiaries which could reasonably
be expected to have a Material Adverse Effect.
5.6. TAXES. Each of Group and each of its Subsidiaries have filed all
United States federal tax returns and all other tax returns which are required
to be filed and have paid all taxes due pursuant to said returns or pursuant to
any assessment received by Group or any such Subsidiary, except such taxes, if
any, as are being contested in good faith and as to which adequate reserves have
been provided in accordance with Agreement Accounting Principles or SAP, as
applicable, and as to which no Lien exists. The United States income tax returns
of Group and its Subsidiaries have been audited by the Internal Revenue Service
through the fiscal year ended December 31, 1987. No tax liens have been filed
and no claims are being asserted with respect to any such taxes. The charges,
accruals and reserves on the books of Group and its Subsidiaries in respect of
any taxes or other governmental charges are in accordance with Agreement
Accounting Principles or SAP, as applicable.
5.7. LITIGATION AND CONTINGENT OBLIGATIONS. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting Group or
any of its Subsidiaries which could reasonably be expected to have a Material
Adverse Effect or which seeks to prevent, enjoin or delay the making of any
Loans or the consummation of any other Closing Transaction. Other than any
liability incident to any litigation, arbitration or proceeding could not
reasonably be expected to have a Material Adverse Effect, none of Group or any
of its Subsidiaries has any material contingent obligations not provided for or
disclosed in the Financial Statements.
5.8. SUBSIDIARIES. SCHEDULE 5.8 contains an accurate list of all
Subsidiaries of Group as of the date of this Agreement, setting forth their
respective jurisdictions of organization and the percentage of their respective
capital stock or other ownership interests owned by Group or other Subsidiaries.
All of the issued and outstanding shares of capital stock or other ownership
interests of such Subsidiaries have been (to the extent such concepts are
relevant with respect to such ownership interests) duly authorized and issued
and are fully paid and non-assessable.
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans do not in
the aggregate exceed $250,000. Neither Group, UWLIC nor any other member of the
Controlled Group maintains, or is obligated to contribute to, any Multiemployer
Plans. Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan, neither Group, UWLIC nor any other member of the Controlled
Group has withdrawn from any Plan or initiated steps to do so, and no steps have
been taken to reorganize or terminate any Plan.
5.10. ACCURACY OF INFORMATION. No information, exhibit or report furnished
by Group or any of its Subsidiaries to the Agent or to any Lender in connection
with the negotiation of, or compliance with, the Loan Documents contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein not misleading.
5.11. FEDERAL RESERVE REGULATIONS. Neither Group nor any of its
Subsidiaries is engaged, directly or indirectly, principally, or as one of its
important activities, in the business of extending, or arranging for the
extension of, credit for the purpose of purchasing or carrying Margin Stock. No
part of the proceeds of any Loan will be used in a manner which would violate,
or result in a violation of, Regulation T, Regulation U or Regulation X. Neither
the making of any Loan hereunder nor the use of the proceeds thereof will
violate or be inconsistent with the provisions of Regulation T, Regulation U or
Regulation X. Following the application of the proceeds of the Loans, less than
25% of the value (as determined by any reasonable method) of the assets of Group
and its Subsidiaries which are subject to any limitation on sale, pledge, or
other restriction hereunder taken as a whole have been, and will continue to be,
represented by Margin Stock.
5.12. MATERIAL AGREEMENTS . Neither Group nor any Subsidiary is a party to
any agreement or instrument or subject to any charter or other corporate
restriction which could reasonably be expected to have a Material Adverse
Effect. Neither Group nor any Subsidiary is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in (a) any agreement to which it is a party, which default could
reasonably be expected to have a Material Adverse Effect or (b) any agreement or
instrument evidencing or governing any Material Indebtedness.
5.13. COMPLIANCE WITH LAWS. Group and its Subsidiaries have complied with
all applicable statutes, rules, regulations, orders and restrictions of any
domestic or foreign government or any instrumentality or agency thereof having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property except for any failure to comply with any of the
foregoing which could not reasonably be expected to have a Material Adverse
Effect.
5.14. OWNERSHIP OF PROPERTIES . On the date of this Agreement, Group and
its Subsidiaries have good title, free of all Liens other than those permitted
by SECTION 6.15, to all of the Property and assets reflected in Group's most
recent consolidated financial statements provided to the Agent as owned by Group
and its Subsidiaries.
5.15. PLAN ASSETS; PROHIBITED TRANSACTIONS . Neither Borrower is an entity
deemed to hold "plan assets" within the meaning of 29 C.F.R. ss. 2510.3-101 of
an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA or any plan (within the meaning of Section 4975 of the
Code), and neither the execution of this Agreement nor the making of Loans
hereunder gives rise to a prohibited transaction within the meaning of Section
406 of ERISA or Section 4975 of the Code.
5.16. ENVIRONMENTAL MATTERS. In the ordinary course of its business, the
officers of the Borrowers consider the effect of Environmental Laws on the
business of Group and its Subsidiaries, in the course of which they identify and
evaluate potential risks and liabilities accruing to the Borrowers due to
Environmental Laws. On the basis of this consideration, each Borrower has
concluded that Environmental Laws cannot reasonably be expected to has a
Material Adverse Effect. Neither Group nor any of its Subsidiaries has received
any notice to the effect that its operations are not in material compliance with
any of the requirements of applicable Environmental Laws or are the subject of
any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of any toxic or hazardous waste or substance into
the environment, which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.
5.17. INVESTMENT COMPANY ACT . Neither Group nor any Subsidiary is an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.18. PUBLIC UTILITY HOLDING COMPANY ACT. Neither Group nor any Subsidiary
is a "holding company" or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
5.19. INSURANCE. Group and its Subsidiaries maintain insurance on their
Property with such companies, in such amounts and covering such risks as is, in
each case, consistent with sound business practice.
5.20. SOLVENCY. Immediately after the consummation of the Closing
Transactions and immediately following the making of each Loan, if any, made on
the date hereof and after giving effect to the application of the proceeds of
such Loans, (a) the fair value of the assets of each Borrower and its
Subsidiaries on a consolidated basis, at a fair valuation, will exceed the debts
and liabilities, subordinated, contingent or otherwise, of such Borrower and its
Subsidiaries on a consolidated basis; (b) the present fair saleable value of the
assets of each Borrower and its Subsidiaries on a consolidated basis will be
greater than the amount that will be required to pay the probable liability of
such Borrower and its Subsidiaries on a consolidated basis on their debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) each Borrower and its
Subsidiaries on a consolidated basis will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each Borrower and its
Subsidiaries on a consolidated basis will not have unreasonably small capital
with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the date
hereof.
5.21. YEAR 2000. Each Borrower has made a full and complete assessment of
the Year 2000 Issues and has a realistic and achievable program for remediating
the Year 2000 Issues on a timely basis (the "YEAR 2000 PROGRAM"). Based on such
assessment and on the Year 2000 Program the Borrowers do not reasonably
anticipate that Year 2000 Issues will have a Material Adverse Effect.
5.22. INSURANCE LICENSES. SCHEDULE 5.22 hereto lists the jurisdiction of
domicile of each Material Insurance Subsidiary, the line or lines of insurance
in which each Material Insurance Subsidiary is engaged and the jurisdictions in
which each Material Insurance Subsidiary holds a License and is authorized to
transact insurance business, in each case as of the date of this Agreement. No
License, the loss of which could reasonably be expected to have a Material
Adverse Effect, is the subject of a proceeding for suspension or revocation. To
either Borrower's knowledge, there is no sustainable basis for such suspension
or revocation, and no such suspension or revocation has been threatened by any
Governmental Authority. To either Borrower's knowledge, no Material Insurance
Subsidiary has received written notice from any Governmental Authority that it
is deemed to be "commercially domiciled" for insurance regulatory purposes in
any jurisdiction other than that indicated on SCHEDULE 5.22.
5.23. REINSURANCE. SCHEDULE 5.23 lists all ceded or assumed reinsurance
agreements to which any Material Insurance Subsidiary is, as of the date of this
Agreement, a party, which are currently in force, and under which there is
liability by either party to the agreement (collectively, the "EXISTING
REINSURANCE AGREEMENTS"). Each of the Existing Reinsurance Agreements is in full
force and effect, is valid and binding in all material respects in accordance
with its terms, and, as of the date hereof, no Material Insurance Subsidiary
has, to either Borrower's knowledge, received notice (other than provisional
notices of cancellation received in the ordinary course of business) that any
other party to an in-force Existing Reinsurance Agreement will cancel or not
renew such agreement, which cancellation or nonrenewal could reasonably be
expected to have a Material Adverse Effect. Neither Borrower has any knowledge
as of the date hereof that any amount recoverable by any Material Insurance
Subsidiary pursuant to any Existing Reinsurance Agreement is not fully
collectible in due course. To the knowledge of either Borrower, no Material
Insurance Subsidiary is in default in any material respect as to any Existing
Reinsurance Agreement. Except as disclosed in SCHEDULE 5.23, each Material
Insurance Subsidiary is entitled to take full credit in its statutory financial
statements for ceded reinsurance under the Existing Reinsurance Agreements
pursuant to applicable insurance laws. Except as disclosed in SCHEDULE 5.23,
there is no claim under any Existing Reinsurance Agreement in excess of $100,000
which is disputed by any other party to such agreement.
5.24. RESERVES. Except as set forth on SCHEDULE 5.24, each reserve and
other material liability amount in respect of the insurance business, including,
without limitation, material reserve and other material liability amounts in
respect of insurance policies of each Material Insurance Subsidiary, established
or reflected in the SAP Financial Statements for the year ended December 31,
1997 of such Material Insurance Subsidiary, was determined in accordance with
generally accepted actuarial standards consistently applied, was fairly stated
in accordance with sound actuarial principles and was in compliance with the
requirements of the insurance laws, rules and regulations of its state of
domicile as of the date thereof. Each Material Insurance Subsidiary owns assets
that qualify as admitted assets under applicable law in an amount at least equal
to the sum of all such reserves and liability amounts and its minimum Statutory
Capital and Surplus as required by the insurance laws, rules and regulations of
its state of domicile.
5.25. UWLIC CAPITAL AND SURPLUS. As of the date of this Agreement, UWLIC
has a Statutory Capital and Surplus of at least $176,500,000.
5.26. DEFAULTS. No Default or Unmatured Default has occurred and is
continuing.
5.27. CERTAIN FEES. No broker's or finder's fee or commission was, is or
will be payable by Group or any Subsidiary with respect to any of the
transactions contemplated by this Agreement or any other Closing Transaction
other than the Distribution. Each Borrower hereby agrees to indemnify the Agent
and the Lenders against and agrees that it will hold each of them harmless from
any claim, demand or liability for broker's or finder's fees or commissions
alleged to have been incurred by Group or any of its Subsidiaries in connection
with any of the transactions contemplated by this Agreement or any other Closing
Transaction and any expenses (including, without limitation, attorneys' fees and
time charges of attorneys for the Agent or any Lender, which attorneys may be
employees of the Agent or any Lender) arising in connection with any such claim,
demand or liability. No other similar fee or commissions will be payable by
Group or any Subsidiary for any other services rendered to Group or any
Subsidiary ancillary to any of the transactions contemplated by this Agreement
or any other Closing Transaction.
5.28. INDEBTEDNESS. Attached hereto as SCHEDULE 5.28 is a complete and
correct list of all Indebtedness of Group and its Subsidiaries outstanding on
the date of this Agreement (other than Indebtedness in a principal amount not
exceeding $50,000 for a single item of Indebtedness and $100,000 in the
aggregate for all such Indebtedness listed), showing the aggregate principal
amount which was outstanding on such date after giving effect to the Closing
Transactions.
5.29. EMPLOYEE CONTROVERSIES. There are no strikes, work stoppages or
controversies pending or threatened between Group or any of its Subsidiaries and
any of its employees, other than employee grievances arising in the ordinary
course of business, which, in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
5.30. DIVIDENDS. No Insurance Subsidiary is subject to any regulatory
prohibition regarding the declaration or payment of dividends that is not
generally applicable to all insurance companies which are domiciled in the same
jurisdiction and are engaged in the same line of business as such Insurance
Subsidiary.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. FINANCIAL REPORTING. Group will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with generally accepted accounting principles, consistently applied, and furnish
to the Lenders:
(a) As soon as practicable and in any event within 120 days after the
close of each of its Fiscal Years, an unqualified (except for
qualifications relating to changes in accounting principles or practices
reflecting changes in generally accepted accounting principles and required
or approved by the Borrowers' independent certified public accountants)
audit report certified by independent certified public accountants
acceptable to the Lenders, prepared in accordance with Agreement Accounting
Principles on a consolidated and consolidating basis (consolidating
statements need not be certified by such accountants) for itself and its
Subsidiaries, including balance sheets as of the end of such period and
related statements of income, retained earnings and cash flows, accompanied
by (i) any management letter prepared by said accountants, (ii) a
certificate of said accountants that, in the course of their examination
necessary for their certification of the foregoing, they have obtained no
knowledge of any Default or Unmatured Default, or if, in the opinion of
such accountants, any Default or Unmatured Default shall exist, stating the
nature and status thereof, and (iii) a letter from said accountants
addressed to the Lenders acknowledging that the Lenders are extending
credit in primary reliance on such financial statements and authorizing
such reliance.
(b) As soon as practicable and in any event within 60 days after the
close of the first three Fiscal Quarters of each of its Fiscal Years, for
itself and its Subsidiaries, consolidated and consolidating unaudited
balance sheets as at the close of each such period and consolidated and
consolidating statements of income, retained earnings and cash flows for
the period from the beginning of such fiscal year to the end of such
quarter, all certified by its chief financial officer.
(c) (i) Upon the earlier of (A) fifteen days after the regulatory
filing date or (B) 75 days after the close of each Fiscal Year of each
Material Insurance Subsidiary, copies of the unaudited Annual Statement of
such Material Insurance Subsidiary, certified by the chief financial
officer of such Material Insurance Subsidiary, all such statements to be
prepared in accordance with SAP consistently applied throughout the periods
reflected therein and (ii) no later than each June 15, copies of annual
financial statements of such Material Insurance Subsidiary, prepared in
accordance with SAP, audited and certified by independent certified public
accountants of recognized annual standing.
(d) Upon the earlier of (i) ten (10) days after the regulatory filing
date or (ii) 60 days after the close of each of the first three Fiscal
Quarters of each Fiscal Year of each Material Insurance Subsidiary, copies
of the Quarterly Statement of each of the Material Insurance Subsidiaries,
certified by the chief financial officer of such Material Insurance
Subsidiary, all such statements to be prepared in accordance with SAP
consistently applied through the period reflected herein.
(e) Promptly and in any event within ten days after (i) learning
thereof, notification of any changes after the date hereof in the rating
given by A.M. Best & Co. in respect of any Insurance Subsidiary and (ii)
receipt thereof, copies of any ratings analysis by A.M. Best & Co. relating
to any Insurance Subsidiary.
(f) Copies of any actuarial certificates prepared with respect to any
Material Insurance Subsidiary, promptly after the receipt thereof.
(g) As soon as available, but in any event within 90 days after the
beginning of each Fiscal Year of Group, a copy of the plan and forecast
(including a projected consolidated and consolidating balance sheet, income
statement and funds flow statement) of Group and its Subsidiaries for such
Fiscal Year.
(h) Together with the financial statements required by clauses (a) and
(b) above, a compliance certificate in substantially the form of EXHIBIT A
signed by its chief financial officer showing the calculations necessary to
determine compliance with this Agreement and stating that no Default or
Unmatured Default exists, or if any Default or Unmatured Default exists,
stating the nature and status thereof.
(i) Within 270 days after the close of each Fiscal Year, a statement
of the Unfunded Liabilities of each Single Employer Plan, if any, certified
as correct by an actuary enrolled under ERISA.
(j) As soon as possible and in any event within 10 days after Group
knows that any Reportable Event has occurred with respect to any Plan, a
statement, signed by the chief financial officer of Group, describing said
Reportable Event and the action proposed to be taken with respect thereto,
and as soon as possible and in any event within ten (10) days after
learning thereof, notification of any Lien imposed by the PBGC or the IRS
on the assets of any member of the Controlled Group in respect of any Plan
maintained by any such member (or any other employee pension benefit plan
as to which any such member may be liable) which, together with all such
Liens, relates to liabilities in excess of ten percent of the net worth
(determined according to generally accepted accounting principles and
without reduction for any reserve for such liabilities) of Group and its
Subsidiaries.
(k) As soon as possible and in any event within 10 days after receipt
by Group or any of its Subsidiaries, a copy of (i) any notice or claim to
the effect that Group or any of its Subsidiaries is or may be liable to any
Person as a result of the release by Group, any of its Subsidiaries or any
other Person of any toxic or hazardous waste or substance into the
environment, and (ii) any notice alleging any violation of any federal,
state or local environmental, health or safety law or regulation by Group
or any of its Subsidiaries which could, in the case of either clause (i) or
(ii), reasonably be expected to have a Material Adverse Effect.
(l) Promptly upon the furnishing thereof to the shareholders of Group
copies of all financial statements, reports and proxy statements so
furnished.
(m) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which
Group or any of its Subsidiaries files with the Securities and Exchange
Commission, the National Association of Securities Dealers, any securities
exchange, the NAIC or any insurance commission or department or analogous
Governmental Authority (including without limitation, any filing made by
Group or any Subsidiary pursuant to any insurance holding company act or
related rules or regulations), but excluding routine or non-material
filings with the NAIC, any insurance commissioner or department or
analogous Governmental Authority.
(n) Promptly and in any event within ten (10) days after learning
thereof, notification of (i) any tax assessment, demand, notice of proposed
deficiency or notice of deficiency received by Group or any other
Consolidated Person or (ii) the filing of any tax Lien or commencement of
any judicial proceeding by or against any such Consolidated Person, if any
such assessment, demand, notice, Lien or judicial proceeding (or all such
assessments, demands, notices, Liens and judicial proceedings, in the
aggregate) relates to tax liabilities in excess of ten percent (10%) of the
net worth (determined according to generally accepted accounting standards
and without reduction for any reserve for such liabilities) of Group and
its Subsidiaries taken as a whole.
(o) Such other information (including, without limitation, the annual
Best's Advance Report Service report prepared with respect to each
Insurance Subsidiary rated by A.M. Best & Co.) as the Agent or any Lender
may from time to time reasonably request.
6.2. USE OF PROCEEDS . Each Borrower will, and will cause each Subsidiary
to, use the proceeds of the Loan to lend funds to Group to meet the general
corporate needs of Group and its Subsidiaries and to repay outstanding Loans.
Neither Borrower will, nor will it permit any Subsidiary to, use any of the
proceeds of the Loans to purchase or carry any "margin stock" (as defined in
Regulation U) or to finance the Purchase of any Person which has not been
approved and recommended by the Board of Directors (or functional equivalent
thereof) of such Person.
6.3. NOTICE OF DEFAULT. Each Borrower will, and will cause each Subsidiary
to, give prompt notice in writing to the Lenders of (a) the occurrence of any
Default or Unmatured Default, (b) the occurrence of any other development,
financial or otherwise (including, without limitation, developments with respect
to Year 2000 Issues), relating specifically to Group or any of its Subsidiaries
(and not of a general economic or political nature) which could reasonably be
expected to have a Material Adverse Effect, (c) the receipt of any notice from
any Governmental Authority of the expiration without renewal, revocation or
suspension of, or the institution of any proceedings to revoke or suspend, any
License now or hereafter held by any Insurance Subsidiary which is required to
conduct insurance business in compliance with all applicable laws and
regulations and the expiration, revocation or suspension of which could
reasonably be expected to have a Material Adverse Effect, (d) the receipt of any
notice from any Governmental Authority of the institution of any disciplinary
proceedings against or in respect of any Insurance Subsidiary, or the issuance
of any order, the taking of any action or any request for an extraordinary audit
for cause by any Governmental Authority which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect, (e) any judicial or
administrative order limiting or controlling the insurance business of any
Insurance Subsidiary (and not the insurance industry generally) which has been
issued or adopted and which has had, or could reasonably be expected to have, a
Material Adverse Effect, or (f) the commencement of any litigation which could
reasonably be expected to create a Material Adverse Effect.
6.4. CONDUCT OF BUSINESS. Each Borrower will, and will cause each
Subsidiary to, (a) carry on and conduct its business only in substantially the
same manner and in substantially the same fields of enterprise as it is
presently conducted, (b) with respect to each Insurance Subsidiary, only engage
in the life, accident and health insurance business, (c) do all things necessary
to remain duly incorporated, validly existing and in good standing in its
jurisdiction of incorporation and its jurisdiction of domicile and maintain all
requisite authority to conduct its business in each other jurisdiction in which
its business is conducted, and (d) do all things necessary to renew, extend and
continue in effect all Licenses which may at any time and from time to time be
necessary for any Insurance Subsidiary to operate its insurance business in
compliance with all applicable laws and regulations; PROVIDED, that any
Insurance Subsidiary may withdraw from one or more states (other than its state
of domicile) as an admitted insurer if such withdrawal is determined by such
Insurance Subsidiary's Board of Directors to be in the best interest of such
Insurance Subsidiary and could not reasonably be expected to have a Material
Adverse Effect. No Material Insurance Subsidiary shall change its state of
domicile or incorporation without the prior written consent of the Required
Lenders, which shall not unreasonably be withheld or delayed. Each Wholly-Owned
Subsidiary in existence as of the date of this Agreement shall continue to be a
Wholly-Owned Subsidiary; PROVIDED, that all of the capital stock of any
Subsidiary (other than UWLIC) may be sold in compliance with SECTION 6.13
hereof.
6.5. TAXES. Each Borrower will, and will cause each Subsidiary to, timely
file complete and correct United States federal and applicable foreign, state
and local tax returns required by law and pay when due all taxes, assessments
and governmental charges and levies upon it or its income, profits or Property,
except those which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside in accordance
with Agreement Accounting Principles.
6.6. INSURANCE. Each Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts and covering such risks as is consistent with
sound business practice, and each Borrower will furnish to the Agent or any
Lender upon request full information as to the insurance carried.
6.7. COMPLIANCE WITH LAWS. Each Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws, the failure to comply with which
could reasonably be expected to have a Material Adverse Effect.
6.8. MAINTENANCE OF PROPERTIES. Each Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times.
6.9. INSPECTION. Each Borrower will, and will cause each Subsidiary to,
permit the Agent and the Lenders, by their respective representatives and
agents, to inspect any of the Property, books and financial records of Group and
its Subsidiaries, to examine and make copies of the books of accounts and other
financial records of Group and its Subsidiaries, and to discuss the affairs,
finances and accounts of Group and its Subsidiaries with, and to be advised as
to the same by, their respective officers at such reasonable times and intervals
as the Agent or any Lender may designate; PROVIDED, that so long as no Event of
Default has occurred and is continuing, the Agent and the Lenders shall provide
advance notice of any inspection or examination. Each Borrower will keep or
cause to be kept, and cause each Subsidiary to keep or cause to be kept,
appropriate records and books of account in which complete entries are to be
made reflecting its and their business and financial transactions, such entries
to be made in accordance with Agreement Accounting Principles or SAP, as
applicable, consistently applied.
6.10. DIVIDENDS. Neither Borrower will, nor will it permit any Subsidiary
to, declare or pay any dividends or make any distributions on its capital stock
(other than dividends payable in its own capital stock) or redeem, repurchase or
otherwise acquire or retire any of its capital stock at any time outstanding,
except (a) that any Subsidiary may declare and pay dividends or make
distributions to a Wholly-Owned Subsidiary, and (b) beginning with its 1999
Fiscal Year, Group may declare and pay dividends in an aggregate amount not to
exceed, in any Fiscal Year, the lesser of $2,000,000 and 25% of Group's
Consolidated Net Income for the prior Fiscal Year, so long as (i) at the time of
any such declaration or payment the Aggregate Commitment is less than
$50,000,000 and (ii) no Default or Unmatured Default has occurred and is
continuing or would occur after giving effect thereto (determined, in respect of
the covenants set forth in SECTION 6.19, on a pro forma basis as of the last day
of the most recent Fiscal Quarter for which financial statements are available).
6.11. INDEBTEDNESS. Neither Borrower will, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(a) the Loans;
(b) Indebtedness existing on the Initial Closing Date and described in
SCHEDULE 5.28 and refinancings thereof or amendments or modifications
thereto which do not have the effect of increasing the principal amount
thereof or changing the amortization thereof (other than to extend the
same) and which are otherwise on terms and conditions no less favorable to
either Borrower, any Subsidiary, the Agent or any Lender than the terms of
the Indebtedness being refinanced, amended or modified;
(c) Indebtedness arising under Rate Hedging Agreements related to the
Loans;
(d) Contingent Obligations permitted pursuant to SECTION 6.18(A), (B),
(C) or (D);
(e) Indebtedness owing by Group to any Wholly-Owned Subsidiary or by
any Wholly-Owned Subsidiary to Group or any other Wholly-Owned Subsidiary,
to the extent such Indebtedness constitutes an Investment permitted under
SECTION 6.14;
(f) a Capitalized Lease by Group or any Subsidiary of computer
equipment in an aggregate principal amount not to exceed $4,000,000 at any
one time outstanding; and
(g) additional Indebtedness with an aggregate principal outstanding
not in excess of $10,000,000, of which not more than $5,000,000 may consist
of obligations for borrowed money.
6.12. MERGER. Neither Borrower will, nor will it permit any Subsidiary to,
merge or consolidate with or into any other Person, except that (a) a Subsidiary
may merge into Holdings or a Wholly-Owned Subsidiary, (b) Holdings may merge
into Group and (c) Group may merge or consolidate with another Person so long as
(i) the surviving or successor corporation is organized under the laws of any
state of the United States and assumes the Obligations by written instrument
acceptable in form and substance to the Agent and each Lender, (ii) no Default
or Unmatured Default has occurred and is continuing or would occur after giving
effect thereto (determined with respect to the covenants set forth in SECTION
6.19 on a pro forma basis as of the last day of the most recent Fiscal Quarter
for which financial statements are available) and the Borrowers deliver pro
forma financial statements, reasonably satisfactory to Agent and Lenders, for
the next four Fiscal Quarters demonstrating such compliance, and (iii) unless
Group is the surviving corporation, each Lender has given its prior written
consent to such transaction, which consent shall not unreasonably be withheld.
6.13. SALE OF ASSETS. Neither Borrower will, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property to any other
Person, except:
(a) sales of Investments in the ordinary course of business by
Insurance Subsidiaries;
(b) leases, sales or other dispositions by Group to any Wholly-Owned
Subsidiary or by any Subsidiary to Group or any Wholly-Owned Subsidiary to
the extent permitted under SECTION 6.14;
(c) sales and other dispositions of obsolete equipment in the ordinary
course of business to the extent the proceeds thereof are used to replace
such disposed equipment; and
(d) leases, sales or other dispositions of its Property that, together
with all other Property of Holdings and its Subsidiaries previously leased,
sold or disposed of (other than Investments sold in the ordinary course of
business by Insurance Subsidiaries) as permitted by this SECTION 6.13(D)
since the Initial Closing Date, do not constitute a Substantial Portion of
the Property of Group and its Subsidiaries.
6.14. INVESTMENTS AND ACQUISITIONS . (a) Group will not, nor will it permit
any Subsidiary which is not an Insurance Subsidiary to, make or suffer to exist
any Investments (including, without limitation, loans and advances to, and other
Investments in, Subsidiaries), or commitments therefor, or to create any
Subsidiary or to become or remain a partner in any partnership or joint venture,
or to make any Acquisition of any Person, except:
(i) Cash and Cash Equivalent Investments;
(ii) Investments in existence on the Initial Closing Date
(including Investments in Subsidiaries) and, to the extent they
consist of loans, refinancings thereof or amendments or modifications
thereof which do not have the effect of increasing the principal
amount thereof or changing the amortization thereof (other than to
extend the same) and which are otherwise on terms and conditions no
less favorable to either Borrower, any Subsidiary, the Agent or any
Lender than the terms of the Investment being refinanced, amended or
modified;
(iii) Other Investments in Subsidiaries in existence as of the
Initial Closing Date so long as no Default or Unmatured Default has
occurred and is continuing either before or after giving effect
thereto (determined, in respect of the covenants set forth in SECTION
6.19, on a pro forma basis as of the last day of the most recent
Fiscal Quarter for which financial statements are available);
(iv) Acquisitions of businesses or entities engaged in the life,
accident and health insurance business (other than assets or stock of
any member of the UWS Group) which do not constitute hostile takeovers
(and Investments in Subsidiaries formed to Acquire such businesses or
Acquired after the date of this Agreement) made (A) for consideration
consisting of Group's capital stock not to exceed $75,000,000 in the
aggregate after the Initial Closing Date (measured by reference to the
market value of such stock as of the consummation of such Acquisition)
or (B) for other types of consideration not to exceed (x) $25,000,000
in the aggregate after the Initial Closing Date (including the amount
of any consideration other than Group's capital stock paid in
connection with Acquisitions made pursuant to clause (A)), less (y)
the aggregate consideration paid in respect of any Acquisitions made
pursuant to SECTION 6.14(B)(VI); and
(v) Up to $5,000,000 in the aggregate at any time outstanding of
other Investments (other than Investments in any member of the UWS
Group) which do not constitute Acquisitions.
(b) Group will not permit any Insurance Subsidiary to make or suffer
to exist any Investments (including, without limitation, loans and advances
to and other Investments in, Subsidiaries), or commitments therefor, or to
create any Subsidiary or to become or remain a partner in any partnership
or joint venture, or to make any Acquisition of any Person, except:
(i) Cash and Cash Equivalent Investments;
(ii) Investments in debt securities rated BBB- or better by S&P,
Baa-3 or better by Xxxxx'x or NAIC-2 or better by the NAIC; PROVIDED,
that any such Investment which, at any time after which it is made,
ceases to meet such rating requirements (A) shall cease to be
permitted hereby if then permitted by SECTION 6.14(B)(III) and (B) if
not then permitted by SECTION 6.14(B)(III) shall remain permitted
hereby until the earlier of the time it is permitted under SECTION
6.14(B)(III) and the date which is 30 days after the date on which
such rating requirement is no longer met;
(iii) Other Investments of a quality acceptable to the insurance
commissioner in the respective domiciliary state of such Insurance
Subsidiary not otherwise permitted under this SECTION 6.14(B);
PROVIDED, that such Investments of (A) each such Insurance Subsidiary
that is a Material Insurance Subsidiary do not exceed, in the
aggregate at any one time outstanding, 20% of the Statutory Capital
and Surplus of such Material Insurance Subsidiary or (B) all other
Insurance Subsidiaries as a group, if such other Insurance
Subsidiaries have an aggregate Statutory Capital and Surplus in excess
of $5,000,000, do not exceed 20% of such aggregate Statutory Capital
and Surplus; PROVIDED, FURTHER, that such Investments shall not
include Investments in any member of the UWS Group;
(iv) Existing Investments in Subsidiaries and other Investments
in existence on the Initial Closing Date and, to the extent they
consist of loans, refinancings thereof or amendments or modifications
thereto which do not have the effect of increasing the principal
amount thereof or changing the amortization thereof (other than to
extend the same) and which are otherwise or terms and conditions no
less favorable to either Borrower, any Subsidiary, the Agent or any
Lender than the terms of the Investment being refinanced, amended or
modified;
(v) Acquisitions of blocks of insurance business, from Persons
other than any member of the UWS Group, through assumptive
reinsurance, co-insurance or indemnity reinsurance so long as any
consideration paid in connection therewith which does not constitute
premium sharing is otherwise permitted under clause (vi) below; and
(vi) Acquisitions of businesses or entities engaged in the life,
accident and health insurance business (other than assets or stock of
any member of the UWS Group) which do not constitute hostile takeovers
(and Investments in Subsidiaries formed to Acquire such businesses or
Acquired after the date of this Agreement), made after the Initial
Closing Date for an aggregate consideration not to exceed (A)
$25,000,000 (including the amount of any consideration paid in
connection with reinsurance transactions permitted pursuant to SECTION
6.14(B)(V)), less (B) the aggregate consideration paid in respect of
any Acquisitions made pursuant to SECTION 6.14(A)(IV)(B).
6.15. LIENS. Neither Borrower will, nor will it permit any Subsidiary to,
create, incur, or suffer to exist any Lien in, of or on the Property of Group or
any of its Subsidiaries, except:
(a) Liens for taxes, assessments or governmental charges or levies on
its Property if the same shall not at the time be delinquent or thereafter
can be paid without penalty, or are being contested in good faith and by
appropriate proceedings and for which adequate reserves in accordance with
Agreement Accounting Principles or SAP, as applicable, shall have been set
aside on its books.
(b) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than 60 days past due
or which are being contested in good faith by appropriate proceedings and
for which adequate reserves shall have been set aside on its books;
(c) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation;
(d) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do not
in any material way affect the marketability of the same or interfere with
the use thereof in the business of Group or its Subsidiaries;
(e) Deposits made by any Insurance Subsidiary with the insurance
regulatory authority in its jurisdiction of domicile or other statutory
Liens or Liens or claims imposed or required by applicable insurance law or
regulation against the assets of any Insurance Subsidiary, in each case in
favor of all policy holders of such Insurance Subsidiary and in the
ordinary course of such Insurance Subsidiary's business;
(f) Liens existing on the Initial Closing Date and described in
SCHEDULE 6.15;
(g) Liens securing the Indebtedness described in SECTION 6.11(F), so
long as such Liens extend only to the equipment leased thereunder; and
(h) other Liens securing Indebtedness or obligations in an aggregate
principal amount not in excess of $10,000,000 at any one time outstanding.
6.16. AFFILIATES . Neither Borrower will, nor will it permit any Subsidiary
to, enter into any transaction (including, without limitation, the purchase or
sale of any Property or service) with, or make any payment or transfer to, any
Affiliate except in the ordinary course of business and pursuant to the
reasonable requirements of such Borrower's or such Subsidiary's business and
upon fair and reasonable terms no less favorable to such Borrower or such
Subsidiary than such Borrower or such Subsidiary would obtain in a comparable
arms-length transaction, and except for a payment to UWS in an amount not to
exceed $2,500,000 to fund certain expenses related to the Distribution. For the
purposes of this SECTION 6.16, "Affiliate" shall include each member of the UWS
Group and each Affiliate thereof.
6.17. OTHER INDEBTEDNESS. Neither Borrower will, nor will it permit any
Subsidiary to, directly or indirectly voluntarily prepay, defease or in
substance defease, purchase, redeem, retire or otherwise acquire, any
Indebtedness prior to the date due (other than the Loans) while a Default or
Unmatured Default has occurred and is continuing or would occur after giving
effect thereto (determined, in respect of the covenants set forth in SECTION
6.19, on a pro forma basis as of the last day of the most recent Fiscal Quarter
for which financial statements are available).
6.18. CONTINGENT OBLIGATIONS . Neither Borrower will, nor will it permit
any Subsidiary to, make or suffer to exist any Contingent Obligation (including,
without limitation, any Contingent Obligation with respect to the obligations of
a Subsidiary), except (a) the Contingent Obligations described on SCHEDULE 6.18,
(b) Contingent Obligations in respect of insurance contracts or policies issued
in the ordinary course of business, (c) Contingent Obligations in respect of the
endorsement of instruments for deposit or collection in the ordinary course of
business, (d) Contingent Obligations in respect of the Indebtedness described in
SECTION 6.11(F), and (e) Contingent Obligations permitted under SECTION 6.11(G).
6.19. FINANCIAL COVENANTS.
6.19.1. INTEREST COVERAGE RATIO. Group will not permit its Interest
Coverage Ratio, determined as of the end of each Fiscal Quarter for the
period of four Fiscal Quarters ending on such date (to be annualized,
through June 30, 1999, in accordance with the definition thereof), to be
less than (a) 3.0 to 1.0 from the date of this Agreement through December
31, 1999, (b) 4.0 to 1.0 from January 1, 2000 through December 31, 2000 and
(c) 4.5 to 1.0 thereafter.
6.19.2. LEVERAGE RATIO. Group will not permit the ratio, determined as
of the end of each of Fiscal Quarter, of (a) Consolidated Indebtedness to
(b) Consolidated Total Capitalization, to be greater than 0.30 to 1.0.
6.19.3. TANGIBLE NET WORTH . Group will at all times maintain a
Consolidated Tangible Net Worth of not less than the sum of (a) the greater
of (i) $128,000,000 or (ii) 90% of Group's Consolidated Tangible Net Worth
on the date of the Distribution, after giving effect thereto, plus (b) 50%
of the positive Consolidated Net Income earned by Group in each Fiscal
Quarter ending after the date of the Distribution and on or prior to the
date of determination, plus (c) 50% of the Net Available Proceeds received
by Group or any Subsidiary from the issuance of equity securities after the
date of the Distribution.
6.19.4. RISK-BASED CAPITAL . At all times after the date hereof, Group
will cause each Material Insurance Subsidiary to maintain a ratio of (a)
Total Adjusted Capital (as defined in the Risk-Based Capital Act or in the
rules and procedures prescribed from time to time by the NAIC with respect
thereto) to (b) the Company Action Level RBC (as defined in the Risk-Based
Capital Act or in the rules and procedures prescribed from time to time by
the NAIC with respect thereto) of at least 150%.
6.20. YEAR 2000. Each Borrower will take and will cause each of its
Subsidiaries to take all such actions as are reasonably necessary to
successfully implement the Year 2000 Program and to assure that Year 2000 Issues
will not have a Material Adverse Effect. At the request of the Agent or any
Lender, each Borrower will provide a description of the Year 2000 Program,
together with any updates or progress reports with respect thereto.
6.21. REINSURANCE. Group will not permit any Insurance Subsidiary to (a)
enter into bulk reinsurance arrangements, including without limitation any bulk
financial reinsurance arrangements, or (b) enter into any other (or renew,
extend or materially modify any existing) reinsurance arrangements except in the
ordinary course of business (i) with reinsurers rated at least "A-" (at the time
such reinsurance arrangements are entered into) by A.M. Best & Co. or its
equivalent by another reputable rating agency or reinsurers whose obligations to
the Insurance Subsidiaries are secured by letters of credit or other collateral
reasonably acceptable to the Required Lenders or (ii) with other reinsurers so
long as the aggregate corresponding credits to reserves (page 3, lines 1, 2, 3
and 4 of the Annual Statement) of all Insurance Subsidiaries in respect of
reinsurance arrangements with all such other reinsurers does not exceed 3% of
the aggregate of such reserves of all Insurance Subsidiaries; PROVIDED, that
notwithstanding the foregoing, any Insurance Subsidiary may enter into any
reinsurance arrangement in order to effect the Acquisition of a block of
insurance business which is permitted under SECTION 6.14(B)(V).
6.22. TAX CONSOLIDATION . Neither Group nor any Subsidiary will (a) file or
consent to the filing of any consolidated, combined or unitary income tax return
with any Person other than Group and its Subsidiaries or (b) enter into any tax
sharing agreement or similar arrangement other than a tax sharing agreement
among Group and its Subsidiaries.
6.23. ERISA COMPLIANCE .
With respect to any Plan, neither Group nor any Subsidiary shall or shall
permit any other member of the Controlled Group to:
(a) engage in any "prohibited transaction" (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code) for which a civil penalty
pursuant to Section 502(i) of ERISA or a tax pursuant to Section 4975 of
the Code in excess of $250,000 for all Plans in the aggregate could
reasonably be expected to be imposed;
(b) permit an "accumulated funding deficiency" (as such term is
defined in Section 302 of ERISA) in excess of $250,000 for all Plans in the
aggregate to be incurred whether or not waived, or permit any Unfunded
Liability which could reasonably be expected to have a Material Adverse
Effect;
(c) permit the occurrence of any Reportable Event which could
reasonably be expected to result in liability (i) to Group or any
Subsidiary in excess of $250,000 for all Plans in the aggregate or (ii) to
any other member of the Controlled Group in an amount which could
reasonably be expected to have a Material Adverse Effect;
(d) fail to make any contribution or payment to any Multiemployer Plan
which any member of the Controlled Group may be required to make under any
agreement relating to such Multiemployer Plan or any law pertaining thereto
which results in or could result in a liability (i) of Group or any
Subsidiary in excess of $250,000 for all Plans in the aggregate or (ii) of
any other member of the Controlled Group which could reasonably be expected
to have a Material Adverse Effect; or
(e) permit the establishment or amendment of any Plan or cause or
permit any Plan to fail to comply with the applicable provisions of ERISA
and the Code, which establishment, amendment or failure could reasonably be
expected to result in liability to any member of the Controlled Group which
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
6.24. ENVIRONMENTAL MATTERS . Each Borrower shall and shall cause each of
its Subsidiaries to (a) at all times comply in all material respects with all
applicable environmental laws and (b) promptly take any and all necessary
remedial actions in response to the presence, storage, use, disposal,
transportation or release of any hazardous or toxic materials on, under or about
any real property owned, leased or operated by either Borrower or any of its
Subsidiaries.
6.25. CHANGE IN CORPORATE STRUCTURE; FISCAL YEAR . Neither Borrower shall,
nor shall it permit any Subsidiary to, (a) permit any amendment or modification
to be made to its certificate or articles of incorporation or by-laws which is
materially adverse to the interests of the Lenders (provided that each Borrower
shall notify the Agent of any other amendment or modification thereto as soon as
practicable thereafter) or (b) change its Fiscal Year to end on any date other
than December 31 of each year.
6.26. INCONSISTENT AGREEMENTS . Neither Borrower shall, nor shall it permit
any Subsidiary to, enter into any indenture, agreement, instrument or other
arrangement which, (a) directly or indirectly prohibits or restrains, or has the
effect of prohibiting or restraining, or imposes materially adverse conditions
upon, the incurrence of the Obligations, the granting of Liens to secure the
Obligations, the extension of the Guaranty, the amending of the Loan Documents,
or the ability of any Subsidiary to (i) pay dividends or make other
distributions on its capital stock, (ii) make loans or advances to either
Borrower or (iii) repay loans or advances from either Borrower or (b) contains
any provision which would be violated or breached by the making of Advances or
by the performance by Holdings or either Borrower of any of its obligations
under any Loan Document.
6.27. CAPITAL EXPENDITURES . Neither Borrower will, nor will it permit any
Subsidiary to, expend, or be committed to expend for Capital Expenditures
(including, without limitation, for the acquisition of fixed assets) in excess
of $10,000,000 in any Fiscal Year; PROVIDED, that any amount not used in any
Fiscal Year may be used in the next succeeding Fiscal Year; PROVIDED, FURTHER,
that permitted Capital Expenditures for each Fiscal Year shall first be applied
in such Fiscal Year to that year's permitted amount and then to any amount
carried over from the prior Fiscal Year.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall constitute
a Default:
7.1. Any representation or warranty made or deemed made by or on behalf of
Group or any of its Subsidiaries to the Lenders or the Agent under or in
connection with this Agreement, any Loan, or any certificate or information
delivered in connection with this Agreement or any other Loan Document shall be
materially false on the date as of which made.
7.2. Nonpayment of principal of any Loan when due, or nonpayment of
interest upon any Loan or of any facility fee or other obligations under any of
the Loan Documents within five days after the same becomes due.
7.3. The breach by either Borrower of any of the terms or provisions of
SECTION 6.2 or SECTIONS 6.10 through 6.27.
7.4. The breach by either Borrower (other than a breach which constitutes a
Default under another Section of this ARTICLE VII) of any of the terms or
provisions of this Agreement which is not remedied within twenty (20) days after
written notice from the Agent or any Lender.
7.5. Failure of Group or any of its Subsidiaries to pay when due any
Indebtedness aggregating in excess of $1,500,000 ("MATERIAL INDEBTEDNESS"); or
the default by Group or any of its Subsidiaries in the performance (beyond the
applicable grace period with respect thereto, if any) of any term, provision or
condition contained in any agreement under which any such Material Indebtedness
was created or is governed, or any other event shall occur or condition exist,
the effect of which default or event is to cause, or to permit the holder or
holders of such Material Indebtedness to cause, such Material Indebtedness to
become due prior to its stated maturity; or any Material Indebtedness of Group
or any of its Subsidiaries shall be declared to be due and payable or required
to be prepaid or repurchased (other than by a regularly scheduled payment) prior
to the stated maturity thereof; or Group or any of its Subsidiaries shall not
pay, or admit in writing its inability to pay, its debts generally as they
become due.
7.6. Group or any of its Subsidiaries shall (a) have an order for relief
entered with respect to it under the Federal bankruptcy laws as now or hereafter
in effect, (b) make an assignment for the benefit of creditors, (c) apply for,
seek, consent to, or acquiesce in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any Substantial
Portion of its Property, (d) institute any proceeding seeking an order for
relief under the Federal bankruptcy laws as now or hereafter in effect or
seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (e)
take any corporate or partnership action to authorize or effect any of the
foregoing actions set forth in this SECTION 7.6 or (f) fail to contest in good
faith any appointment or proceeding described in SECTION 7.7.
7.7. Without the application, approval or consent of Group or any of its
Subsidiaries, a receiver, trustee, examiner, liquidator or similar official
shall be appointed for Group or any of its Subsidiaries or any Substantial
Portion of its Property, or a proceeding described in SECTION 7.6(A) shall be
instituted against Group or any of its Subsidiaries and such appointment
continues undischarged or such proceeding continues undismissed or unstayed for
a period of 60 consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of, all or any portion of the
Property of Group or any of its Subsidiaries which, when taken together with all
other Property of Group and its Subsidiaries so condemned, seized, appropriated,
or taken custody or control of, during the twelve-month period ending with the
month in which any such action occurs, constitutes a Substantial Portion.
7.9. Group or any of its Subsidiaries shall fail within 45 days to pay,
bond or otherwise discharge any judgment or order for the payment of money in
excess of $250,000 (or multiple judgments or orders for the payment of an
aggregate amount in excess of $500,000), which is not stayed on appeal or
otherwise being appropriately contested in good faith and as to which no
enforcement actions have been commenced.
7.10. The Unfunded Liabilities of all Single Employer Plans shall exceed in
the aggregate $250,000 or any Reportable Event shall occur in connection with
any Plan.
7.11. Any Change in Control shall occur.
7.12. Nonpayment by either Borrower of any Rate Hedging Obligation owed to
any Lender when due or the breach by either Borrower of any term, provision or
condition contained in any agreement, device or arrangement giving rise to any
such Rate Hedging Obligation.
7.13 Any License of any Material Insurance Subsidiary issued in its state
of domicile or in a state in which its earned premiums in the prior Fiscal Year
constituted 2% or more of its aggregate earned premiums in such period (a) shall
be revoked by the Governmental Authority which issued such License, or any
formal action (administrative or judicial) to revoke such License shall have
been commenced against such Material Insurance Subsidiary and shall not have
been dismissed within 30 days after the commencement thereof, (b) shall be
suspended by such Governmental Authority for a period in excess of 30 days or
(c) shall not be reissued or renewed by such Governmental Authority upon the
expiration thereof following application for such reissuance or renewal of such
Material Insurance Subsidiary.
7.14 Any Insurance Subsidiary shall be the subject of a final
non-appealable order imposing a fine in an amount in excess of $500,000 in any
single instance or other such orders imposing fines in excess of $2,000,000 in
the aggregate after the date of this Agreement by or at the request of any state
insurance regulatory agency as a result of the violation by such Insurance
Subsidiary of such state's applicable insurance laws or the regulations
promulgated in connection therewith.
7.15 Any Insurance Subsidiary shall become subject to (a) any conservation
or liquidation order, directive or mandate issued by any Governmental Authority
or (b) any other directive or mandate issued by any Governmental Authority which
is materially adverse to such Insurance Subsidiary, which in either case is not
stayed within ten (10) days.
7.16 The Guaranty shall fail to remain in full force and effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of the Guaranty, or Holdings shall fail to comply with any of
the terms or provisions of the Guaranty or Holdings shall deny that it has any
further liability under the Guaranty or shall give notice to that effect.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. ACCELERATION. If any Default described in SECTION 7.6 or 7.7 occurs
with respect to either Borrower, the obligations of the Lenders to make Loans
hereunder shall automatically terminate and the Obligations shall immediately
become due and payable without any election or action on the part of the Agent
or any Lender. If any other Default occurs, the Required Lenders (or the Agent
with the consent of the Required Lenders) may terminate or suspend the
obligations of the Lenders to make Loans hereunder, or declare the Obligations
to be due and payable, or both, whereupon the Obligations shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which each Borrower hereby expressly waives.
If, within ten (10) Business Days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
SECTION 7.6 or 7.7 with respect to either Borrower) and before any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so direct, the
Agent shall, by notice to Holdings, rescind and annul such acceleration and/or
termination.
8.2. AMENDMENTS. Subject to the provisions of this ARTICLE VIII, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrowers may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrowers hereunder or waiving
any Default hereunder; PROVIDED, that no such supplemental agreement shall,
without the consent of all of the Lenders:
(a) Extend the final maturity of any Loan or forgive all or any
portion of the principal amount thereof, or reduce the rate or extend the
time of payment of interest or fees thereon;
(b) Reduce the percentage specified in the definition of Required
Lenders;
(c) Extend the Facility Termination Date, or reduce the amount or
extend the payment date for, the mandatory payments required under SECTION
2.2 or the mandatory commitment reductions required under SECTION 2.8, or
increase the amount of the Commitment of any Lender hereunder, or permit
either Borrower to assign its rights under this Agreement;
(d) Release Holdings from the Guaranty; or
(e) Amend this SECTION 8.2.
No amendment of any provision of this Agreement relating to the Agent shall
be effective without the written consent of the Agent. The Agent may waive
payment of the fee required under SECTION 12.3.2 without obtaining the consent
of any other party to this Agreement. No amendment, waiver or consent relating
to the Swing Line Lender shall be effective without the written consent of the
Swing Line Lender.
8.3. PRESERVATION OF RIGHTS. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
either Borrower to satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to SECTION 8.2, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid in
full.
ARTICLE IX
GENERAL PROVISIONS
9.1. SURVIVAL OF REPRESENTATIONS. All representations and warranties of the
Borrower contained in this Agreement shall survive the making of the Loans
herein contemplated.
9.2. GOVERNMENTAL REGULATION. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to
either Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3. HEADINGS. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
9.4. ENTIRE AGREEMENT. The Loan Documents embody the entire agreement and
understanding among the Borrowers, the Agent and the Lenders and supersede all
prior agreements and understandings among the Borrowers, the Agent and the
Lenders relating to the subject matter thereof other than the fee letter
described in SECTION 10.13.
9.5. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns; PROVIDED, that the parties hereto
expressly agree that the Arranger shall enjoy the benefits of the provisions of
SECTIONS 9.6, 9.10 and 10.11 to the extent specifically set forth therein and
shall have the right to enforce such provisions on its own behalf and in its own
name to the same extent as if it were a party to this Agreement.
9.6. EXPENSES; INDEMNIFICATION. (a) Each Borrower shall reimburse the Agent
and the Arranger for any costs, internal charges and out-of-pocket expenses
(including attorneys' fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent) paid or incurred by the Agent or the
Arranger in connection with the preparation, negotiation, execution, delivery,
syndication, review, amendment, modification, and administration of the Loan
Documents. Each Borrower also agrees to reimburse the Agent, the Arranger and
the Lenders for any costs, internal charges and out-of-pocket expenses
(including attorneys' fees and time charges of attorneys for the Agent, the
Arranger and the Lenders, which attorneys may be employees of the Agent, the
Arranger or the Lenders) paid or incurred by the Agent, the Arranger or any
Lender in connection with the collection and enforcement of the Loan Documents.
Expenses being reimbursed by the Borrowers under this Section include, without
limitation, costs and expenses incurred in connection with the Reports described
in the following sentence. Each Borrower acknowledges that from time to time
First Chicago may prepare and may distribute to the Lenders (but shall have no
obligation or duty to prepare or to distribute to the Lenders) certain audit
reports (the "REPORTS") pertaining to each Borrower's assets for internal use by
First Chicago from information furnished to it by or on behalf of such Borrower,
after First Chicago has exercised its rights of inspection pursuant to this
Agreement.
(b) Each Borrower hereby further agrees to indemnify the Agent, the
Arranger and each Lender and the directors, officers and employees of each
against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not the Agent, the Arranger or any Lender
is a party thereto) which any of them may pay or incur arising out of or
relating to this Agreement, the other Loan Documents, the Distribution, any
merger of Holdings with Group, the transactions contemplated hereby, the
other Closing Transactions or the direct or indirect application or
proposed application of the proceeds of any Loan hereunder except to the
extent that (i) they are determined in a final non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the party seeking indemnification or (ii) that
they arise solely from any dispute of or any litigation or other proceeding
instituted by any Lender against the Agent (if the Agent was determined to
have breached its obligations to such Lender hereunder) or (for Persons
other than the Agent and its directors, officers and employees) any other
Lender. The obligations of each Borrower under this SECTION 9.6 shall
survive the termination of this Agreement.
9.7. NUMBERS OF DOCUMENTS. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to each of the Lenders.
9.8. ACCOUNTING. Except as provided to the contrary herein, all accounting
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with Agreement Accounting Principles.
9.9. SEVERABILITY OF PROVISIONS. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.10. NONLIABILITY OF LENDERS. The relationship between the Borrowers on
the one hand and the Lenders and the Agent on the other hand shall be solely
that of borrower and lender. Neither the Agent, the Arranger nor any Lender
shall have any fiduciary responsibilities to either Borrower. Neither the Agent,
the Arranger nor any Lender undertakes any responsibility to either Borrower to
review or inform such Borrower of any matter in connection with any phase of
such Borrower's business or operations. Each Borrower agrees that neither the
Agent, the Arranger nor any Lender shall have liability to such Borrower
(whether sounding in tort, contract or otherwise) for losses suffered by such
Borrower in connection with, arising out of, or in any way related to, the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. Neither the
Agent, the Arranger nor any Lender shall have any liability with respect to, and
each Borrower hereby waives, releases and agrees not to xxx for, any special,
indirect or consequential damages suffered by such Borrower in connection with,
arising out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.
9.11. CONFIDENTIALITY. Each of the Agent and each Lender agrees to hold any
confidential information which it may receive from either Borrower pursuant to
this Agreement in confidence, except for disclosure (a) to its Affiliates and to
other Lenders and their respective Affiliates, (b) to legal counsel,
accountants, and other professional advisors to that Lender or to a Transferee,
(c) to regulatory officials, (d) to any Person as requested pursuant to or as
required by law, regulation, or legal process, provided that if not prohibited
by law, the Agent or such Lender will use reasonable efforts to provide notice
to the Borrowers of the requested disclosure and give the Borrowers a reasonable
opportunity to seek a protective order with respect to such information prior to
delivering confidential information in response thereto, (e) to any Person in
connection with any legal proceeding to which that Lender is a party, to the
extent reasonably necessary, and (f) permitted by SECTION 12.4.
9.12. NONRELIANCE. Each Lender hereby represents that it is not relying on
or looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Loans provided
for herein.
9.13. DISCLOSURE. Each Borrower and each Lender hereby (a) acknowledge and
agree that First Chicago and/or its Affiliates from time to time may make other
loans to or have other relationships with the Borrowers, and (b) waive any
liability of First Chicago or such Affiliate to either Borrower or any Lender,
respectively, arising out of or resulting from such loans or relationships other
than liabilities arising out of the gross negligence or willful misconduct of
First Chicago or its Affiliates.
ARTICLE X
THE AGENT
10.1. APPOINTMENT; NATURE OF RELATIONSHIP. The First National Bank of
Chicago is hereby appointed by each of the Lenders as its contractual
representative (herein referred to as the "AGENT") hereunder and under each
other Loan Document, and each of the Lenders irrevocably authorizes the Agent to
act as the contractual representative of such Lender with the rights and duties
expressly set forth herein and in the other Loan Documents. The Agent agrees to
act as such contractual representative upon the express conditions contained in
this ARTICLE X. Notwithstanding the use of the defined term "Agent," it is
expressly understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (a) does not hereby assume any fiduciary
duties to any of the Lenders, (b) is a "representative" of the Lenders within
the meaning of Section 9-105 of the Uniform Commercial Code and (c) is acting as
an independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders hereby agrees to assert no claim against the Agent on any agency theory
or any other theory of liability for breach of fiduciary duty, all of which
claims each Lender hereby waives.
10.2. POWERS. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder, except any action specifically provided
by the Loan Documents to be taken by the Agent.
10.3. GENERAL IMMUNITY. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to either Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. Neither the Agent nor any
of its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into, or verify (a) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in ARTICLE IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of Group or of either
Borrower or of any of such Borrower's Subsidiaries. The Agent shall have no duty
to disclose to the Lenders information that is not required to be furnished by
either Borrower to the Agent at such time, but is voluntarily furnished by such
Borrower to the Agent (either in its capacity as Agent or in its individual
capacity).
10.5. ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6. EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any of its
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7. RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (a) for any amounts not
reimbursed by the Borrowers for which the Agent is entitled to reimbursement by
the Borrowers under the Loan Documents, (b) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by the Agent in
connection with any dispute between the Agent and any Lender or between two or
more of the Lenders) and (c) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of the Loan Documents or
any other document delivered in connection therewith or the transactions
contemplated thereby (including, without limitation, for any such amounts
incurred by or asserted against the Agent in connection with any dispute between
the Agent and any Lender or between two or more of the Lenders), or the
enforcement of any of the terms of the Loan Documents or of any such other
documents; PROVIDED, that no Lender shall be liable for any of the foregoing to
the extent any of the foregoing is found in a final non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the Agent. The obligations of the Lenders under this
SECTION 10.8 shall survive payment of the Obligations and termination of this
Agreement.
10.9. NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Unmatured Default hereunder unless
the Agent has received written notice from a Lender or either Borrower referring
to this Agreement describing such Default or Unmatured Default and stating that
such notice is a "notice of default". In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Lenders.
10.10. RIGHTS AS A LENDER. In the event the Agent is a Lender, the Agent
shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with Group, Holdings
or any of Holdings' Subsidiaries in which Group, Holdings or such Subsidiary is
not restricted hereby from engaging with any other Person. The Agent, in its
individual capacity, is not obligated to remain a Lender.
10.11. LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrowers and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger 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 and the other Loan Documents.
10.12. SUCCESSOR AGENT. The Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrowers, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrowers and the Lenders, a successor Agent. If no successor
Agent shall have been so appointed by the Required Lenders within thirty days
after the resigning Agent's giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of the Borrowers and the Lenders, a
successor Agent. Notwithstanding the previous sentence, the Agent may at any
time without the consent of either Borrower or any Lender, appoint any of its
Affiliates which is a commercial bank as a successor Agent hereunder. If the
Agent has resigned or been removed and no successor Agent has been appointed,
the Lenders may perform all the duties of the Agent hereunder and the Borrowers
shall make all payments in respect of the Obligations to the applicable Lender
and for all other purposes shall deal directly with the Lenders. No successor
Agent shall be deemed to be appointed hereunder until such successor Agent has
accepted the appointment. Any such successor Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this ARTICLE X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or the
Agent assigns its duties and obligations to an Affiliate pursuant to this
SECTION 10.12, then the term "Corporate Base Rate" as used in this Agreement
shall mean the prime rate, base rate or other analogous rate of the new Agent.
10.13. AGENT'S FEE . The Borrowers agree, on a joint and several basis, to
pay to the Agent, for its own account, the fees agreed to by the Borrowers and
the Agent pursuant to that certain fee letter agreement dated October 15, 1998,
or as otherwise agreed from time to time.
10.14. DELEGATION TO AFFILIATES . The Borrowers and the Lenders agree that
the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under ARTICLES IX and X.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. SETOFF . In addition to, and without limitation of, any rights of the
Lenders under applicable law, if either Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of such Borrower may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part thereof, shall then be due.
11.2. RATABLE PAYMENTS . If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
SECTION 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made. If an
amount to be setoff is to be applied to Indebtedness of either Borrower to a
Lender other than Indebtedness comprised of Loans made by such Lender, such
amount shall be applied ratably to such other Indebtedness and to the
Indebtedness comprised of the Loans.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. SUCCESSORS AND ASSIGNS . The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrowers and
the Lenders and their respective successors and assigns, except that (a) neither
Borrower shall have the right to assign its rights or obligations under the Loan
Documents and (b) any assignment by any Lender must be made in compliance with
SECTION 12.3. Notwithstanding clause (b) of this Section, any Lender may at any
time, without the consent of either Borrower or the Agent, assign all or any
portion of its rights under this Agreement and any Note to a Federal Reserve
Bank; PROVIDED, that no such assignment to a Federal Reserve Bank shall release
the transferor Lender from its obligations hereunder. The Agent may treat the
Person which made any Loan or which holds any Note as the owner thereof for all
purposes hereof unless and until such Person complies with SECTION 12.3 in the
case of an assignment thereof or, in the case of any other transfer, a written
notice of the transfer is filed with the Agent. Any assignee or transferee of
the rights to any Loan or any Note agrees by acceptance of such transfer or
assignment to be bound by all the terms and provisions of the Loan Documents.
Any request, authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the owner of the rights to any
Loan (whether or not a Note has been issued in evidence thereof), shall be
conclusive and binding on any subsequent holder, transferee or assignee of the
rights to such Loan.
12.2. PARTICIPATIONS .
12.2.1. PERMITTED PARTICIPANTS; EFFECT . Any Lender may, in the
ordinary course of its business and in accordance with applicable law, at
any time sell to one or more banks or other entities ("PARTICIPANTS")
participating interests in any Loan owing to such Lender, any Note held by
such Lender, any Commitment of such Lender or any other interest of such
Lender under the Loan Documents. In the event of any such sale by a Lender
of participating interests to a Participant, such Lender's obligations
under the Loan Documents shall remain unchanged, such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the owner of its Loans and the holder
of any Note issued to it in evidence thereof for all purposes under the
Loan Documents, all amounts payable by the Borrowers under this Agreement
shall be determined as if such Lender had not sold such participating
interests, and the Borrowers and the Agent shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under the Loan Documents.
12.2.2. VOTING RIGHTS . Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which forgives
principal, interest or fees or reduces the interest rate or fees payable
with respect to any such Loan or Commitment, extends the Facility
Termination Date, postpones any date fixed for any regularly-scheduled
payment of principal of, or interest or fees on, any such Loan or
Commitment, releases any guarantor of any such Loan or releases all or
substantially all of the collateral, if any, securing any such Loan.
12.2.3. BENEFIT OF SETOFF . Each Borrower agrees that each Participant
shall be deemed to have the right of setoff provided in SECTION 11.1 in
respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under the Loan Documents, provided
that each Lender shall retain the right of setoff provided in SECTION 11.1
with respect to the amount of participating interests sold to each
Participant. The Lenders agree to share with each Participant, and each
Participant, by exercising the right of setoff provided in SECTION 11.1,
agrees to share with each Lender, any amount received pursuant to the
exercise of its right of setoff, such amounts to be shared in accordance
with SECTION 11.2 as if each Participant were a Lender.
12.3. ASSIGNMENTS .
12.3.1. Permitted Assignments . Any Lender may, in the ordinary course
of its business and in accordance with applicable law, at any time assign
to one or more banks or other entities ("PURCHASERS") all or any part of
its rights and obligations under the Loan Documents. Such assignment shall
be substantially in the form of EXHIBIT B or in such other form as may be
agreed to by the parties thereto. The consent of Group, the Swing Line
Lender and the Agent shall be required prior to an assignment becoming
effective with respect to a Purchaser which is not a Lender or an Affiliate
thereof; PROVIDED, that if a Default has occurred and is continuing, the
consent of Group shall not be required. Such consent shall not be
unreasonably withheld or delayed. Each such assignment shall (unless (x)
each of Group and the Agent otherwise consents or (y) the proposed
Purchaser is already a Lender) be in an amount not less than the lesser of
(a) $5,000,000 or (b) the remaining amount of the assigning Lender's
Commitment (calculated as at the date of such assignment).
12.3.2. EFFECT; EFFECTIVE DATE. Upon (a) delivery to the Agent of a
notice of assignment, substantially in the form attached as Exhibit I to
EXHIBIT B (a "NOTICE OF ASSIGNMENT"), together with any consents required
by SECTION 12.3.1, and (b) payment of a $3,500 fee to the Agent for
processing such assignment, such assignment shall become effective on the
effective date specified in such Notice of Assignment. The Notice of
Assignment shall contain a representation by the Purchaser to the effect
that none of the consideration used to make the purchase of the Commitment
and Loans under the applicable assignment agreement are "plan assets" as
defined under ERISA and that the rights and interests of the Purchaser in
and under the Loan Documents will not be "plan assets" under ERISA. On and
after the effective date of such assignment, such Purchaser shall for all
purposes be a Lender party to this Agreement and any other Loan Document
executed by or on behalf of the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same extent as if
it were an original party hereto, and no further consent or action by
either Borrower, the Lenders or the Agent shall be required to release the
transferor Lender with respect to the percentage of the Aggregate
Commitment and Loans assigned to such Purchaser. Upon the consummation of
any assignment to a Purchaser pursuant to this SECTION 12.3.2, the
transferor Lender, the Agent and the Borrowers shall, if the transferor
Lender or the Purchaser desires that its Loans be evidenced by Notes, make
appropriate arrangements so that new Notes or, as appropriate, replacement
Notes are issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Purchaser, in each case
in principal amounts reflecting their respective Commitments, as adjusted
pursuant to such assignment.
12.4. DISSEMINATION OF INFORMATION . Each Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "TRANSFEREE") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of Group or Holdings and the Subsidiaries,
including without limitation any information contained in any Reports; PROVIDED,
that each Transferee and prospective Transferee agrees to be bound by SECTION
9.11 of this Agreement.
12.5. TAX TREATMENT . If any interest in any Loan Document is transferred
to any Transferee which is organized under the laws of any jurisdiction other
than the United States or any State thereof, the transferor Lender shall cause
such Transferee, concurrently with the effectiveness of such transfer, to comply
with the provisions of SECTION 3.5(D).
ARTICLE XIII
NOTICES
13.1. NOTICES . Except as otherwise permitted by SECTION 2.17 with respect
to borrowing notices, all notices, requests and other communications to any
party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
at its address or facsimile number set forth on the signature pages hereof, or
(y) at such other address or facsimile number as such party may hereafter
specify for the purpose by notice to the Agent and the Borrowers in accordance
with the provisions of this SECTION 13.1. Each such notice, request or other
communication shall be effective (a) if given by facsimile transmission, when
transmitted to the facsimile number specified in this Section and confirmation
of receipt is received, (b) if given by mail, 72 hours after such communication
is deposited in the mail with first class postage prepaid, addressed as
aforesaid, or (c) if given by any other means, when delivered (or, in the case
of electronic transmission, received) at the address specified in this Section;
PROVIDED, that notices to the Agent under ARTICLE II shall not be effective
until received.
13.2. CHANGE OF ADDRESS . Each Borrower, the Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by each Borrower, the Agent and the Lenders
and each party has notified the Agent by facsimile transmission or telephone
that it has taken such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW . THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2. CONSENT TO JURISDICTION . EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND EACH BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST EITHER
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
EITHER BORROWER AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR
ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A
COURT IN CHICAGO, ILLINOIS.
15.3. WAIVER OF JURY TRIAL . EACH BORROWER, THE AGENT AND EACH LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
ARTICLE XVI
GUARANTY OF GROUP
16.1 For valuable consideration, the receipt of which is hereby
acknowledged, and to induce the Swing Line Lender to make Swing Line Loans to
UWLIC as a Borrower, Group hereby absolutely, irrevocably and unconditionally
guarantees prompt, full and complete payment when due, whether at stated
maturity, upon acceleration or otherwise, and at all times thereafter, of any
and all existing and future obligations of UWLIC to the Agent, the Lenders and
any holder of a Note, a Swing Line Loan, or any other Obligation under or with
respect to the Loan Documents, whether for principal, interest, fees, expenses
or otherwise (collectively, the "GUARANTEED OBLIGATIONS").
16.2 Group waives notice of the acceptance of this guaranty and of the
extension, incurrence or continuation of the Guaranteed Obligations or any part
thereof. Group further waives all setoffs and counterclaims and presentment,
protest, notice of notices delivered or demand made on UWLIC (except for any
notice of demand or acceleration under SECTION 8.1), filing of claims with a
court in the event of receivership, bankruptcy or reorganization of UWLIC or
action or delinquency in respect of the Guaranteed Obligations or any part
thereof, including any right to require the Agent and the Lenders to xxx UWLIC,
any other guarantor or any other Person obligated with respect to the Guaranteed
Obligations or any part thereof, or otherwise to enforce payment thereof against
any collateral securing the Guaranteed Obligations or any part thereof;
PROVIDED, that if at any time any payment of any portion of the Guaranteed
Obligations is rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy or reorganization of UWLIC or otherwise, Group's
obligations hereunder with respect to such payment shall be reinstated at such
time as though such payment had not been made. Credit may be granted or
continued to UWLIC by the Lenders without notice to or authorization from Group
regardless of UWLIC's financial or other condition at the time of such grant or
continuation. The Agent and the Lenders shall have no obligation to disclose or
discuss with Group their assessments of the financial condition of UWLIC.
16.3 Group hereby agrees that, to the fullest extent permitted by law, its
obligations hereunder shall be continuing, absolute and unconditional under any
and all circumstances and not subject to any reduction, limitation, impairment,
termination, defense (other than indefeasible payment in full), setoff,
counterclaim or recoupment whatsoever (all of which are hereby expressly waived
by it to the fullest extent permitted by law), whether by reason of any claim of
any character whatsoever, including, without limitation, any claim of waiver,
release, surrender, alteration or compromise. This guaranty is a guaranty of
payment and not of collection, is a primary obligation of Group and not one of
surety, The validity and enforceability of this guaranty shall not be impaired
or affected by any of the following: (a) any extension, modification or renewal
of, or indulgence with respect to, or substitutions for, the Guaranteed
Obligations or any part thereof or any agreement relating thereto at any time;
(b) any failure or omission to enforce any right, power or remedy with respect
to the Guaranteed Obligations or any part thereof or any agreement relating
thereto, or any collateral; (c) any waiver of any right, power or remedy or of
any default with respect to the Guaranteed Obligations or any part thereof or
any agreement relating thereto or with respect to any collateral; (d) any
release, surrender, compromise, settlement, waiver, subordination or
modification, with or without consideration, of any collateral, any other
guaranties with respect to the Guaranteed Obligations or any part thereof, or
any other obligation of any Person with respect to the Guaranteed Obligations or
any part thereof; (e) the enforceability or validity of the Guaranteed
Obligations or any part thereof or the genuineness, enforceability or validity
of any agreement relating thereto or with respect to any collateral; (f) the
application of payments received from any source to the payment of obligations
other than the Guaranteed Obligations, any part thereof or amounts which are not
covered by this guaranty even though the Agent and the Lenders might lawfully
have elected to apply such payments to any part or all of the Guaranteed
Obligations or to amounts which are not covered by this guaranty; (g) any change
in the ownership of UWLIC or the insolvency, bankruptcy or any other change in
the legal status of UWLIC; (h) any change in or the imposition of any law,
decree, regulation or other governmental act which does or might impair, delay
or in any way affect the validity, enforceability or the payment when due of the
Guaranteed Obligations; (i) the failure of Group or UWLIC to maintain in full
force, validity or effect or to obtain or renew when required all governmental
and other approvals, licenses or consents required in connection with the
Guaranteed Obligations or this guaranty, or to take any other action required in
connection with the performance of all obligations pursuant to the Guaranteed
Obligations or this guaranty; (j) the existence of any claim, setoff or other
rights which Group may have at any time against UWLIC, or any other Person in
connection herewith or with an unrelated transaction; (k) the Lenders' election,
in any case or proceeding instituted under chapter 11 of the United States
Bankruptcy Code, of the application of Section 1111(b)(2) of the United States
Bankruptcy Code; (l) any borrowing, use of cash collateral, or grant of a
security interest by UWLIC, as debtor in possession, under Section 363 or 364 of
the United States Bankruptcy Code; (m) the disallowance of all or any portion of
any of the Lenders' claims for repayment of the Guaranteed Obligations under
Section 502 or 506 of the United States Bankruptcy Code; or (n) any other
circumstances, whether or not similar to any of the foregoing, which could
constitute a defense to a guarantor; all whether or not Group shall have had
notice or knowledge of any act or omission referred to in the foregoing clauses
(a) through (n) of this paragraph. It is agreed that Group's liability hereunder
is several and independent of any other guaranties or other obligations at any
time in effect with respect to the Guaranteed Obligations or any part thereof
and that Group's liability hereunder may be enforced regardless of the
existence, validity, enforcement or non-enforcement of any such other guaranties
or other obligations or any provision of any applicable law or regulation
purporting to prohibit payment by UWLIC of the Guaranteed Obligations in the
manner agreed upon between UWLIC and the Agent and the Lenders.
16.4 Group authorizes the Lenders to take any action or exercise any remedy
with respect to any collateral from time to time securing the Guaranteed
Obligations, which the Lenders in their sole discretion shall determine, without
notice to Group. Notwithstanding any reference herein to any collateral securing
any of the Guaranteed Obligations, it is acknowledged that, on the date hereof,
neither Group nor any of its Subsidiaries has granted, or has any obligation to
grant, any security interest in or other lien on any of its property as security
for the Guaranteed Obligations.
16.5 In the event the Lenders in their sole discretion elect to give notice
of any action with respect to any collateral securing the Guaranteed Obligations
or any part thereof, ten (10) days' prior written notice to Group at the address
as provided in ARTICLE XIII shall be deemed reasonable notice of any matters
contained in such notice. Group consents and agrees that neither the Agent nor
the Lenders shall be under any obligation to xxxxxxxx any assets in favor of
Group or against or in payment of any or all of the Guaranteed Obligations.
16.6 In the event that acceleration of the time for payment of any of the
Guaranteed Obligations is stayed upon the insolvency, bankruptcy or
reorganization of UWLIC, or otherwise, all such amounts shall nonetheless be
payable by Group forthwith upon demand by the Agent or the Lenders. Group
further agrees that, to the extent that UWLIC makes a payment or payments to any
of the Lenders on the Guaranteed Obligations, or the Agent or the Lenders
receive any proceeds of collateral securing the Guaranteed Obligations, which
payment or receipt of proceeds or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be returned
or repaid to UWLIC, its estate, trustee, receiver, debtor in possession or any
other party, including, without limitation, Group, under any insolvency or
bankruptcy law, state or federal law, common law or equitable cause, then to the
extent of such payment, return or repayment, the obligation or part thereof
which has been paid, reduced or satisfied by such amount shall be reinstated and
continued in full force and effect as of the date when such initial payment,
reduction or satisfaction occurred.
16.7 Group agrees that, as between Group on the one hand, and the Lenders
and the Agent, on the other hand, the obligations of UWLIC guaranteed under this
ARTICLE XVI may be declared to be forthwith due and payable, or may be deemed
automatically to have been accelerated, as provided in SECTION 8.1 hereof for
purposes of this ARTICLE XVI, notwithstanding any stay, injunction or other
prohibition (whether in a bankruptcy proceeding affecting UWLIC or otherwise)
preventing such declaration as against UWLIC and that, in the event of such
declaration or automatic acceleration, such obligations (whether or not due and
payable by UWLIC) shall forthwith become due and payable by Group for purposes
of this ARTICLE XVI.
16.8 No delay on the part of the Agent or the Lenders in the exercise of
any right, power or remedy shall preclude any further exercise thereof; nor
shall any amendment, supplement, modification or waiver of any of the terms or
provisions of this guaranty be binding upon the Agent or the Lenders, except as
expressly set forth in a writing duly signed and delivered on the Lenders'
behalf by the Agent. The failure by the Agent or the Lenders at any time or
times hereafter to require strict provisions, warranties, terms and conditions
contained in any promissory note, security agreement, agreement, guaranty,
instrument or document now or at any time or times hereafter executed pursuant
to the terms of, or in connection herewith, by UWLIC or Group and delivered to
the Agent or the Lenders shall not waive, affect or diminish any right of the
Agent or the Lenders at any time or times hereafter to demand strict performance
thereof, and such right shall not be deemed to have been waived by any act or
knowledge of the Agent or the Lenders, or their agents, officers or employees,
unless such waiver is contained in an instrument in writing duly signed and
delivered on the Lenders' behalf by the Agent. No waiver by the Agent or the
Lenders of any default shall operate as a waiver of any other default or the
same default on a future occasion, and no action by the Agent or the Lenders
permitted hereunder shall in any way affect or impair the Agent's or the
Lenders' rights or powers, or the obligations of Group under this guaranty. Any
determination by a court of competent jurisdiction of the amount of any
Guaranteed Obligations owing by UWLIC to the Lenders shall be conclusive and
binding on Group irrespective of whether Group was a party to the suit or action
in which such determination was made.
16.9 In addition to and without limitation of any rights, powers or
remedies of the Agent or the Lenders under applicable law, any time after
maturity of the Guaranteed Obligations, whether by acceleration or otherwise,
the Agent or the Lenders may, in its or their sole discretion, with notice after
the fact to Group and regardless of the acceptance of any security or collateral
for the payment hereof, appropriate and apply toward the payment of the
Guaranteed Obligations (a) any indebtedness due or to become due from any of the
Lenders to Group, and (b) any moneys, credits or other property belonging to
Group (including all account balances, whether provisional or final and whether
or not collected or available) at any time held by or coming into the possession
of any of the Agent or any Lender whether for deposit or otherwise.
16.10 This guaranty shall bind Group and its successors and assigns and
shall inure to the benefit of the Agent, the Lenders and their successors and
assigns. All references herein to UWLIC shall be deemed to include its
successors and assigns including, without limitation, a receiver, trustee or
debtor in possession of or for UWLIC.
16.11 It is understood that while the amount of the Guaranteed Obligations
guaranteed hereby is not limited, if in any action or proceeding involving any
state, federal or foreign bankruptcy, insolvency or other law affecting the
rights or creditors generally, this guaranty would be held or determined to be
void, invalid or unenforceable on account of the amount of the aggregate
liability under this guaranty, then, notwithstanding any other provision of this
guaranty to the contrary, the aggregate amount of such liability shall, without
any further action of the Agent, the Lenders or any other Person, be
automatically limited and reduced to the highest amount which is valid and
enforceable as determined in such action or proceeding.
16.12 This guaranty shall continue in effect until the date on which all of
the Guaranteed Obligations have been paid in full.
[signature pages to follow]
IN WITNESS WHEREOF, the Borrowers, the Lenders and the Agent have executed
this Agreement as of the date first above written.
AMERICAN MEDICAL SECURITY
GROUP, INC.
By: /S/ XXXX X. XXXXXXXXXX
-------------------------------
Title: Executive Vice President, Chief
Financial Officer and Treasurer
Address: 0000 XXX Xxxxxxxxx
Xxxxx Xxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
UNITED WISCONSIN LIFE INSURANCE COMPANY
By: /S/ XXXX X. XXXXXXXXXX
-------------------------------
Title: Vice President and Treasurer
Address: 0000 XXX Xxxxxxxxx
Xxxxx Xxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Commitments
$20,000,000 THE FIRST NATIONAL BANK OF
CHICAGO, Individually and as Agent
By: /S/ XXXXXX X. XXXXXXXXX
-------------------------------
Title:
Address: One First Xxxxxxxx Xxxxx
Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X.
Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
$17,500,000 FIRST UNION NATIONAL BANK, N.A.
By: /S/
-------------------------------
Title:
Address: 0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000
Attention: H. Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
$17,500,000 FLEET NATIONAL BANK
By: /S/ XXXXXXX XXXXXXXXX XXXXX
-------------------------------
Title:
Address: 000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
$15,000,000 M&I XXXXXXXX AND ILSLEY BANK
By: /S/ XXXXX X. XXXXXX
-------------------------------
Title:
Address: 000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
------------
Aggregate $70,000,000
Commitment
PRICING SCHEDULE
============================ -------------------- -------------------- -------------------- =====================
APPLICABLE MARGIN LEVEL I STATUS LEVEL II STATUS LEVEL III STATUS LEVEL IV STATUS
============================ -------------------- -------------------- -------------------- =====================
<50% Usage 0.60% 0.675% 0.75% 1.00%
============================ ==================== ==================== ==================== =====================
$50% Usage 0.725% 0.80% 0.875% 1.25%
============================ ==================== ==================== ==================== =====================
============================ ==================== ==================== ==================== ====================
APPLICABLE FEE RATE LEVEL I STATUS LEVEL II STATUS LEVEL III STATUS LEVEL IV STATUS
============================ ==================== ==================== ==================== ====================
============================ ==================== ==================== ==================== ====================
Facility Fee 0.15% 0.20% 0.25% 0.25%
============================ ==================== ==================== ==================== ====================
For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:
"Debt Coverage Ratio" means, as of any date of determination, the ratio of
(a) Consolidated Indebtedness of Group, to (b) the lesser of (i) ten percent of
UWLIC's Statutory Surplus as of such date and (ii) UWLIC's aggregate Statutory
Net Income for the period of four Fiscal Quarters ending on the date of
determination, without regard to realized capital gains in such period
(determined on a pre-tax basis) and determined without double counting.
"Financials" means the annual or quarterly financial statements of Group
delivered pursuant to SECTION 6.1(A) or (B).
"Level I Status" exists at any date if, as of the last day of the Fiscal
Quarter of Group referred to in the most recent Financials, the Debt Coverage
Ratio is less than 1.5 to 1.00.
"Level II Status" exists at any date if, as of the last day of the Fiscal
Quarter of Group referred to in the most recent Financials, (a) Group has not
qualified for Level I Status and (b) the Debt Coverage Ratio is less than 2.5 to
1.00.
"Level III Status" exists at any date if, as of the last day of the Fiscal
Quarter of Group referred to in the most recent Financials, (a) Group has not
qualified for Level I Status or Level II Status and (b) the Debt Coverage Ratio
is less than 3.5 to 1.00.
"Level IV Status" exists at any date if Group has not qualified for Level I
Status, Level II Status or Level III Status.
"Status" means either Level I Status, Level II Status, Level III Status or
Level IV Status.
"Usage" means, as of any date of determination, (a) the outstanding
principal amount of Revolving Loans and Swing Line Loans, divided by (b) the
Aggregate Commitment.
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Status as reflected in the then
most recent Financials. Adjustments, if any, to the Applicable Margin or
Applicable Fee Rate shall be effective five days after the Agent has received
the applicable Financials. If the Borrowers fail to deliver the Financials to
the Agent at the time required pursuant to SECTION 6.1, then the Applicable
Margin and Applicable Fee Rate shall be the highest Applicable Margin and
Applicable Fee Rate set forth in the foregoing table until five days after such
Financials are so delivered. Notwithstanding the foregoing, until January 31,
1999, the Applicable Margin and Applicable Fee Rate shall be determined as if
Level III Status were in effect.
EXHIBIT A
COMPLIANCE CERTIFICATE
I, _____________ certify that I am the ______________________ of American
Medical Security Group, Inc. ("Group"), and that as such I am authorized to
execute this Compliance Certificate on behalf of Group, and DO HEREBY FURTHER
CERTIFY on behalf of Group that:
1. I have reviewed the terms of that certain Amended and Restated Credit
Agreement, dated as of October 15, 1998, among Group, United Wisconsin Life
Insurance Company, the financial institutions named therein (the "Lenders") and
The First National Bank of Chicago, as agent (the "Agent") and Swing Line Lender
(as amended, supplemented or modified from time to time, the "Credit Agreement")
and I have made, or have caused to be made by employees or agents under my
supervision, a detailed review of the transactions and conditions of Group and
its Subsidiaries (as this and other capitalized terms not defined herein are
defined in the Credit Agreement) during the accounting period covered by the
attached financial statements;
2. The examinations described in paragraph 1 did not disclose, and I have
no knowledge of, the existence of any condition or event which constitutes a
Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Compliance Certificate, except as set forth below; and
3. SCHEDULE I attached hereto sets forth financial data and computations
evidencing compliance with the covenants set forth in Sections 6.11, 6.13, 6.14,
6.15 and 6.19 of the Credit Agreement, all of which data and computations are
true, complete and correct.
Described below are the exceptions, if any, to paragraph 2 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
The foregoing certifications, together with the computations set forth
in SCHEDULE I hereto and the financial statements delivered with this Compliance
Certificate in support hereof, are made and delivered this ______ day of
______________, 19__.
AMERICAN MEDICAL SECURITY GROUP, INC.
By:
Title:
SCHEDULE I
SECTION 6.11 -- INDEBTEDNESS
Indebtedness under Section 6.11(g):
(a) Permitted additional Indebtedness $10,000,000
(b) Actual outstanding additional Indebtedness $___________
(c) Amount of (b) consisting of obligations for borrowed $___________
money (to be limited to $5,000,000)
SECTION 6.13 -- SALE OF ASSETS
Asset Dispositions for period from July 31, 1998 to date of determination:
(a) Permitted asset dispositions:
10% of consolidated total assets of Group and its $___________
Subsidiaries as of the last day of preceding Fiscal Quarter*
(b) Actual asset dispositions for such period $___________
*Note: must also demonstrate (to the extent calculable) that total asset
dispositions for such period do not involve Property which is responsible for
more than 10% of the consolidated net revenues or net income of Group and its
Subsidiaries for the 12-month period ending as of the last day of the Fiscal
Quarter next preceding the date of determination.
SECTION 6.14 -- INVESTMENTS
1. SECTION 6.14(A)(IV)(A)
(a) Permitted aggregate stock Acquisitions under $75,000,000
Section 6.14(a)(iv)(A)
(b) Actual aggregate stock Acquisitions under $___________
Section 6.14(a)(iv)(A)
2. SECTION 6.14(A)(IV)(B) AND (B)(VI)
(a) Permitted aggregate Investments under $25,000,000
Section 6.14(a)(iv)(B) and (b)(vi)
(b) Actual aggregate Investments:
(i) Non-stock consideration paid in connection with $___________
Acquisitions under Section 6.14(a)(iv)(A)
(ii) Investments made pursuant to Section 6.14(a)(iv)(B) $________
(iii)Consideration paid in connection with $___________
Investments made pursuant to Section 6.14(b)(v)
(iv) Investments made pursuant to Section 6.14(b)(vi) $___________
(v) Sum of (i) through (iv) $___________
3. SECTION 6.14(A)(V)
(a) Permitted aggregate Investments under $5,000,000
Section 6.14(a)(v)
(b) Actual aggregate Investments under $___________
Section 6.14(a)(v)
4. SECTION 6.14(B)(III)
For each Material Insurance Subsidiary:**
(a) Permitted aggregate Investments not otherwise
permitted under Section 6.14(b):
(i) Statutory Capital and Surplus of such $___________
Insurance Subsidiary
(ii) .20 times (i) $___________
(b) Actual aggregate Investments not otherwise permitted $___________
under Section 6.14(b)
-----------
** Also to be calculated for all other Insurance Subsidiaries, in the
aggregate, when aggregate Statutory Capital and Surplus exceeds $5,000,000.
SECTION 6.15 -- LIENS
Liens under Section 6.15(h):
(a) Permitted aggregate secured Indebtedness $10,000,000
or obligations
(b) Actual outstanding aggregate secured Indebtedness or $___________
obligations
SECTION 6.19.1 -- INTEREST COVERAGE RATIO
1. Required Interest Coverage Ratio _____ to 1.0
2. Actual Interest Coverage Ratio
(a) 10% of UWLIC's Statutory Surplus $___________
(b) UWLIC's aggregate Statutory Net Income for the period $___________
of four Fiscal Quarters ending on the date of
determination, without regard to realized capital
gains in such period and determined without double counting
(c) Lesser of (a) and (b) $___________
(d) Consolidated Interest Expense of Group and its $___________
Subsidiaries for the period of four Fiscal Quarters
ending on the date of determination (to be annualized
through June 30, 1999)
(e) Ratio of (c) to (d) _____ to 1.0
SECTION 6.19.2 -- LEVERAGE RATIO
1. Required Leverage Ratio 0.30 to 1.0
2. Actual Leverage Ratio:
(a) Consolidated Indebtedness of Group and its $___________
Subsidiaries
(b) Consolidated stockholders' equity of Group, determined $__________
without giving effect to SFAS No. 115
(c) Sum of (a) plus (b) $___________
(d) Ratio of (a) to (c) _____ to 1.0
SECTION 6.19.3 -- CONSOLIDATED TANGIBLE NET WORTH
1. Required Consolidated Tangible Net Worth:
(a) Group's Consolidated Tangible Net Worth on the date of $__________
the Distribution after giving effect thereto
(b) .90 times (a) $___________
(c) Greater of (b) and $128,000,000 $___________
(d) Cumulative positive Consolidated Net Income of Group $___________
and its Subsidiaries for each Fiscal Quarter ending
after the date of the Distribution and on or prior to
the date of determination
(e) .50 TIMES (d) $___________
(f) Aggregate Net Available Proceeds received by Group or $___________
or any of its Subsidiaries from the issuance of
equity securities after the date of the Distribution
(g) .50 TIMES (f) $___________
(h) (c) PLUS (e) PLUS (g) $___________
2. Actual Consolidated Tangible Net Worth:
(a) Consolidated stockholders' equity of Group, $___________
determined without giving effect to SFAS No. 115
(b) Intangible assets, as specified in clause (b) $___________
of the definition of "Consolidated Tangible
Net Worth"
(c) (a) LESS (b) $___________
SECTION 6.19.4 -- RISK BASED CAPITAL
For each Material Insurance Subsidiary:
1. Required Ratio of Total Adjusted Capital to 150%
Company Action Level RBC
2. Actual Ratio of Total Adjusted Capital to %___________
Company Action Level RBC
EXHIBIT B
FORM OF
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
_______________________________ (the "Assignor") and
_______________________________ (the "Assignee") is dated as of
____________________, . The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to an Amended and
Restated Credit Agreement (which, as it may be amended, supplemented, modified,
renewed or extended from time to time is herein called the "Credit Agreement")
described in Item 1 of SCHEDULE 1 attached hereto. Capitalized terms used but
not otherwise defined herein shall have the meanings ascribed thereto in the
Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement such that after giving effect to such assignment the Assignee shall
have purchased pursuant to this Assignment Agreement the percentage interest
specified in Item 3 of SCHEDULE 1 of all outstanding rights and obligations
under the Credit Agreement relating to the Loans and the other Loan Documents.
The aggregate Commitment (or Loans, if the applicable Commitment has been
terminated) purchased by the Assignee hereunder is set forth in Item 4 of
SCHEDULE 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of SCHEDULE
1 or two Business Days (or such shorter period agreed to by the Agent) after a
Notice of Assignment substantially in the form of EXHIBIT I attached hereto has
been delivered to the Agent. Such Notice of Assignment must include any consents
required to be delivered to the Agent pursuant to Section 12.3.1 of the Credit
Agreement. In no event will the Effective Date occur if the payments required to
be made by the Assignee to the Assignor on the Effective Date under SECTION 4
hereof are not made on the proposed Effective Date. The Assignor will notify the
Assignee of the proposed Effective Date no later than the Business Day prior to
the proposed Effective Date. As of the Effective Date, (a) the Assignee shall
have the rights and obligations of a Lender under the Loan Documents with
respect to the rights and obligations assigned to the Assignee hereunder, and
(b) the Assignor shall relinquish its rights and be released from its
corresponding obligations under the Loan Documents with respect to the rights
and obligations assigned to the Assignee hereunder.
4. PAYMENT OBLIGATIONS. On and after the Effective Date, the Assignee shall
be entitled to receive from the Agent all payments of principal, interest and
fees with respect to the interest assigned hereby. The Assignee shall advance
funds directly to the Agent with respect to all Loans and reimbursement payments
made on or after the Effective Date with respect to the interest assigned
hereby. [In consideration for the sale and assignment of Loans hereunder, (a)
the Assignee shall pay the Assignor, on the Effective Date, an amount equal to
the principal amount of the portion of all Floating Rate Advances assigned to
the Assignee hereunder, and (b) with respect to each Eurodollar Advance made by
the Assignor and assigned to the Assignee hereunder which is outstanding on the
Effective Date, (i) on the last day of the Interest Period therefor, (ii) on
such earlier date agreed to by the Assignor and the Assignee, or (iii) on the
date on which any such Eurodollar Advance either becomes due (by acceleration or
otherwise) or is prepaid (the date as described in the foregoing clauses (i),
(ii) or (iii) being hereinafter referred to as the "Payment Date"), the Assignee
shall pay the Assignor an amount equal to the principal amount of the portion of
such Eurodollar Advance assigned to the Assignee which is outstanding on the
Payment Date. If the Assignor and the Assignee agree that the Payment Date for
such Eurodollar Advance shall be the Effective Date, they shall agree to the
interest rate applicable to the portion of such Loan assigned hereunder for the
period from the Effective Date to the end of the existing Interest Period
applicable to such Eurodollar Advance (the "Agreed Interest Rate") and any
interest received by the Assignee in excess of the Agreed Interest Rate shall be
remitted to the Assignor. In the event interest for the period from the
Effective Date to but not including the Payment Date is not paid by Group with
respect to any Eurodollar Advance sold by the Assignor to the Assignee
hereunder, the Assignee shall pay to the Assignor interest for such period on
the portion of such Eurodollar Advance sold by the Assignor to the Assignee
hereunder at the applicable rate provided by the Credit Agreement. In the event
a prepayment of any Eurodollar Advance which is existing on the Payment Date and
assigned by the Assignor to the Assignee hereunder occurs after the Payment Date
but before the end of the Interest Period applicable to such Eurodollar Advance,
the Assignee shall remit to the Assignor the excess of the prepayment penalty
paid with respect to the portion of such Eurodollar Advance assigned to the
Assignee hereunder over the amount which would have been paid if such prepayment
penalty was calculated based on the Agreed Interest Rate. The Assignee will also
promptly remit to the Assignor (x) any principal payments received from the
Agent with respect to Eurodollar Advances prior to the Payment Date, and (y) any
amounts of interest on Loans and fees received from the Agent which relate to
the portion of the Loans assigned to the Assignee hereunder for periods prior to
the Effective Date, in the case of Floating Rate Loans, or the Payment Date, in
the case of Eurodollar Loans, and not previously paid by the Assignee to the
Assignor.]* In the event that either party hereto receives any payment to which
the other party hereto is entitled under this Assignment Agreement, then the
party receiving such amount shall promptly remit it to the other party hereto.
* Each Assignor may insert its standard payment provisions in lieu of the
payment terms included in this Exhibit.
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the Assignor a
fee on each day on which a payment of interest or facility fees is made under
the Credit Agreement with respect to the amounts assigned to the Assignee
hereunder (other than a payment of interest or facility fees for the period
prior to the Effective Date or, in the case of Eurodollar Loans, the Payment
Date, which the Assignee is obligated to deliver to the Assignor pursuant to
SECTION 4 hereof). The amount of such fee shall be the difference between (a)
the interest or fee, as applicable, paid with respect to the amounts assigned to
the Assignee hereunder and (b) the interest or fee, as applicable, which would
have been paid with respect to the amounts assigned to the Assignee hereunder if
each interest rate was of 1% less than the interest rate paid by the applicable
Borrower or if the facility fee was of 1% less than the facility fee paid by the
applicable Borrower, as applicable. In addition, the Assignee agrees to pay % of
the recordation fee required to be paid to the Agent in connection with this
Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor. It is
understood and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor nor
any of its officers, directors, employees, agents or attorneys shall be
responsible for (a) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectibility of any Loan Document, including,
without limitation, documents granting the Assignor and the other Lenders a
security interest in assets of either Borrower or any guarantor, (b) any
representation, warranty or statement made in or in connection with any of the
Loan Documents, (c) the financial condition or creditworthiness of either
Borrower or any guarantor, (d) the performance of or compliance with any of the
terms or provisions of any of the Loan Documents, (e) inspecting any of the
Property, books or records of either Borrower, (f) the validity, enforceability,
perfection, priority, condition, value or sufficiency of any collateral securing
or purporting to secure the Loans, or (g) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the Loan
Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (a) confirms that it has
received a copy of the Credit Agreement, together with copies of the financial
statements requested by the Assignee and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment Agreement, (b) agrees that it will, independently and
without reliance upon the Agent, the Assignor 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
the Loan Documents, (c) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under the Loan Documents as are
delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto, (d) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Documents
are required to be performed by it as a Lender, (e) agrees that its payment
instructions and notice instructions are as set forth in the attachment to
SCHEDULE 1, (f) confirms that none of the funds, monies, assets or other
consideration being used to make the purchase and assumption hereunder are "plan
assets" as defined under ERISA and that its rights, benefits and interests in
and under the Loan Documents will not be "plan assets" under ERISA, [and (g)
attaches the forms prescribed by the Internal Revenue Service of the United
States certifying that the Assignee is entitled to receive payments under the
Loan Documents without deduction or withholding of any United States federal
income taxes].*
* to be inserted if the Assignee is not incorporated under the laws of the
United States, or a state thereof.
8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor
in connection with or arising in any manner from the Assignee's non-performance
of the obligations assumed under this Assignment Agreement. The obligations of
the Assignee under this SECTION 7 shall survive the payment of all amounts
hereunder and the termination of this Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee shall
have the right pursuant to and in accordance with Section 12.3 of the Credit
Agreement to assign the rights which are assigned to the Assignee hereunder to
any entity or person; PROVIDED, that (a) any such subsequent assignment does not
violate any of the terms and conditions of the Loan Documents or any law, rule,
regulation, order, writ, judgment, injunction or decree and that any consent
required under the terms of the Loan Documents has been obtained, and (b) unless
the prior written consent of the Assignor is obtained, the Assignee is not
thereby released from its obligations to the Assignor hereunder, if any remain
unsatisfied, including, without limitation, its obligations under SECTIONS 4, 5,
6, 7 and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the Aggregate
Commitment occurs between the date of this Assignment Agreement and the
Effective Date, the percentage interest specified in Item 3 of SCHEDULE 1 shall
remain the same, but the dollar amount purchased shall be recalculated based on
the reduced Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice of
Assignment embody the entire agreement and understanding between the parties
hereto and supersede all prior agreements and understandings between the parties
hereto relating to the subject matter hereof.
12. GOVERNING LAW. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY THE
INTERNAL LAWS, WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS, OF THE STATE OF
ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
13. NOTICES. Notices shall be given under this Assignment Agreement in the
manner set forth in the Credit Agreement. For the purpose hereof, the addresses
of the parties hereto (until notice of a change is delivered) shall be the
address set forth in the attachment to SCHEDULE 1.
[signature page to follow]
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
[NAME OF ASSIGNOR]
By:
Title:
[NAME OF ASSIGNEE]
By:
Title:
SCHEDULE 1
TO ASSIGNMENT AGREEMENT
1. Description and Date of Credit Agreement:
That certain Amended and Restated Credit Agreement dated as of October
15, 1998 among American Medical Security Group, Inc., United Wisconsin
Life Insurance Company, the financial institutions named therein and
The First National Bank of Chicago, as Agent and Swing Line Lender.
2. Date of Assignment Agreement: ______________, 19__
3. Amounts (As of Date of Item 2 above):
(a) Total of Commitments (Loans)*
under Credit Agreement $___________
(b) Assignee's percentage of the
(Loans)* Commitments purchased
under the Assignment Agreement** __________ %
4. Assignee's aggregate (Loan amount)*
Commitment amount purchased hereunder: $___________
5. Proposed Effective Date:
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
Title: Title:
* If a Commitment has been terminated, insert outstanding Loans in
place of Commitment
** Percentage taken to 10 decimal places
ATTACHMENT TO SCHEDULE 1 TO ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet,
which must include notice address for the Assignor
and the Assignee
(sample form shown below)
ASSIGNOR INFORMATION
CONTACT:
Name:
Telephone No.:
Fax No:
PAYMENT INFORMATION:
Name & ABA No. of Destination Bank:
Account Name & Number for Wire Transfer:
Other Instructions:
ADDRESS FOR NOTICES FOR ASSIGNOR:
ASSIGNEE INFORMATION
CREDIT CONTACT:
Name:
Telephone No.:
Fax No:
KEY OPERATIONS CONTACTS:
Booking Installation:
Name:
Telephone No.:
Fax No:
PAYMENT INFORMATION:
Name & ABA No. of Destination Bank:
Account Name & Number for Wire Transfer:
Other Instructions:
ADDRESS FOR NOTICES FOR ASSIGNEE:
FNBC INFORMATION
Assignee will be called promptly upon receipt of the
signed agreement.
INITIAL FUNDING CONTACT: SUBSEQUENT OPERATIONS CONTACT:
Name: Name:
Telephone No.: (312) 732- Telephone No.: (312) 732-
Fax No.: (312) 732- Fax No.: (312) 732-
INITIAL FUNDING STANDARDS
LIBOR - Fund 2 days after rates are set.
FNBC WIRE INSTRUCTIONS:
The First National Bank of Chicago, ABA #000000000 BNF = 7521-7653/DES, Ref:
ADDRESS FOR NOTICES FOR FNBC:
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Agency/Compliance Division
Suite 0353
Fax No. (000) 000-0000 or (000) 000-0000
EXHIBIT I
TO ASSIGNMENT AGREEMENT
NOTICE OF ASSIGNMENT
_____________ __, ____
To: American Medical Security Group, Inc.
0000 XXX Xxxxxxxxx
Xxxxx Xxx, Xxxxxxxxx 00000
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to the Amended and Restated Credit Agreement (the "Credit
Agreement") described in Item 1 of SCHEDULE 1 attached hereto. Capitalized terms
used herein and not otherwise defined herein or in such consent shall have the
meanings attributed to them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered to
Group and the Agent pursuant to Section 12.3.2 of the Credit Agreement.
3. The Assignor and the Assignee have entered into an Assignment Agreement,
dated as of , (the "Assignment"), pursuant to which, among other things, the
Assignor has sold, assigned, delegated and transferred to the Assignee, and the
Assignee has purchased, accepted and assumed from the Assignor the percentage
interest specified in Item 3 of SCHEDULE 1 of all outstanding, rights and
obligations under the Credit Agreement relating to the facilities listed in Item
3 of SCHEDULE 1, including, without limitation, such interest in the Assignor's
Commitment (if applicable) and the Loans owing to the Assignor relating to such
facilities. The effective date of the Assignment (the "Effective Date") shall be
the later of the date specified in Item 5 of SCHEDULE 1 or two Business Days (or
such shorter period as agreed to by the Agent) after this Notice of Assignment
and any consents and fees required by Sections 12.3.1 and 12.3.2 of the Credit
Agreement have been delivered to the Agent; PROVIDED, that the Effective Date
shall not occur if any condition precedent agreed to by the Assignor and the
Assignee has not been satisfied.
4. The Assignor and the Assignee hereby give to Group and the Agent notice
of the assignment and delegation referred to herein. The Assignor will confer
with the Agent before the date specified in Item 5 of SCHEDULE 1 to determine if
the Assignment Agreement will become effective on such date pursuant to SECTION
3 hereof and will confer with the Agent to determine the Effective Date pursuant
to SECTION 3 hereof if it occurs thereafter. The Assignor shall notify the Agent
if the Assignment does not become effective on any proposed Effective Date as a
result of the failure to satisfy the conditions precedent agreed to by the
Assignor and the Assignee. At the request of the Agent, the Assignor will give
the Agent written confirmation of the satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Agent on or before the
Effective Date the processing fee of $3,500 required by Section 12.3.2 of the
Credit Agreement.
6. If Notes are outstanding on the Effective Date, the Assignor and the
Assignee request and direct that the Agent prepare and cause Group to execute
and deliver new Notes or, as appropriate, replacement Notes, to the Assignor and
the Assignee. The Assignor and, if applicable, the Assignee each agree to
deliver to the Agent the original Notes received by it from Group upon its
receipt of new Notes in the appropriate amount.
7. The Assignee advises the Agent that notice and payment instructions are
set forth in the attachment to SCHEDULE 1.
8. Each party consenting to the Assignment in the space indicated below
hereby releases the Assignor from any obligations to it which have been assigned
to the Assignee. The Assignee hereby represents and warrants that none of the
funds, monies, assets or other consideration being used to make the purchase
pursuant to the Assignment are "plan assets" as defined under ERISA and that its
rights, benefits and interests in and under the Loan Documents will not be "plan
assets" under ERISA.
9. The Assignee authorizes the Agent to act as its agent under the Loan
Documents in accordance with the terms thereof. The Assignee acknowledges that
the Agent has no duty to supply information with respect to either Borrower or
the Loan Documents to the Assignee until the Assignee becomes a party to the
Credit Agreement.
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
Title: Title:
ACKNOWLEDGED AND CONSENTED TO [ACKNOWLEDGED AND CONSENTED
BY THE FIRST NATIONAL BANK OF TO BY AMERICAN MEDICAL SECURITY
CHICAGO, as agent GROUP, INC.]
By: By:
Title: Title:
[Attach photocopy of Schedule 1 to Assignment]
EXHIBIT C
FORM OF
REVOLVING NOTE
$________________ Dated: October 15,1998
FOR VALUE RECEIVED, American Medical Security Group, Inc. (the "Borrower")
HEREBY PROMISES TO PAY to the order of ________________ (the "Lender") the
principal sum of ________________ United States Dollars ($_____) or, if less,
the aggregate unpaid principal amount of the Revolving Loans made by the Lender
to the Borrower pursuant to SECTION 2.1 of the Credit Agreement (as hereinafter
defined), on or before the Facility Termination Date; together, in each case,
with interest on any and all principal amounts remaining unpaid hereunder from
time to time. Interest upon the unpaid principal amount hereof shall accrue at
the rates, shall be calculated in the manner and shall be payable on the dates
set forth in the Credit Agreement. After maturity, whether by acceleration or
otherwise, accrued interest shall be payable upon demand. Both principal and
interest shall be payable in accordance with the Credit Agreement to The First
National Bank of Chicago, as Agent (the "Agent") on behalf of the Lender, at its
main office in Chicago, Illinois in immediately available funds. The Revolving
Loans made by the Lender to the Borrower pursuant to the Credit Agreement and
all payments on account of principal hereof shall be recorded by the Lender and,
prior to any transfer thereof, endorsed on SCHEDULE A attached hereto which is
part of this Revolving Note or otherwise in accordance with its usual practices;
PROVIDED, HOWEVER, that the failure to so record shall not affect the Borrower's
obligations under this Revolving Note.
This Revolving Note is a Revolving Note referred to in, and is entitled to
the benefits of, the Amended and Restated Credit Agreement dated as of October
15, 1998 by and among the Borrower, United Wisconsin Life Insurance Company, the
financial institutions signatory thereto (including the Lender) and the Agent
(as amended, modified or supplemented from time to time, the "Credit Agreement")
and the other Loan Documents. Capitalized terms used but not otherwise defined
herein shall have the respective meanings ascribed thereto in the Credit
Agreement. The Credit Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.
The Borrower hereby waives presentment, demand, protest or notice of any
kind in connection with this Revolving Note.
THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS, WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS, OF THE STATE
OF ILLINOIS BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
AMERICAN MEDICAL SECURITY GROUP, INC.
By:
Title:
SCHEDULE A
Revolving Credit Note
dated October 15, 1998
payable to the order of
[LENDER]
--------------------------------------------------------------------------------------------------------------------
PRINCIPAL PAYMENTS
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Amount of Principal Amount of Principal Unpaid Principal
BORROWED REPAID BALANCE Notation
DATE MADE BY
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
EXHIBIT D
FORM OF
SWING LINE NOTE
$____________ Dated: October 15, 1998
FOR VALUE RECEIVED, [American Medical Security Group, Inc.] [United
Wisconsin Life Insurance Company] (the "Borrower") HEREBY PROMISES TO PAY to the
order of The First National Bank of Chicago (the "Swing Line Lender") the
principal sum of _________ United States Dollars ($_________) or, if less, the
aggregate unpaid principal amount of the Swing Line Loans made by the Swing Line
Lender to the Borrower pursuant to SECTION 2.11 of the Credit Agreement (as
hereinafter defined), on or before the Facility Termination Date; together, in
each case, with interest on any and all principal amounts remaining unpaid
hereunder from time to time. Interest upon the unpaid principal amount hereof
shall accrue at the rates, shall be calculated in the manner and shall be
payable on the dates set forth in the Credit Agreement. After maturity, whether
by acceleration or otherwise, accrued interest shall be payable upon demand.
Both principal and interest shall be payable in accordance with the Credit
Agreement to The First National Bank of Chicago, as Agent (the "Agent") on
behalf of the Swing Line Lender, at its main office in Chicago, Illinois in
immediately available funds.
This Swing Line Note is a Swing Line Note referred to in, and is entitled
to the benefits of, the Amended and Restated Credit Agreement dated as of
October 15, 1998 by and among the Borrower, [United Wisconsin Life Insurance
Company] [American Medical Security Group, Inc.], the financial institutions
signatory thereto (including the Swing Line Lender) and the Agent (as amended,
modified or supplemented from time to time, the "Credit Agreement") and the
other Loan Documents. Capitalized terms used but not otherwise defined herein
shall have the respective meanings ascribed thereto in the Credit Agreement. The
Credit Agreement, among other things, contains provisions for acceleration of
the maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.
The Borrower hereby waives presentment, demand, protest or notice of any
kind in connection with this Swing Line Note.
THIS SWING LINE NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS, WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS, OF THE
STATE OF ILLINOIS BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
[AMERICAN MEDICAL SECURITY GROUP, INC.]
[UNITED WISCONSIN LIFE INSURANCE
COMPANY]
By:
Title:
