EXECUTION COPY
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AMERICAN FINANCIAL GROUP, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
Originally dated as of November 25, 2002
As amended and restated as of November 20, 2003
FLEET NATIONAL BANK,
Administrative Agent
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BANK OF AMERICA, N. A.,
Syndication Agent
KEYBANK NATIONAL ASSOCIATION,
Documentation Agent
FLEET SECURITIES, INC.,
Arranger
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TABLE OF CONTENTS PAGE
1. Definitions; Certain Rules of Construction...............................1
2. The Credits.............................................................14
2.1. Revolving Credits..............................................14
2.2. Application of Proceeds........................................15
2.3. Nature of Obligations of Lenders to Extend Credit..............16
2.4. Option to Extend Maturity of Credit............................16
2.5. Incremental Credit Increase....................................16
3. Interest; Eurodollar Pricing Options; Fees..............................17
3.1. Interest.......................................................17
3.2. Eurodollar Pricing Options.....................................18
3.3. Commitment Fees................................................19
3.4. Capital Adequacy; Regulatory Changes...........................20
3.5. Taxes..........................................................21
3.6. Fees Due Date..................................................22
3.7. Computations of Interest.......................................22
3.8. Maximum Lawful Interest Rate...................................22
4. Payment.................................................................22
4.1. Payment at Maturity............................................22
4.2. Mandatory Prepayments..........................................22
4.3. Voluntary Prepayments of Loan..................................23
4.4. Reborrowing....................................................23
4.5. Application of Payments........................................23
4.6. Payment........................................................23
5. Conditions to Extending Credit..........................................23
5.1. Conditions on Initial Closing Date.............................23
5.2. Conditions to Each Extension of Credit.........................24
6. General Covenants.......................................................25
6.1. Taxes and Other Charges; Accounts Payable......................25
6.2. Conduct of Business, etc.......................................25
6.3. Transactions with Affiliates...................................26
6.4. Insurance......................................................26
6.5. Financial Statements and Reports...............................26
6.6. Certain Financial Tests........................................30
6.7. Restrictions on Indebtedness...................................31
6.8. Restrictions on Liens..........................................32
6.9. Restrictions on Distributions..................................32
6.10. Restrictions on Investments....................................32
6.11. Xxxxxx, Consolidation and Sale of Assets.......................32
6.12. Issuance of Equity by Subsidiaries; Subsidiary Distributions...34
6.13. Negative Pledge Clauses........................................34
6.14. Compliance with ERISA..........................................34
6.15. Compliance with Environmental Laws.............................34
7. Representations and Warranties..........................................35
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7.1. Organization and Business......................................35
7.2. Financial Statements and Other Information.....................35
7.3. Licenses, etc..................................................36
7.4. Changes in Condition...........................................36
7.5. Title to Assets................................................36
7.6. Litigation.....................................................37
7.7. Tax Returns....................................................37
7.8. Enforceability; No Legal Obstacle to Agreements................37
7.9. Defaults.......................................................38
7.10. Burdensome Obligations.........................................38
7.11. Pension Plans..................................................38
7.12. Government Regulation..........................................38
7.13. Environmental Regulation.......................................39
7.14. Disclosure.....................................................39
8. Defaults................................................................39
8.1. Events of Default..............................................39
8.2. Certain Actions Following an Event of Default..................42
8.3. Annulment of Defaults..........................................43
8.4. Waivers........................................................43
9. Expenses; Indemnity.....................................................44
9.1. Expenses.......................................................44
9.2. General Indemnity..............................................44
10. Operations; Agent.......................................................45
10.1. Interests in Credits...........................................45
10.2. Administrative Agent's Authority to Act, etc...................45
10.3. Borrower to Pay Administrative Agent, etc......................45
10.4. Lender Operations for Advances, etc............................45
10.5. Administrative Agent's Resignation.............................47
10.6. Concerning the Administrative Agent............................47
10.7. Rights as a Lender.............................................49
10.8. Independent Credit Decision....................................49
10.9. Indemnification................................................49
11. Successors and Assigns; Lender Assignments and Participations...........50
11.1. Assignments by Lenders.........................................50
11.2. Credit Participants............................................53
11.3. Special Purpose Funding Vehicles...............................53
12. Confidentiality.........................................................54
13. Notices.................................................................55
14. Amendments, Consents, Waivers, etc......................................56
14.1. Lender Consents for Amendments.................................56
14.2. Course of Dealing, Amendments and Waivers......................57
15. Defeasance..............................................................58
16. Venue; Service of Process; Certain Waivers..............................58
17. WAIVER OF JURY TRIAL....................................................58
18. Acknowledgments.........................................................59
19. General.................................................................59
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EXHIBITS
Exhibit 1 - CDO Variable Interest Entities
Exhibit 2.1.4(a) - Form of 364-Day Revolving Note
Exhibit 2.1.4(b) - Form of Three-Year Revolving Note
Exhibit 5.1.2 - Form of Subordination Agreement
Exhibit 5.2.1 - Form of Officer's Certificate
Exhibit 6.3 - Transactions With Affiliates
Exhibit 7.1 - Subsidiaries
Exhibit 7.11 - Defined Benefit Plans
Exhibit 7.13 - Environmental Disclosure
Exhibit 10.1 - Interest in Credits
Exhibit 11.1.1 - Assignment and Acceptance
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AMERICAN FINANCIAL GROUP, INC.
CREDIT AGREEMENT
This Agreement, dated as of November 20, 2003, is among American
Financial Group, Inc., an Ohio corporation, Fleet National Bank, for itself and
as Administrative Agent for the Lenders, Bank of America, N. A., for itself and
as syndication agent for the Lenders, KeyBank National Association, for itself
and as documentation agent for the Lenders and the other Lenders from time to
time party hereto. The parties hereto agree as follows:
RECITALS: Pursuant to this Agreement, the Lenders are extending to the
Borrower revolving credit facilities of $280,000,000 in the aggregate, including
a 364-day revolving credit facility of $93,333,333 and a three-year revolving
credit facility of $186,666,667. At any time on or prior to December 31, 2003
the Borrower may request that the amount of the revolving credit facilities be
increased up to $300,000,000 in the aggregate. The Borrower may request a
364-day extension of the maturity date of the 364-day revolving credit facility
each year. The revolving credit facilities are unsecured. The proceeds of the
revolving credit facilities may be used for general corporate purposes as
provided herein.
AMENDMENT AND RESTATEMENT: Effective as of the Restatement Closing
Date, this Agreement amends and restates in its entirety the Credit Agreement
dated as of November 25, 2002, as amended and in effect on the date hereof prior
to giving effect to this Agreement, among the Borrower, certain of its
Subsidiaries and a group of lenders for which Fleet National Bank is acting as
agent. This Agreement is not a termination or novation of such existing Credit
Agreement, which shall continue in effect as modified hereby. The Credit
Obligations and other Credit Documents presently outstanding in connection with
such existing Credit Agreement shall remain in effect from and after the
Restatement Closing Date, as modified by this Agreement.
1. DEFINITIONS; CERTAIN RULES OF CONSTRUCTION. Certain capitalized terms are
used in this Agreement and in the other Credit Documents with the specific
meanings defined below in this Section 1. Except as otherwise explicitly
specified to the contrary or unless the context clearly requires otherwise, (a)
the capitalized term "Section" refers to sections of this Agreement, (b) the
capitalized term "Exhibit" refers to exhibits to this Agreement, (c) references
to a particular Section include all subsections thereof, (d) the word
"including" shall be construed as "including without limitation", (e) accounting
terms not otherwise defined herein have the meaning provided under GAAP, (f)
references to a particular statute or regulation include all rules and
regulations thereunder and any amendment, modification or replacement, in each
case as from time to time in effect, (g) references to a particular Person
include such Person's successors and assigns to the extent not prohibited by
this Agreement and the other Credit Documents and (h) references to "Dollars" or
"$" mean United States Funds. References to "the date hereof" mean the date
first set forth above.
"ACCUMULATED BENEFIT OBLIGATIONS" means the actuarial present value of
the accumulated benefit obligations under any Plan, calculated in a manner
consistent with Statement No. 87 of the Financial Accounting Standards Board.
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"ADMINISTRATIVE AGENT" means Fleet in its capacity as administrative
agent for the Lenders under this Agreement, as well as its successors and
assigns in such capacity pursuant to Section 10.5.
"ADMINISTRATIVE AGENT OFFICER" shall mean any vice president or
assistant vice president of the Administrative Agent or any other officers or
employees of the Administrative Agent from time to time designated by it in
writing to the Borrower.
"AFC" means American Financial Corporation, an Ohio corporation prior
to its merger into the Borrower on the Restatement Closing Date.
"AFC HOLDING" means AFC Holding Company, an Ohio corporation prior to
its merger into the Borrower on the Restatement Closing Date.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with such Person, and shall include (a) any officer or director
or general partner of such Person and (b) any Person of which such Person or any
Affiliate (as defined in clause (a) above) of such Person shall, directly or
indirectly, beneficially own either (i) at least 30% of the outstanding equity
securities having the general power to vote or (ii) at least 30% of all equity
interests.
"APPLICABLE EURODOLLAR MARGIN" means, for either of the 364-Day
Revolving Loan or the Three-Year Revolving Loan, on any day, the percentage in
the table below corresponding to the applicable S&P and Xxxxx'x Rating for the
public senior debt of the Borrower at the end of the fiscal quarter prior to
such day.
Applicable Applicable
Level S&P / Xxxxx'x Eurodollar Margin: Eurodollar Margin:
Rating 364-Day Revolving Loan Three-Year Revolving Loan
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I > BBB+/Baa1 1.25% 1.25%
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II BBB/Baa2 1.50% 1.50%
III BBB-/Baa3 1.75% 1.75%
IV < BBB-/Baa3 2.25% 2.25%
Changes in the Applicable Eurodollar Margin shall occur on the first Banking Day
after quarterly financial statements have been furnished to the Lenders in
accordance with Sections 6.5.1 or 6.5.2 from time to time. In the event of a
split rating of one level between the applicable Xxxxx'x and S&P ratings, the
higher level shall apply. In the event of a split rating of more than one level
between the applicable Xxxxx'x and S&P ratings, the level that is one level
above the lower level shall apply. In the event that the financial statements
required to be delivered pursuant to Section 6.5.1 or 6.5.2, as applicable, are
not delivered when due, then during the period from the date upon which such
financial statements were due until the date upon which they are actually
delivered, the Applicable Eurodollar Margin shall be the maximum amount set
forth in the table above.
"APPLICABLE RATE" means:
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(a) with respect to any portion of the Loan which is at the time
subject to an effective Eurodollar Pricing Option, the sum of
the Applicable Eurodollar Margin plus the Eurodollar Rate; and
(b) with respect to any other portion of the Loan, the Base Rate.
"APU" means American Premier Underwriters, Inc., a Pennsylvania
corporation.
"ASSIGNEE" has the meaning provided in Section 11.1.1.
"ASSIGNMENT AND ACCEPTANCE" has the meaning provided in Section 11.1.1.
"BANKING DAY" means any day on which banks are open to conduct business
in Boston, Massachusetts and New York, New York and, if such term is used with
reference to a Eurodollar Pricing Option, any day on which dealings are effected
in the Eurodollars in question by first class banks in the inter-bank Eurodollar
market in New York, New York and at the location of the applicable Eurodollar
Office.
"BANKRUPTCY CODE" means Title 11 of the United States Code.
"BANKRUPTCY DEFAULT" means an Event of Default referred to in Section
8.1.13.
"BASE RATE" means, on any day, the greater of (a) the rate of interest
announced by Fleet at the Boston Office as its prime rate, or (b) the Federal
Funds Rate plus 1/2%. The Base Rate is a reference rate and does not necessarily
represent the lowest or best rate being charged to any customer. Changes in the
rate of interest resulting from changes in the Base Rate shall take place
immediately without notice or demand of any kind.
"BORROWER" means American Financial Group, Inc., an Ohio corporation.
"BOSTON OFFICE" means the principal banking office of the
Administrative Agent in Boston, Massachusetts.
"BY-LAWS" means all written rules, regulations, procedures and by-laws
and all other documents relating to the management, governance or internal
regulation of any Person other than an individual, or interpretive of the
Charter of such Person, all as from time to time in effect.
"CAPITALIZED LEASE" means any lease which is required to be capitalized
on the balance sheet of the lessee in accordance with GAAP and Statement Nos. 13
and 97 of the Financial Accounting Standards Board.
"CAPITALIZED LEASE OBLIGATIONS" means the amount of the liability
reflecting the aggregate discounted amount of future payments under all
Capitalized Leases calculated in accordance with GAAP and Statement Nos. 13 and
97 of the Financial Accounting Standards Board.
"CAPITAL TRUST SECURITIES" means capital stock issued by American
Financial Capital Trust I or any other trust or similar entity, the proceeds of
which are invested by such Person in an equivalent amount of Subordinated
Debentures.
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"CHARTER" means the articles of organization, certificate of
incorporation, limited liability company operating agreement, statute,
constitution, joint venture or partnership agreement, or other charter of any
Person other than an individual, each as from time to time in effect.
"CLOSING DATE" means any date on which any extension of credit is made
pursuant to Section 2.
"CODE" means the federal Internal Revenue Code of 1986.
"COMMITMENT" means, with respect to any Lender, such Xxxxxx's
obligations to extend the credit contemplated by this Agreement.
"COMMITMENT FEE RATE" means, for either of the 364-Day Revolving Loan
or the Three-Year Revolving Loan, on any day, the percentage in the table below
corresponding to the applicable S&P and Xxxxx'x Rating for the public senior
debt of the Borrower at the end of the fiscal quarter prior to such day.
Level S&P / Xxxxx'x Commitment Fee Rate: Commitment Fee Rate:
Rating 364-Day Revolving Loan Three-Year Revolving Loan
----- ------------- ---------------------- -------------------------
I > BBB+/Baa1 0.200% 0.30%
-
II BBB/Baa2 0.250% 0.35%
III BBB-/Baa3 0.300% 0.40%
IV < BBB-/Baa3 0.375% 0.50%
Changes in the Commitment Fee Rate shall occur on the first Banking Day after
quarterly financial statements have been furnished to the Lenders in accordance
with Sections 6.5.1 or 6.5.2 from time to time. In the event of a split rating
of one level between the applicable Xxxxx'x and S&P ratings, the higher level
shall apply. In the event of a split rating of more than one level between the
applicable Xxxxx'x and S&P ratings, the level that is one level above the lower
level shall apply. In the event that the financial statements required to be
delivered pursuant to Section 6.5.1 or 6.5.2, as applicable, are not delivered
when due, then during the period from the date upon which such financial
statements were due until the date upon which they are actually delivered, the
Commitment Fee Rate shall be the maximum amount set forth in the table above.
"CONSOLIDATED" and "CONSOLIDATING", when used with reference to any
term, mean that term (or the terms "combined" and "combining", as the case may
be, in the case of partnerships and joint ventures) as applied to the accounts
of the Borrower (or other specified Person) and all of its Subsidiaries (or
other specified Persons), or such of its Subsidiaries as may be specified,
consolidated (or combined) in accordance with GAAP and with appropriate
deductions for minority interests in Subsidiaries.
"CREDIT DOCUMENTS" means:
(a) This Agreement, the Revolving Notes, the Subordination Agreement and
any Interest Rate Protection Agreement provided by a Lender (or an
Affiliate of a Lender) to the Borrower, each as from time to time in
effect; and
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(b) Any other present or future agreement or instrument from time to
time entered into among the Administrative Agent or all the Lenders,
on the one hand, and the Borrower or any of its Subsidiaries,
or any other Person as a guarantor, pledgor or other obligor, on the
other hand, relating to, amending or modifying this Agreement or any
other Credit Document referred to above or which is stated to be a
Credit Document, each as from time to time in effect.
"CREDIT OBLIGATIONS" means all present and future liabilities,
obligations and Indebtedness of the Borrower, any of its Subsidiaries or any
other Person becoming party to a Credit Document as a guarantor, pledgor or
other obligor owing to the Lenders or any of them under or in connection with
this Agreement or any other Credit Document, including obligations in respect of
principal, interest, commitment fees, amounts provided for in Sections 3.2.4,
3.4 and 3.5, and other fees, charges, indemnities and expenses from time to time
owing hereunder or under any other Credit Document, including payment and
reimbursement obligations under Interest Rate Protection Agreements that
constitute Credit Documents (all whether accruing before or after a Bankruptcy
Default and regardless of whether allowed as a claim in bankruptcy or similar
proceedings).
"CREDIT PARTICIPANT" has the meaning provided in Section 11.2.
"DEFAULT" means any Event of Default and any event or condition which
with the passage of time or giving of notice, or both, would become an Event of
Default.
"DELINQUENCY PERIOD" has the meaning provided in Section 10.4.3.
"DELINQUENT PAYMENT" has the meaning provided in Section 10.4.3.
"DISTRIBUTION" means:
(a) The declaration or payment of any dividend, on or in
respect of any shares of any class of capital stock of the Borrower or
any of its Subsidiaries, other than dividends payable solely in shares
of common stock of the payor;
(b) The purchase or other retirement of any shares of any
class of capital stock of the Borrower or any of its Subsidiaries
directly or indirectly through a Subsidiary or otherwise;
(c) Any other distribution on or in respect of any shares of
any class of capital stock of the Borrower or any of its Subsidiaries;
or
(d) Any payment of principal of or interest or premium on, or
any purchase or other retirement of, any Indebtedness required to be,
or which is by its terms, subordinated to any of the Credit
Obligations, including (i) the Subordinated Debentures and (ii)
Indebtedness of the Borrower owing to any of its Subsidiaries or
Affiliates.
"ELIGIBLE ASSIGNEE" means (a) a Lender, (b) an Affiliate of a Lender,
(c) a Related Fund and (d) subject to the prior approval of the Administrative
Agent and, so long as no Event of
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Default shall have occurred and be continuing, the Borrower, such approval by
the Administrative Agent and the Borrower not to be unreasonably withheld:
(i) a commercial bank organized under the laws of the United
States of America, or any state thereof, and having total assets in
excess of $500,000,000;
(ii) a savings and loan association or savings bank
organized under the laws of the United States of America, or any state
thereof, and having total assets in excess of $500,000,000;
(iii) a commercial bank organized under the laws of any
other country that is a member of the Organization for Economic
Cooperation and Development or has concluded special lending
arrangements with the International Monetary Fund associated with its
General Arrangements to Borrow or of the Cayman Islands, or a political
subdivision of any such country, and having total assets in excess of
$500,000,000, so long as such bank is acting through a branch or agency
located in the United States of America;
(iv) the central bank of any country that is a member of the
Organization for Economic Cooperation and Development; and
(v) a finance company, insurance company or other financial
institution or fund (whether a corporation, partnership, trust or other
entity) that is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business and having
total assets in excess of $500,000,000;
PROVIDED, HOWEVER, that the Borrower or an Affiliate of the Borrower shall not
qualify as an Eligible Assignee under any circumstances.
"ENVIRONMENTAL LAWS" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA GROUP MEMBER" means the Borrower and any of its Subsidiaries and
any Person which is a member of the controlled group or under common control
with the Borrower or any of its Subsidiaries within the meaning of sections
414(b) or 414(c) of the Code or section 4001(a)(14) of ERISA.
"EURODOLLAR BASIC RATE" means, for any Eurodollar Interest Period:
(a) the rate of interest at which deposits of United States
Funds are offered in the London interbank market for a period of time
equal to such Eurodollar Interest Period that appears on Dow Xxxxx
Market Service Page 3750 (or any successor service) as of 11:00 a.m.
(London time) two Banking Days prior to the Banking Day on which such
Eurodollar Interest Period begins or
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(b) if no such rate appears on Dow Xxxxx Market Service Page
3750 (or any successor service), the rate of interest determined by the
Administrative Agent to be the average of up to four interest rates per
annum at which deposits of United States Funds are offered in the
London interbank market for a period of time equal to such Eurodollar
Interest Period which appear on the Xxxxxx'x Screen LIBO Page (or any
successor service) as of 11:00 a.m. (London time) two Banking Days
prior to the Banking Day on which such Eurodollar Interest Period
begins if at least two such offered rates so appear on the Xxxxxx'x
Screen LIBO Page (or any successor service) or
(c) if no such rate appears on the Dow Xxxxx Market Service
Page 3750 (or any successor service) and fewer than two offered rates
appear on the Xxxxxx'x Screen LIBO Page (or any successor service), the
rate of interest at which deposits of United States Funds in an amount
comparable to the portion of the Loan as to which the related
Eurodollar Pricing Option has been elected and which have a term
corresponding to such Eurodollar Interest Period are offered to the
Agent by first class banks in the London inter-bank market for delivery
in immediately available funds at a Eurodollar Office on the first day
of such Eurodollar Interest Period as determined by the Administrative
Agent at approximately 11:00 a.m. (London time) two Banking Days prior
to the date upon which such Eurodollar Interest Period is to commence
(which determination by the Administrative Agent shall, in the absence
of manifest error, be conclusive).
"EURODOLLAR INTEREST PERIOD" means any period, selected as provided in
Section 3.2.1, of one, two, three or six months commencing on any Banking Day;
provided, however, that subject to Section 3.2.3, if any Eurodollar Interest
Period so selected would otherwise begin or end on a date which is not a Banking
Day, such Eurodollar Interest Period shall instead begin or end, as the case may
be, on the next succeeding Banking Day unless such next succeeding Banking Day
would fall in the next calendar month, in which case such Eurodollar Interest
Period shall end on the next preceding Banking Day, and if there exists no day
numerically corresponding to the commencement date of such Eurodollar Interest
Period in the month in which the last day of such Eurodollar Interest Period
would otherwise fall, such Eurodollar Interest Period shall end on the last
Banking Day of such month; provided, however, that if any Eurodollar Interest
Period would extend beyond the Final Maturity Date, the last day of such
Eurodollar Interest Period shall be the Final Maturity Date, all in accordance
with the then current banking practice in the inter-bank Eurodollar market with
respect to Eurodollar deposits at the applicable Eurodollar Office.
"EURODOLLAR OFFICE" means such non-United States office or
international banking facility of any Lender as such Lender may from time to
time select.
"EURODOLLAR PRICING OPTIONS" means the options granted pursuant to
Section 3.2.1 to have the interest on all or any portion of the Loan computed on
the basis of a Eurodollar Rate.
"EURODOLLAR RATE" for any Eurodollar Interest Period means the rate,
rounded to the nearest 1/100%, obtained by dividing (a) the Basic Eurodollar
Rate for such Eurodollar Interest Period by (b) an amount equal to 1 MINUS the
Eurodollar Reserve Rate; PROVIDED, HOWEVER, that if at any time during such
Eurodollar Interest Period the Eurodollar Reserve Rate applicable to any
outstanding Eurodollar Pricing Option changes, the Eurodollar Rate for such
Eurodollar Interest
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Period shall automatically be adjusted to reflect such change, effective as of
the date of such change.
"EURODOLLAR RESERVE RATE" means the stated maximum rate (expressed as a
decimal) of all reserves (including any basic, supplemental, marginal or
emergency reserve or any reserve asset), if any, as from time to time in effect,
required by any Legal Requirement to be maintained by any Lender against (a)
"Eurocurrency liabilities" as specified in Regulation D of the Board of
Governors of the Federal Reserve System, (b) any other category of liabilities
that includes deposits by reference to which the interest rate on portions of
the Loan subject to Eurodollar Pricing Options is determined, (c) the principal
amount of or interest on any portion of the Loan subject to a Eurodollar Pricing
Option, or (d) any other category of extensions of credit, or other assets, that
includes loans by a non-United States office of any of the Lenders to United
States residents.
"EURODOLLARS" means, with respect to any Lender, deposits of United
States Funds in a non-United States office or an international banking facility
of such Lender.
"EVENT OF DEFAULT" has the meaning provided in Section 8.1.
"EXCHANGE ACT" means the federal Securities Exchange Act of 1934.
"FEDERAL FUNDS RATE" means, for any day, (a) the rate 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, as such
weighted average is published for such day (or, if such day is not a Banking
Day, for the immediately preceding Banking Day) by the Federal Reserve Bank of
New York or (b) if such rate is not so published for such Banking Day, as
determined by the Administrative Agent using any reasonable means of
determination. Each determination by the Administrative Agent of the Federal
Funds Rate shall, in the absence of manifest error, be conclusive.
"FINAL MATURITY DATE" means (a) with respect to the 364-Day Revolving
Loan, November 19, 2004, or such later date as determined in accordance with
Section 2.4 and (b) with respect to the Three-Year Revolving Loan, November 24,
2005.
"FINANCIAL OFFICER" means, with respect to any Person, the chief
financial officer or treasurer of such Person or a vice president whose primary
responsibility is for the financial affairs of such Person.
"FINANCING DEBT" means:
(a) Indebtedness for borrowed money;
(b) Indebtedness evidenced by notes, debentures or similar
instruments;
(c) Indebtedness in respect of Capitalized Leases;
(d) Indebtedness for the deferred purchase price of assets
(other than normal trade accounts payable in the ordinary
course of business); and
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(e) Indebtedness in respect of mandatory redemption or
dividend rights on capital stock (or other equity).
"GAAP" means generally accepted accounting principles, as defined by
the Financial Accounting Standards Board, as from time to time in effect.
"GAFR" means Great American Financial Resources, Inc., a Delaware
corporation.
"GAIC" means Great American Insurance Corporation, an Ohio
corporation.
"GALIC" means Great American Life Insurance Company, an Ohio
corporation.
"GRANTING LENDER" has the meaning provided in Section 11.3.
"HOLDING COMPANIES" means, collectively, the Borrower and APU.
"INDEBTEDNESS" means all obligations, contingent or otherwise, which
in accordance with GAAP should be classified upon the obligor's balance sheet as
liabilities, but in any event including:
(a) Indebtedness for borrowed money;
(b) Indebtedness evidenced by notes, debentures or similar
instruments;
(c) Indebtedness in respect of Capitalized Leases;
(d) Indebtedness for the deferred purchase price of assets
(other than normal trade accounts payable in the ordinary
course of business); and
(e) Indebtedness in respect of mandatory redemption or
dividend rights on capital stock (or other equity).
(f) Liabilities secured by any Lien existing on property owned
or acquired by the obligor or any Subsidiary thereof,
whether or not the liability secured thereby shall have
been assumed; and
(g) All guarantees and endorsements in respect of
Indebtedness of others.
"INDEMNITEE" has the meaning provided in Section 9.2.
"INSURANCE AUTHORITIES" means collectively, in relation to any
particular jurisdiction, the insurance regulatory authorities, commissions,
agencies, departments, boards or other authorities of or in that jurisdiction.
"INSURANCE SUBSIDIARY" means each Subsidiary of the Borrower engaged
primarily in the insurance business and licensed as an insurance company in one
or more states, and shall in any event include (a) GAIC, (b) GALIC, (c) RICA,
and (d) the successors and assigns of any of the foregoing permitted under this
Agreement.
9
"INTEREST AND DIVIDEND CHARGES" means, for any period, the sum (without
duplication) of:
(a) the aggregate amount of interest, including commitment
fees, charges in the nature of interest under Capitalized Leases and
net amounts due under Interest Rate Protection Agreements, accrued
directly by the Holding Companies (whether such interest is reflected
as an item of expense or capitalized) in accordance with GAAP,
PLUS (b) actual cash dividends (including liquidating distributions
and dividends paid on Capital Trust Securities) paid by the Holding
Companies (other than regular cash dividends paid on the Borrower's
common stock in amounts consistent with past practice and other than
dividends paid to any Holding Company) with respect to capital stock.
"INTEREST RATE PROTECTION AGREEMENT" means any interest rate swap,
interest rate cap, interest rate bridge or other contractual arrangement
protecting a Person against changes in interest rates on Financing Debt provided
by any Lender (or an Affiliate of a Lender).
"INVESTMENT" means:
(a) any loan, advance or extension of credit (including any
guarantees of the Indebtedness of) to any other Person;
(b) any contribution to the capital of any other Person or the
purchase of any shares of capital stock, partnership or other equity
interest; and
(c) any consideration (other than cash) received upon any sale
of property;
PROVIDED, HOWEVER, that the term "Investment" shall not include (i) investments
and reinvestments in portfolio securities in the ordinary course of business,
(ii) sales or other transfers of portfolio assets among the Borrower and its
Subsidiaries in the ordinary course of business, (iii) trade and customer
accounts receivable for property leased, goods furnished or services rendered in
the ordinary course of business and payable on a current basis in accordance
with customary trade terms, (iv) deposits, advances or prepayments to suppliers
for property leased or licensed, goods furnished and services rendered in the
ordinary course of business, (v) advances to employees for relocation and travel
expenses, drawing accounts and similar expenditures, (vi) stock or other
securities acquired in connection with the satisfaction or enforcement of
Indebtedness or claims due to any Person or as security for any such
Indebtedness or claims or (vii) demand deposits in banks or similar financial
institutions.
"IPC" means Infinity Property & Casualty Corporation, an Ohio
corporation.
"LEGAL REQUIREMENT" means any requirement imposed upon any of the
Lenders by any law of the United States of America or any jurisdiction in which
any Eurodollar Office is located or by any regulation, order, interpretation,
ruling or official directive of the Board of Governors of the Federal Reserve
System or any other board or governmental or administrative agency of the United
States of America, any central bank or of any jurisdiction in which any
Eurodollar Office is located, or of any political subdivision of any of the
foregoing. Any requirement imposed by any such regulation, order,
interpretation, ruling or official directive not having the force of law shall
10
be deemed to be a Legal Requirement if any of the Lenders reasonably believes
that compliance therewith is in the best interest of such Lender.
"LENDERS" means the Administrative Agent and the other banks and other
Persons owning a Percentage Interest and their respective successors and
assigns, including Assignees under Section 11.1.
"LIEN" means, with respect to any Person:
(a) Any encumbrance, mortgage, pledge, lien, charge or
other security interest of any kind upon any property or assets of
such Person, whether now owned or hereafter acquired, or upon the
income or profits or proceeds therefrom;
(b) Any arrangement or agreement which prohibits such Person
from creating encumbrances, mortgages, pledges, liens, charges or other
security interests;
(c) The acquisition of, or the agreement or option to acquire,
any property or assets upon conditional sale or subject to any other
title retention agreement, device or arrangement (including a
Capitalized Lease); and
(d) The sale, assignment, pledge or transfer for security of
any accounts, general intangibles or chattel paper of such Person, with
or without recourse.
"XXXXXXX FAMILY MEMBERS" means, collectively, Xxxx X. Xxxxxxx,
Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxx, Xxxx X. Xxxxxxx XXX, X. Xxxxx Xxxxxxx
and Xxxxx X. Xxxxxxx, the respective estates, spouses, heirs, ancestors, lineal
descendants, legatees and legal representatives of any of the foregoing and the
trustee of any bona fide trust of which one or more of the foregoing are the
sole beneficiaries or the grantors thereof.
"LOAN" has the meaning provided in Section 2.1.2.
"MARGIN STOCK" means "margin stock" within the meaning of Regulation T,
U or X of the Board of Governors of the Federal Reserve System.
"MATERIAL ADVERSE CHANGE" means, since December 31, 2002, a material
adverse change in the business, assets, financial condition, income or prospects
of the Borrower and its Subsidiaries (on a Consolidated basis), whether as a
result of (a) general economic conditions affecting the industries in which such
Persons or the businesses in which they have made their principal investments
operate, (b) fire, flood or other natural calamities, (c) environmental
pollution, (d) regulatory changes, judicial decisions, war or other governmental
action or (e) any other event or development, whether or not related to those
enumerated above.
"MULTIEMPLOYER PLAN" means any Plan which is a "multiemployer plan" as
defined in section 4001(a)(3) of ERISA.
"NATIONAL INTERSTATE" means National Interstate Corporation, an Ohio
corporation owned by GAIC.
11
"NET INCOME" means, for any period, the net income of the Borrower and
its Subsidiaries on a Consolidated basis, determined in accordance with GAAP.
"NET WORTH" means, on any date, the sum of (a) the aggregate amount
reported on the Consolidated balance sheet of the Borrower and its Subsidiaries
under "Total Shareholders' Equity", but excluding (i) all amounts in respect of
unrealized gains or losses, net of taxes, on fixed maturity securities and (ii)
any redeemable capital stock (or redeemable shares of other beneficial interest)
plus (b) to the extent not included in clause (a) above, Capital Trust
Securities permitted by Section 6.12.1, in each case as determined in accordance
with GAAP.
"NONPERFORMING LENDER" has the meaning provided in Section 10.4.3.
"PAYMENT DATE" means the first Banking Day of each January, April, July
and October of each year.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
entity.
"PERCENTAGE INTEREST" means, with respect to any Lender, the Commitment
of such Lender with respect to the respective portions of the Loan. For purposes
of determining votes or consents by the Lenders, the Percentage Interest of any
Lender shall be computed as follows: (a) at all times when no Event of Default
under Section 8.1.1 and no Bankruptcy Default exists, the ratio that the
respective Commitments of such Lender bears to the total Commitments of all
Lenders as from time to time in effect and reflected in the Register, and (b) at
all other times, the ratio that the respective amounts of the outstanding Loan
owing to such Lender bear to the total outstanding Loan owing to all Lenders.
"PERFORMING LENDER" has the meaning provided in Section 10.4.3.
"PERSON" means any present or future natural person or any corporation,
association, partnership, joint venture, limited liability company, business
trust, trust, organization, business, individual or government or any
governmental agency or political subdivision thereof.
"PLAN" means, at any time, any pension or other employee benefit plan
subject to Title IV of ERISA maintained, or to which contributions have been
made, by the Borrower or any of its Subsidiaries within six years prior to such
time.
"QUALIFIED INSTITUTIONAL BUYER" means:
(a) A duly authorized domestic bank, savings and loan
association, registered investment company, registered investment
adviser or registered dealer, acting for its own account or the
accounts of other Qualified Institutional Buyers, which in the
aggregate owns and invests on a discretionary basis at least
$100 million in securities and (if a bank or savings and loan
association) which has a net worth of at least $100 million;
(b) A foreign bank or savings and loan association or
equivalent institution, acting for its own account or the account of
other Qualified Institutional Buyers, which in the aggregate owns and
invests on a discretionary basis at least $100 million in securities
and has a net worth of at least $100 million; or
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(c) Any other entity which also constitutes a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act.
"REGISTER" has the meaning provided in Section 11.1.3.
"RELATED FUND" means, with respect to any Lender that is a fund that
invests in senior bank loans, any other fund that invests in senior bank loans
and is managed by the same investment advisor as such Lender or by an Affiliate
of such investment advisor.
"REQUIRED MAJORITY LENDERS" means such Lenders as own at least 51% of
the Percentage Interests.
"RESTATEMENT CLOSING DATE" means the initial date on which all the
conditions set forth in Section 5.1 are satisfied or waived in accordance with
the terms hereof.
"REVOLVING NOTES" has the meaning provided in Section 2.1.4.
"RICA" means Republic Indemnity Company of America, a California
corporation.
"SPV" has the meaning provided in Section 11.3.
"SECURITIES ACT" means the federal Securities Act of 1933.
"SUBORDINATED DEBENTURES" means any subordinated debentures (which
debentures shall be subordinated to the Credit Obligations on market terms)
issued by the Borrower or any of its Subsidiaries on or prior to the date hereof
(or, in the case only of GAFR, after the date hereof as contemplated by Section
6.12.1(c)(ii)) to American Financial Capital Trust I or any other trust or
similar entity controlled by the Borrower or any of its Subsidiaries.
"SUBORDINATION AGREEMENT" has the meaning provided in Section 5.1.2.
"SUBSIDIARY" means any Person of which the Borrower (or other specified
Person) shall at the time, directly or indirectly through one or more of its
Subsidiaries, (a) own more than 50% of the outstanding capital stock (or other
shares of beneficial interest) or more than 50% of such stock (or other shares
of beneficial interest) entitled to vote generally, (b) hold more than 50% of
the partnership, joint venture or similar interests or (c) be a general partner
or joint venturer.
"TAX" means any tax, levy, impost, duty, deduction, withholding or
other charge of whatever nature at any time required by any Legal Requirement
(a) to be paid by any Lender or (b) to be withheld or deducted from any payment
otherwise required hereby to be made by the Borrower to any Lender, in each case
on or with respect to (i) any Eurodollar deposit purchased in the inter-bank
Eurodollar market which was used to fund any portion of the Loan subject to a
Eurodollar Pricing Option, (ii) any portion of the Loan subject to a Eurodollar
Pricing Option funded with the proceeds of any such Eurodollar deposit, (iii)
the principal amount of or interest on any portion of the Loan, or (iv) funds
transferred from a non-United States office or an international banking facility
to a United States office of such Lender in order to fund a portion of the Loan
subject to a Eurodollar Pricing Option; provided, however, that the term "Tax"
shall not include (1) taxes imposed upon or measured by the net income or net
worth of such Lender, (2)
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taxes which would have been imposed even if there had been no provision for
Eurodollar Pricing Options in this Agreement or (3) amounts required to be
withheld by such Lender from payments of interest to Persons from whom
Eurodollar deposits were purchased by such Lender.
"364-DAY REVOLVING LOANS" has the meaning provided in Section 2.1.1.
"364-DAY REVOLVING LOAN MAXIMUM AMOUNT OF CREDIT" has the meaning
provided in Section 2.1.1.
"THREE-YEAR REVOLVING LOANS" has the meaning provided in Section 2.1.2.
"THREE-YEAR REVOLVING LOAN MAXIMUM AMOUNT OF CREDIT" has the meaning
provided in Section 2.1.2.
"TOTAL CAPITALIZATION" means, on any date, the sum, without
duplication, of (a) Total Financing Debt plus (b) Net Worth plus (c) all amounts
appearing on the Consolidated balance sheet of the Borrower and its Subsidiaries
in the line item "Minority Interest", all determined in accordance with GAAP.
"TOTAL FINANCING DEBT" means, on any date, the aggregate amount of all
Financing Debt of the Borrower and its Subsidiaries on a Consolidated basis,
including in any event any capital stock (or other shares of beneficial
interest) which constitutes Financing Debt, all determined in accordance with
GAAP, but excluding Indebtedness in respect of (a) the Capital Trust Securities
permitted by Section 6.12.1 (including the Subordinated Debentures) and (b) any
collateralized debt obligation fund managed by the Borrower which is listed on
Exhibit 1 and which Indebtedness in this clause (b) is carried as "Long Term
Debt - Variable Interest Entities" on the Borrower's balance sheet from time to
time in accordance with GAAP.
"2002 FORM 10-K" has the meaning provided in Section 7.2.
"UNITED STATES FUNDS" means such coin or currency of the United States
of America as at the time shall be legal tender therein for the payment of
public and private debts.
2. THE CREDITS.
2.1. REVOLVING CREDITS.
2.1.1. 364-DAY REVOLVING LOAN. Subject to all the terms and conditions of this
Agreement and so long as no Default exists, each Lender will severally
lend to the Borrower loans (collectively, the "364-DAY REVOLVING LOAN")
in an aggregate principal amount not to exceed at any time outstanding
such Lender's Percentage Interest in an amount (the "364-DAY REVOLVING
LOAN MAXIMUM AMOUNT OF CREDIT") equal to the lesser of:
(a) $93,333,333, or
(b) such amount (in an integral multiple of $1,000,000)
specified by irrevocable notice from the Borrower to the
Lenders.
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2.1.2. THREE-YEAR REVOLVING LOAN. Subject to all the terms and conditions of
this Agreement and so long as no Default exists, each Lender will
severally lend to the Borrower loans (collectively, the "THREE-YEAR
REVOLVING LOAN") in an aggregate principal amount not to exceed at any
time outstanding such Lender's Percentage Interest in an amount (the
"THREE-YEAR REVOLVING LOAN MAXIMUM AMOUNT OF CREDIT") equal to the
lesser of:
(a) $186,666,667 or
(b) such amount (in an integral multiple of $1,000,000)
specified by irrevocable notice from the Borrower to the
Lenders.
The aggregate principal amount of the 364-Day Revolving Loan and the Three-Year
Revolving Loan at any one time outstanding is referred to herein as the "Loan".
2.1.3. BORROWING REQUESTS. Revolving loans will be made to the Borrower by
the Lenders under Sections 2.1.1 and 2.1.2 on any Banking Day on or
after the initial Closing Date and prior to the Final Maturity Date
for such loans. Not later than 11:00 AM (Boston time) on the Banking
Day (or third Banking Day if any portion of such loan will be subject
to a Eurodollar Pricing Option on the requested Closing Date)
requested as the Closing Date for any such loan, the Borrower will
give the Administrative Agent notice of its request (which may be given
by a telephone call received by an Administrative Agent Officer and
promptly confirmed in writing), specifying (a) the amount of the
requested loan (not less than $1,000,000 and an integral multiple of
$1,000,000), and (b) the requested Closing Date therefor. Each such
loan will be made at the Boston Office by depositing the amount
thereof to the general account of the Borrower with the Administrative
Agent. In connection with each such loan, the Borrower shall furnish
to the Administrative Agent a certificate dated the applicable Closing
Date in substantially the form of Exhibit 5.2.1, together with any
other documents required by Section 5.2.
2.1.4. REVOLVING NOTES. The Loan shall be evidenced by notes in substantially
the form of (a) the 364-Day Revolving Note contained in Exhibit
2.1.4(a) and (b) the Three-Year Revolving Note contained in Exhibit
2.1.4(b) (collectively, the "REVOLVING NOTES") payable by the Borrower
to the respective Lenders. Each Lender shall keep a record of the date
and amount of (a) each loan made by such Lender pursuant to Section
2.1.1 or 2.1.2 and (b) each payment of principal made pursuant to
Section 4. The record made by each Lender pursuant to this Section
shall, in the absence of manifest error, be conclusive. Prior to the
transfer of any Revolving Note, the Lender shall endorse on a schedule
thereto appropriate notations evidencing such dates and amounts;
PROVIDED, HOWEVER, that the failure of any Lender to make any such
recordation or endorsement shall not affect the obligations of the
Borrower under this Agreement, the Revolving Notes or any other Credit
Document.
2.2. APPLICATION OF PROCEEDS. The Borrower covenants that the
proceeds of the Loan will be applied only for lawful corporate
purposes of the Borrower, including acquisitions, increasing
the statutory capital of Insurance Subsidiaries, making loans
or advances to Subsidiaries for any of their lawful corporate
purposes and for the repayment from
15
time to time of any Financing Debt of the Borrower and its
Subsidiaries. The Borrower will not directly or indirectly apply
any part of the proceeds of any extension of credit made pursuant
to this Agreement to purchase or to carry Margin Stock or to refinance
any loan incurred for such purpose or to any transaction
prohibited by laws or regulations applicable to any of the
Lenders.
2.3. NATURE OF OBLIGATIONS OF LENDERS TO EXTEND CREDIT. The
Lenders' obligations under this Agreement to make the Loan are
several and are not joint or joint and several. If any Lender
shall fail to perform its obligations to extend such credit,
the amount of the Commitment of the Lender so failing to
perform may be assumed by the other Lenders, in their absolute
discretion, in such proportions as such Lenders may agree
among themselves, so that the aggregate amount of the
Commitment to make the Loan provided for in this Section 2
shall not be reduced and the Percentage Interest of each other
Lender shall be appropriately adjusted; PROVIDED, HOWEVER,
that such assumption and adjustment shall not relieve the
Lenders from any of their obligations to make such extension
of credit or to repay any Delinquent Payment required by
Section 10.4.3.
2.4. OPTION TO EXTEND MATURITY OF CREDIT. So long as no Default
exists, the Borrower may request by written notice to the
Administrative Agent, not more than 75 days nor less than 60
days prior to the Final Maturity Date for the 364-Day
Revolving Loan, that the Final Maturity Date for the 364-Day
Revolving Loan be extended for an additional 364 days. The
Lenders shall consider such request in their sole discretion,
and may propose additional terms, including changes in the
interest rates, fees and covenants as a condition to any
extension. Any decision to extend such Final Maturity Date
must be unanimously agreed to in writing by all Xxxxxxx. The
Administrative Agent on behalf of the Lenders shall provide a
written response to the Borrower's request not later than 30
days following receipt of such request. In the event that all
Lenders offer to extend such Final Maturity Date pursuant
hereto, the Borrower may accept such offer by written notice
received by the Administrative Agent not later than 15 days
prior to such anniversary.
2.5. INCREMENTAL CREDIT INCREASE.
2.5.1. INCREMENTAL CREDIT INCREASE REQUESTS. At any time on or prior to
December 31, 2003, so long as no Default exists, the Borrower may
request, by written notice to the Administrative Agent (the
"INCREMENTAL CREDIT INCREASE REQUEST"), an increase in the 364-Day
Revolving Loan Maximum Amount of Credit and/or the Three-Year Revolving
Loan Maximum Amount of Credit in a minimum aggregate amount of
$5,000,000, the aggregate amount of all such increases from time to
time not to exceed $20,000,000 (the "INCREMENTAL CREDIT INCREASE").
The Incremental Credit Increase will constitute a portion of the
364-Day Revolving Loans or the Three-Year Revolving Loans, as may be
agreed among the Administrative Agent, the Borrower and those
respective financial institutions (including any existing Lenders) that
provide the Incremental Credit Increase. Upon receipt of any
Incremental Credit Increase Request and any other information as the
Administrative Agent may reasonably request in connection therewith,
the Administrative Agent shall promptly notify the Lenders of such
Incremental Credit Increase Request. No Lender shall be deemed to have
committed to participate in the Incremental Credit Increase
16
as of the date hereof, nor shall any Lender have any obligation to
participate in any Incremental Credit Increase.
2.5.2. INCREMENTAL CREDIT INCREASE CLOSING. Each financial institution
(other than an existing Lender) participating in the Incremental Credit
Increase, the Borrower and the Administrative Agent shall execute and
deliver a joinder to the Credit Agreement to evidence that such
financial institution has become party to the Credit Agreement as a
Lender and its Commitment in the Incremental Credit Increase. Any
existing Lender providing a Commitment in the Incremental Credit
Increase shall execute and deliver to the Administrative Agent an
appropriate agreement reflecting its increased Commitment. The
Administrative Agent shall make the corresponding adjustments to the
Lenders' respective Percentage Interests under Section 10.1 and the
Register. The obligations of such new Lenders (and any existing
Lenders) participating in the Incremental Credit Increase to make the
extensions of credit pursuant to Section 2.1 shall also be subject to
the satisfaction, on or before the funding of the Incremental Credit
Increase, of such conditions as may be determined by the Administrative
Agent, including the payment of any syndication or closing fees
specified by the Administrative Agent in connection with such
Incremental Credit Increase. Upon such event, the Lenders and the
Borrower shall make any necessary arrangements among themselves so
that, after giving effect to the Incremental Credit Increase, the
364-Day Revolving Loan and the Three-Year Revolving Loan are held by
the Lenders in accordance with their Percentage Interests as then in
effect.
3. INTEREST; EURODOLLAR PRICING OPTIONS; FEES.
3.1. INTEREST. The Loan shall accrue and bear daily interest at a
rate per annum which shall at all times equal the Applicable
Rate. Prior to any stated or accelerated maturity of the Loan,
the Borrower will, on each Payment Date, beginning on the
first Payment Date after the initial Closing Date, pay the
accrued and unpaid interest on the portion of the Loan which
was not subject to a Eurodollar Pricing Option. On the last
day of each Eurodollar Interest Period or on any earlier
termination of any Eurodollar Pricing Option, the Borrower
will pay the accrued and unpaid interest on the portion of the
Loan which was subject to the Eurodollar Pricing Option which
expired or terminated on such date; PROVIDED, HOWEVER, that if
any Eurodollar Interest Period is longer than three months,
the Borrower will also pay the accrued and unpaid interest on
the portion of the Loan subject to the Eurodollar Pricing
Option having such Eurodollar Interest Period at three month
intervals, the first such payment to be made on the last
Banking Day of the three month period which begins on the
first day of such Eurodollar Interest Period. On any stated or
accelerated maturity of the Loan, the Borrower will pay all
accrued and unpaid interest on the Loan, including any accrued
and unpaid interest on such portion of the Loan which is
subject to a Eurodollar Pricing Option. In addition, the
Borrower will, on demand, pay daily interest on any overdue
installments of principal and, to the extent not prohibited by
applicable law, on any overdue installments of interest and
fees owed under any Credit Document at a rate per annum which
is at all times equal to the sum of 2% plus the highest
Applicable Rate then in effect. All payments of interest
hereunder shall be made to the Administrative Agent for the
account of the Lenders in accordance with the Lenders'
respective Percentage Interests.
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3.2. EURODOLLAR PRICING OPTIONS.
3.2.1. EURODOLLAR PRICING OPTIONS. Subject to all the terms and conditions
hereof and so long as no Default exists, the Borrower may from time to
time, by irrevocable notice to the Administrative Agent received not
less than three Banking Days prior to the commencement of the
Eurodollar Interest Period selected in such notice, elect to have such
portion of the Loan as the Borrower may specify in such notice accrue
and bear daily interest during the Eurodollar Interest Period so
selected at the Applicable Rate computed on the basis of the Eurodollar
Rate. No such election shall become effective if, prior to the
commencement of any such Eurodollar Interest Period, the Administrative
Agent determines that (a) the selecting or granting of the Eurodollar
Pricing Option in question would violate a Legal Requirement or
(b) Eurodollar deposits in an amount equal to the portion of the Loan
as to which such Eurodollar Pricing Option has been selected and which
have a term corresponding to the proposed Eurodollar Interest Period
are not readily available in the inter-bank Eurodollar market for
delivery at any Eurodollar Office or, by reason of circumstances
affecting such market, adequate and reasonable methods do not exist for
ascertaining the interest rate applicable to such deposits for the
proposed Eurodollar Interest Period.
3.2.2. NOTICE TO LENDERS AND THE BORROWER. The Administrative Agent
will promptly inform each Lender (by telephone subsequently
confirmed in writing or otherwise) of each notice received by
it from the Borrower pursuant to Section 3.2.1, including the
Eurodollar Interest Period specified in such notice. Upon
determination by the Administrative Agent of the Eurodollar
Rate for such Eurodollar Interest Period or in the event no
such election shall become effective, the Administrative Agent
will promptly notify the Borrower and each Lender (by
telephone subsequently confirmed in writing or otherwise) of
the Eurodollar Rate so determined or why such election did not
become effective.
3.2.3. SELECTION OF EURODOLLAR INTEREST PERIODS. Eurodollar Interest
Periods shall be selected so that:
(a) The minimum portion of the Loan subject to any
Eurodollar Pricing Option shall be $5,000,000 and an integral
multiple of $1,000,000;
(b) No more than 12 Eurodollar Pricing Options shall
be outstanding at any one time; and
(c) No Eurodollar Interest Period with respect to any
portion of the Loan subject to a Eurodollar Pricing Option
shall expire later than the Final Maturity Date for such
portion of the Loan.
3.2.4. ADDITIONAL COMPENSATION. If any portion of the Loan which is subject
to a Eurodollar Pricing Option is repaid, or assigned pursuant to
Sections 3.4.2 or 11.1, or any Eurodollar Pricing Option is terminated
on a date which is prior to the last Banking Day of the Eurodollar
Interest Period applicable to such Eurodollar Pricing Option, the
Borrower will pay to the Administrative Agent for the account of each
Lender, in accordance with
18
the Lenders' respective Percentage Interests, in addition to any
amounts of interest otherwise payable hereunder, an amount equal to
daily interest for the unexpired portion of such Eurodollar Interest
Period on the portion of the Loan so repaid, or as to which a
Eurodollar Pricing Option was so terminated, at a per annum rate equal
to the excess, if any, of (a) the Eurodollar Rate calculated on the
basis of the rate applicable to such Eurodollar Pricing Option MINUS
(b) the rate of interest obtainable by the Administrative Agent upon
the purchase of debt securities customarily issued by the Treasury of
the United States of America which have a maturity date approximating
the last Banking Day of such Eurodollar Interest Period. For purposes
of this Section 3.2.4, if any portion of the Loan which was to have
been subject to a Eurodollar Pricing Option is not outstanding on the
first day of the Eurodollar Interest Period applicable to such
Eurodollar Pricing Option, the Borrower shall be deemed to have
terminated such Eurodollar Pricing Option with respect to such
principal amount. The determination by the Administrative Agent of
such amount of interest shall, in the absence of manifest error, be
conclusive.
3.2.5. CHANGE IN APPLICABLE LAWS, REGULATIONS, ETC. If any Legal
Requirement shall prevent any Lender from funding or
maintaining through the purchase or holding of Eurodollar
deposits any portion of the Loan subject to a Eurodollar
Pricing Option or otherwise from giving effect to such
Lender's obligations as contemplated hereby, (a) the
Administrative Agent may (and, upon the request of the
affected Lender, shall) by notice to the Borrower terminate
all of the affected Eurodollar Pricing Options, (b) the
portion of the Loan subject to such terminated Eurodollar
Pricing Options shall immediately bear interest thereafter at
the Applicable Rate computed on the basis of the Base Rate and
(c) the Borrower shall make any payment required by Section
3.2.4.
3.2.6. FUNDING PROCEDURE. The Lenders may actually fund any portion of the
Loan subject to a Eurodollar Pricing Option in any manner they may
choose in their discretion. Regardless of the manner selected by any
of the Lenders to fund any portion of the Loan subject to a Eurodollar
Pricing Option, however, all amounts payable hereunder, including the
interest rate applicable to any such portion of the Loan and the
amounts payable under Sections 3.2.4, 3.4 and 3.5, shall be computed as
if each Lender had actually funded such Lender's Percentage Interest in
such portion of the Loan through the purchase of deposits in such
amount with a maturity the same as the Eurodollar Interest Period
relating thereto and through the transfer of such deposits from an
office of the Lender having the same location as the applicable
Eurodollar Office to one of such Xxxxxx's offices in the United States
of America.
3.3. COMMITMENT FEES. In consideration of the Lenders' Commitments
to make the extensions of credit provided for in Section 2,
the Borrower will pay to the Administrative Agent for the
account of the Lenders, in accordance with their respective
Percentage Interests, an amount equal to the applicable
Commitment Fee Rate on the amount, if any, by which (a) (i)
the average daily 364-Day Revolving Loan Maximum Amount of
Credit during the three-month period or portion thereof ending
on such date exceeds (ii) the average daily 364-Day Revolving
Loan and (b) (i) the average daily Three-Year Revolving Loan
Maximum Amount of Credit during the three-month period or
portion thereof ending on such date exceeds (ii) the average
daily Three-Year Revolving Loan during such period. Such
commitment fees shall be
19
payable quarterly in arrears on each Payment Date, and on the date of
any termination of the Commitments prior to the Final Maturity Date.
3.4. CAPITAL ADEQUACY; REGULATORY CHANGES.
3.4.1. LENDER'S COMPENSATION. If any Lender shall have determined that
(a) compliance by such Lender with any applicable law, governmental
rule, regulation or order regarding capital adequacy of banks or bank
holding companies, or any interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by
such Lender with any request or directive regarding capital adequacy
(whether or not having the force of law and whether or not failure to
comply therewith would be unlawful) of any such authority, central
bank or comparable agency, has or would have the effect of reducing
the rate of return on such Lender's capital as a consequence of such
Lender's obligations hereunder to a level below that which such Lender
could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's policies with respect to
capital adequacy immediately before such compliance and assuming that
such Lender's capital was fully utilized prior to such compliance) by
any amount deemed by such Lender to be material, or (b) any change in
any Legal Requirement after the date hereof shall directly or
indirectly (i) reduce the amount of any sum received or receivable
by such Lender with respect to the Loan, (ii)impose a cost on such
Lender that is attributable to the making or maintaining of, or such
Lender's commitment to make, its portion of the Loan, or (iii) require
such Lender to make any payment on or calculated by reference to the
gross amount of any amount received by such Lender under any Credit
Document, then, in the case of clause (a) or (b), upon demand by the
Lender so affected, accompanied by the certificate referred to below,
the Borrower shall pay to such Lender from time to time as specified
by such Lender such additional amounts as such Lender determines will
be sufficient to fully compensate such Lender for such reduced return,
reduction, increased cost or payment, each such payment to be made
within 90 days after delivery of such notice. A certificate of an
officer of such Xxxxxx setting forth the amount to be paid to it and
the basis for computation thereof hereunder shall, in the absence of
manifest error, be conclusive. In determining such amount, such
Lender may use any reasonable averaging and attribution methods.
3.4.2. SUBSTITUTION OR REPLACEMENT OF LENDER. If any Lender shall
demand compensation under Section 3.4.1, the Borrower shall
not be obligated to make any payment under Section 3.4.1 if,
within 90 days after delivery of such demand:
(a) The Borrower shall have obtained a substitute Lender (which
may be one or more of the Lenders and which shall be
reasonably satisfactory to the Administrative Agent) to
purchase the portion of the Loan then held by, and to assume
the Commitment of, the Lender demanding compensation. Such
substitution shall be consummated as an assignment, with the
substitute Lender paying to the Lender being replaced the
amount of principal, interest, commitment fees and facility
fees hereunder owed to the Lender being replaced, accrued
through the date of such assignment, and the Borrower paying
to the Lender being replaced
20
all other Credit Obligations (including any amounts due under
Section 3.2.4) owed to the Lender being replaced, accrued
through the date of such assignment; or
(b) The Borrower shall have (i) repaid to the Lender demanding
compensation its Percentage Interest of the Loan, without
premium (but including any repayments required by Section
3.2.4), (ii) repaid to such Lender all other amounts required
by this Agreement, (iii) terminated the Commitment of such
Lender and (iv) reduced the 364-Day Revolving Loan Maximum
Amount of Credit and/or the Three-Year Revolving Loan Maximum
Amount of Credit, as the case may be, then in effect by the
amount of such Xxxxxx's Commitment, at which time the
remaining Lenders' respective Percentage Interests shall be
adjusted accordingly.
3.5. TAXES.
(a) If (i) any Lender shall be subject to any Tax or (ii) the
Borrower shall be required to withhold or deduct any Tax, the
Borrower will on demand by the Administrative Agent (which
demand shall be made by the Administrative Agent upon
request by the affected Lender), accompanied by the
certificate referred to below, pay to the Administrative Agent
for such Xxxxxx's account such additional amount as is
necessary to enable such Lender to receive on an after-Tax
basis the full amount of all payments of principal, interest,
fees, expenses, indemnities and other amounts payable to such
Lender under any Credit Document. Whenever Taxes must be
withheld by the Borrower with respect to any payments of the
Credit Obligations, the Borrower shall promptly furnish to
the Administrative Agent for the account of the applicable
Lender official receipts (to the extent that the relevant
governmental authority delivers such receipts) evidencing
payment of any such Taxes so withheld. If the Borrower fails
to pay any such Taxes when due or fails to remit to the
Administrative Agent for the account of the applicable Lender
the required receipts evidencing payment of any such Taxes so
withheld or deducted, the Borrower shall indemnify the
affected Lender for any incremental Taxes and interest or
penalties that may become payable by such Lender as a result
of any such failure. Each Lender agrees that if, after the
payment by the Borrower of any such additional amount, any
amount identifiable as a part thereof is subsequently
recovered or used as a credit by such Xxxxxx, such Xxxxxx
shall reimburse the Borrower to the extent of the amount so
recovered or used. A certificate of an officer of such
Lender setting forth the amount of such Tax or recovery or
use and the basis therefor shall, in the absence of manifest
error, be conclusive.
(b) If any Lender is not created or organized in, or under the
laws of, the United States of America or any state thereof,
such Lender shall deliver to the Borrower and the Agent such
duly executed forms and statements from time to time as may
be necessary so that such Lender is entitled to receive
payments of the Credit Obligations payable to it without
deduction or withholding of any United States federal income
taxes, to the extent such exemption is available to such
Lender. If no such exemption is available at the time a
Lender becomes party to
21
this Agreement or if at any time the Borrower and the Agent
have not received all forms and statements (including any
renewals thereof) required to be provided by any Lender
pursuant to this paragraph (b), paragraph (a) above shall
not apply with respect to any amount of United States federal
income taxes required to be withheld from payments of the
Credit Obligations to such Lender.
3.6. FEES DUE DATE. If any payment of fees with respect to the Loan
shall become due on any day which is not a Banking Day, then
such fees shall instead be payable on the next succeeding
Banking Day.
3.7. COMPUTATIONS OF INTEREST. For purposes of this Agreement,
interest (and any amount expressed as interest, including
commitment fees under Section 3.3) shall be computed on a
daily basis and (a) for any portion of the Loan subject to a
Eurodollar Pricing Option, on the basis of a 360-day year and
(b) for any other portion of the Loan, or for any other
purpose, on the basis of a 365-day (or if applicable, a
366-day) year.
3.8. MAXIMUM LAWFUL INTEREST RATE. All Credit Documents are
expressly limited so that in no event, including the
acceleration of the maturity of the Credit Obligations, shall
the amount paid or agreed to be paid in respect of interest on
the Credit Obligations (or fees or other amounts deemed
payment for the use of funds) exceed the maximum permissible
amount under applicable law, as in effect on the date hereof
and as subsequently amended or modified to allow a greater
amount of interest (or fees or other amounts deemed payment
for the use of funds) to be paid under the Credit Documents.
If for any reason the amount in respect of interest (or fees
or other amounts deemed payment for the use of funds) required
by the Credit Documents exceeds such maximum permissible
amount, the obligation to pay interest under the Credit
Documents (or fees or other amounts deemed payment for the use
of funds) shall be automatically reduced to such maximum
permissible amount and any amounts in respect of interest (or
fees or other amounts deemed payment for the use of funds)
previously paid to the Lenders in excess of such maximum
permissible amount shall be automatically applied to reduce
the amount of the Loans.
4. PAYMENT.
4.1. PAYMENT AT MATURITY. On the stated or any accelerated maturity
of the Revolving Notes, the Borrower will pay to the
Administrative Agent for the account of each Lender an amount
equal to the Loan then due, together with all accrued and
unpaid interest thereon and all other Credit Obligations then
outstanding.
4.2. MANDATORY PREPAYMENTS. If at any time the 364-Day Revolving
Loan exceeds the 364-Day Revolving Loan Maximum Amount of
Credit, the Borrower shall within one Banking Day pay the
amount of such excess to the Administrative Agent as a
prepayment of the 364-Day Revolving Loan. If at any time the
Three-Year Revolving Loan exceeds the Three-Year Revolving
Loan Maximum Amount of Credit, the Borrower shall within one
Banking Day pay the amount of such excess to the
Administrative Agent as a prepayment of the Three-Year
Revolving Loan.
22
4.3. VOLUNTARY PREPAYMENTS OF LOAN. In addition to the prepayments
required by Section 4.2, the Borrower may from time to time
prepay all or any portion of the Loan (in a minimum amount of
$1,000,000 and an integral multiple of $1,000,000), without
premium (except as provided in Section 3.2.4 with respect to
Eurodollar Pricing Options). The Borrower shall give the
Administrative Agent at least one Banking Day's prior notice
of its intention to prepay (three Banking Days' notice if any
such portion of the Loan to be prepaid is subject to a
Eurodollar Pricing Option), specifying the date of payment,
the total principal amount of the Loan to be paid on such
date, the portion of the Loan to be paid (364-Day Revolving
Loan or Three-Year Revolving Loan) and the amount of interest
to be paid with such prepayment.
4.4. REBORROWING. The amounts of the Loan prepaid pursuant to
Section 4.3 may be reborrowed from time to time prior to the
Final Maturity Date in accordance with Section 2.1.
4.5. APPLICATION OF PAYMENTS. Any prepayment of the Loan shall be
applied (pro rata in accordance with the Lenders' respective
Percentage Interests) first to the portion of the Loan not
then subject to Eurodollar Pricing Options, then the balance
of any such prepayment shall be applied to the portion of the
Loan then subject to Eurodollar Pricing Options, beginning
with the Eurodollar Interest Period with the earliest
expiration date and proceeding thereafter in chronological
order of the expiration dates of the respective Eurodollar
Interest Periods, together with any payments required by
Section 3.2.4. All payments of principal hereunder shall be
made to the Administrative Agent for the account of each
Lender, in accordance with the Lenders' respective Percentage
Interests.
4.6. PAYMENT. Notice of prepayment having been given in accordance
with Section 4.3, and whether or not notice is given of
prepayments pursuant to Section 4.2, the amount specified to
be prepaid shall become due and payable on the date specified
for prepayment.
5. CONDITIONS TO EXTENDING CREDIT.
5.1. CONDITIONS ON RESTATEMENT CLOSING DATE. The obligations of the
Lenders to make any extension of credit pursuant to Section
2.1 shall be subject to the satisfaction, on or before the
Restatement Closing Date, of the conditions set forth in this
Section 5.1, as well as the further conditions in Section 5.2:
5.1.1. REVOLVING NOTES. The Borrower shall have executed the
Revolving Notes and delivered them to the Administrative
Agent.
5.1.2. SUBORDINATION AGREEMENT. Each of the Borrower's Subsidiaries
and Affiliates to which the Borrower has any Indebtedness in
excess of $5,000,000 shall have duly authorized, executed and
delivered to the Administrative Agent an agreement (as from
time to time in effect, the "SUBORDINATION AGREEMENT") in the
form of Exhibit 5.1.2, pursuant to which each such Subsidiary
or Affiliate shall unconditionally subordinate any
Indebtedness owed to it by the Borrower to the prior payment
in full of the Credit Obligations.
23
5.1.3. MERGER INTO BORROWER. All conditions precedent to the
effectiveness of the Amended and Restated Merger Agreement
dated as of October 1, 2003 between AFC, AFC Holding and the
Borrower, which provides for AFC and AFC Holding to merge with
and into the Borrower on terms and in a manner reasonably
satisfactory to the Required Lenders, shall have been
satisfied and AFC and AFC Holding shall have merged into the
Borrower on such terms.
5.1.4. PAYMENT OF FEES. The Borrower shall have paid to (a) the
Administrative Agent the fees contemplated by the separate
agreement between the Borrower and the Administrative Agent
dated on or prior to the date hereof, and (b) the
Administrative Agent for the account of the Lenders, in
accordance with their respective Percentage Interests, a
closing fee in the amounts previously agreed to among the
Borrower and the Lenders.
5.1.5. PRO FORMA COVENANT COMPLIANCE. The Administrative Agent shall
be satisfied, in its reasonable discretion, that the Borrower
is in compliance with the covenants contained in Sections 6.6
and 6.7.1 on the Restatement Closing Date, based upon the
Borrower's financial statements as of September 30, 2003.
5.1.6. LEGAL OPINIONS. The Lenders shall have received from the
following counsel, hereby authorized and directed by the
Borrower with respect to their counsel, their respective
opinions with respect to the transactions contemplated by the
Credit Documents, which opinions shall be in form and
substance satisfactory to the Lenders:
(a) Xxxxxxx, Xxxxxxxx & Xxxxxxx, counsel for the Borrower; and
(b) Ropes & Gray, special counsel for the Administrative Agent.
5.2. CONDITIONS TO EACH EXTENSION OF CREDIT. The obligations of the
Lenders to make any extension of credit pursuant to Section 2
shall be subject to the satisfaction, on or before the Closing
Date for such extension of credit, of the conditions set forth
in this Section 5.2.
5.2.1. OFFICER'S CERTIFICATE. The representations and warranties of
the Borrower contained in Section 7 shall be true and correct
on and as of each Closing Date with the same force and effect
as though originally made on and as of such date; no Default
shall exist on such Closing Date or will exist after giving
effect to the requested extension of credit; as of such
Closing Date, no Material Adverse Change shall have occurred;
and the Borrower shall have furnished to the Administrative
Agent on such Closing Date a certificate to these effects, in
substantially the form of Exhibit 5.2.1, signed by a Financial
Officer of the Borrower.
5.2.2. LEGALITY, ETC. The making of the requested extension of credit
shall not (a) subject any Lender to any penalty or special tax
(other than a Tax for which the Borrower has reimbursed the
Lenders under Section 3.5), (b) be prohibited by any law or
governmental order or regulation applicable to any Lender or
(c) violate any voluntary credit restraint program of the
executive branch of the government of the United States of
America, the Board of Governors of the Federal Reserve System
or any other
24
governmental or administrative agency so long as any Lender
reasonably believes that compliance therewith is in the best
interests of such Lender.
5.2.3. GENERAL. All legal and corporate proceedings in connection
with the transactions contemplated by this Agreement and each
other Credit Document shall be satisfactory in form and
substance to the Administrative Agent, and the Lenders shall
have received copies of all documents, including records of
corporate proceedings and opinions of counsel, which any
Lender may have reasonably requested in connection therewith,
such documents where appropriate to be certified by proper
corporate or governmental authorities.
6. GENERAL COVENANTS. The Borrower covenants that, until all of
the Credit Obligations shall have been paid in full and until
the Lenders' Commitments to extend credit under this Agreement
and any other Credit Document shall have been irrevocably
terminated, the Borrower and its Subsidiaries will comply with
the following provisions:
6.1. TAXES AND OTHER CHARGES; ACCOUNTS PAYABLE.
6.1.1. TAXES AND OTHER CHARGES. The Borrower and its Subsidiaries will duly
pay and discharge, or cause to be paid and discharged, before the
same shall become in arrears, all taxes, assessments and other
governmental charges imposed upon such Person and its properties,
sales or activities, or upon the income or profits therefrom, as well
as all claims for labor, materials or supplies which if unpaid might
by law become a Lien upon any of its property; PROVIDED, HOWEVER,
that any such tax, assessment, charge or claim need not be paid if
the validity or amount thereof shall at the time be contested in good
faith by appropriate proceedings and if such Person shall, in
accordance with GAAP, have set aside on its books adequate reserves
with respect thereto; and PROVIDED, FURTHER, that the Borrower and
each of its Subsidiaries will pay or bond all such taxes, assessments,
charges or other governmental claims immediately upon the commencement
of proceedings to foreclose any Lien which may have attached as
security therefor (except to the extent such proceedings have been
dismissed or stayed).
6.1.2. ACCOUNTS PAYABLE. Each of the Borrower and its Subsidiaries
will promptly pay when due, or in conformity with customary
trade terms, all other Indebtedness incident to the operations
of such Person; PROVIDED, HOWEVER, that any such Indebtedness
need not be paid if the validity or amount thereof shall at
the time be contested in good faith by appropriate proceedings
and if such Person shall, in accordance with GAAP, have set
aside on its books adequate reserves with respect thereto.
6.2. CONDUCT OF BUSINESS, ETC.
6.2.1. TYPES OF BUSINESS. The Borrower and its Subsidiaries will
engage in no businesses other than the businesses now
conducted by the Borrower and its Subsidiaries and Affiliates
as described in the Annual Report of the Borrower on Form 10-K
for the fiscal year ended December 31, 2002 and businesses
reasonably related thereto.
6.2.2. MAINTENANCE OF PROPERTIES. Each of the Borrower and its
Subsidiaries:
25
(a) will keep its properties in such repair, working order and
condition, and will from time to time make such repairs,
replacements, additions and improvements thereto for the
efficient operation of its businesses and will comply at all
times in all material respects with all franchises, licenses,
leases and other material agreements to which it is party so
as to prevent any loss or forfeiture thereof or thereunder,
unless compliance is at the time being contested in good faith
by appropriate proceedings or unless such losses or
forfeitures have not resulted, or do not pose a material risk
of resulting, in the aggregate in any Material Adverse Change;
and
(b) except to the extent permitted under Section 6.12, will do all
things necessary to preserve, renew and keep in full force and
effect and in good standing its legal existence and authority
necessary to continue its business.
6.2.3. STATUTORY COMPLIANCE. Each of the Borrower and its
Subsidiaries will comply in all material respects with all
valid and applicable statutes, laws, ordinances, zoning and
building codes and other rules and regulations of the United
States of America, of the states and territories thereof and
their counties, municipalities and other subdivisions and of
any foreign country or other jurisdictions applicable to such
Person, except where compliance therewith shall at the time be
contested in good faith by appropriate proceedings or where
failure so to comply has not resulted, or does not pose a
material risk of resulting, in the aggregate in any Material
Adverse Change.
6.3. TRANSACTIONS WITH AFFILIATES. Except as set forth on Exhibit
6.3, neither the Borrower nor any of its Subsidiaries shall
effect any transaction with any Affiliate (other than the
Borrower or any of its Subsidiaries) on a basis less favorable
to the Borrower or any such Subsidiary than would be the case
if such transaction had been effected with a non-Affiliate,
other than transactions not involving more than $10,000,000
per year in the aggregate.
6.4. INSURANCE. Each of the Borrower and its Subsidiaries will
maintain with financially sound and reputable insurers,
insurance against hazards and risks and liability to persons
and property to the extent and in the manner customary for
companies in similar businesses similarly situated; provided,
however, that it may effect worker's compensation insurance or
similar coverage with respect to operations in any particular
state or other jurisdiction through an insurance fund operated
by such state or jurisdiction or by meeting the self-insurance
requirements of such state or jurisdiction.
6.5. FINANCIAL STATEMENTS AND REPORTS. Each of the Borrower and its
Subsidiaries will maintain a system of accounting in which
full and correct (in all material respects) entries will be
made of all transactions in relation to their business and
affairs in accordance with GAAP. The fiscal year of the
Borrower and its Subsidiaries will end on December 31 in each
year.
6.5.1. ANNUAL REPORTS. The Borrower will furnish to the Lenders as soon
as available, and in any event within 120 days after the end of each
fiscal year:
26
(a) The Annual Report of the Borrower as required by the Exchange
Act on Form 10-K for such fiscal year.
(b) The audited Consolidated financial statements of the Borrower
and its Subsidiaries as at the end of such fiscal year (all in
reasonable detail), together with comparative figures for the
preceding fiscal year.
(c) Unqualified reports of the present independent auditors of the
Borrower and its Subsidiaries (or other independent auditors
reasonably satisfactory to the Administrative Agent),
containing no material uncertainty, to the effect that they
have audited such Consolidated financial statements in
accordance with generally accepted auditing standards and that
such Consolidated financial statements present fairly, in all
material respects, the financial position of the Borrower and
its Subsidiaries at the dates thereof and the results of their
operations for the periods covered thereby in conformity with
GAAP.
(d) The statement of such accountants that they have caused this
Agreement to be reviewed and that in the course of their audit
of the Borrower and its Subsidiaries no facts have come to
their attention that cause them to believe that any Default
exists and in particular that they have no knowledge of any
Default under Sections 6.6 through 6.14 or, if such is not the
case, specifying such Default and the nature thereof, it being
understood that the examination by such accountants cannot be
relied upon to give such accountants knowledge of any such
Default except as it relates to accounting or auditing matters
within the scope of their audit.
(e) The internally prepared Consolidating balance sheet of the
Borrower and its Subsidiaries and the Consolidating statement
of earnings of the Borrower and its Subsidiaries for such
fiscal year (all in reasonable detail).
(f) A certificate of a Financial Officer of the Borrower to the
effect that such officer has caused this Agreement to be
reviewed and has no knowledge of any Default, or if such
officer has such knowledge, specifying such Default and the
nature thereof, and what action the Borrower has taken, is
taking or proposes to take with respect thereto, and stating
what changes, if any, have occurred in GAAP since the date of
the financial statements described in Section 7.2(a).
(g) Computations by the Borrower demonstrating or specifying, as
the case may be, as of the close of such fiscal year,
compliance with Sections 6.6, 6.7.1, 6.8.2, 6.8.3 and 6.11.4.
(h) Supplements to Exhibits 7.1, 7.11 and 7.13 showing any changes
in the information set forth in such Exhibits during the last
quarter of such fiscal year, each of which changes must be
reasonably satisfactory to the Administrative Agent, as well
as any changes in the Charter, By-laws or incumbency of
officers of the Borrower or any of its Subsidiaries from those
previously certified to the Administrative Agent.
27
6.5.2. QUARTERLY REPORTS. The Borrower will furnish to the Lenders as
soon as available and, in any event, within 60 days after the
end of each of the first three fiscal quarters of the Borrower
in each fiscal year:
(a) The Quarterly Reports of the Borrower as required by the
Exchange Act on Form 10-Q for such fiscal quarter.
(b) The internally prepared Consolidated financial statements of
the Borrower and its Subsidiaries as of the end of such fiscal
quarter and for the portion of the fiscal year then ending
(all in reasonable detail), together with comparative figures
for the same period in the preceding fiscal year.
(c) The internally prepared Consolidating balance sheet of the
Borrower and its Subsidiaries and the Consolidating statement
of earnings of the Borrower and its Subsidiaries for such
fiscal quarter and for such portion of the fiscal year (all in
reasonable detail).
(d) A certificate of a Financial Officer of the Borrower to the
effect that (i) such officer has caused this Agreement to be
reviewed and has no knowledge of any Default, or if such
officer has such knowledge, specifying such Default and the
nature thereof and what action the Borrower has taken, is
taking or proposes to take with respect thereto and (ii) such
financial statements have been prepared in accordance with
GAAP (subject to year-end audit adjustments and the addition
of footnotes for interim statements) and present fairly, in
all material respects, the financial position of the Borrower
and its Subsidiaries, covered thereby at the dates thereof and
the results of their operations for the periods covered
thereby.
(e) Computations by the Borrower demonstrating or specifying, as
the case may be, as of the close of such quarter, compliance
with Sections 6.6, 6.7.1, 6.8.2, 6.8.3 and 6.11.4.
(f) Supplements to Exhibits 7.1, 7.11 and 7.13 showing any changes
in the information set forth in such Exhibits during such
fiscal quarter, each of which changes must be reasonably
satisfactory to the Administrative Agent, as well as any
changes in the Charter, By-laws or incumbency of officers of
any of the Borrower and its Subsidiaries from those previously
certified to the Administrative Agent.
6.5.3. OTHER REPORTS. The Borrower will furnish to the Lenders as soon as
available copies of:
(a) cash flow work sheets for the portion of the fiscal year then
ended or for such fiscal year, as the case may be (including
inter-company transactions involving cash and marketable
securities) for the Borrower (all in reasonable detail);
provided, however, that such work sheets shall in any event be
furnished to the Lenders within 90 days after the end of each
of the first three fiscal quarters and 150 days after the end
of each fiscal year of the Borrower;
28
(b) all quarterly and annual statutory financial statements,
including all exhibits and schedules thereto, registration
statements and other reports of the Insurance Subsidiaries and
IPC and its Subsidiaries; and
(c) all registration statements, proxy statements, financial
statements and reports, including reports on Form 8-K, as may
be filed with the Securities and Exchange Commission by the
Borrower, as the Administrative Agent may request from time to
time.
6.5.4. NOTICE OF MATERIAL LITIGATION; NOTICE OF DEFAULTS. The
Borrower will promptly furnish to the Lenders notice of the
occurrence of any litigation or any administrative or
arbitration proceeding to which the Borrower or any of its
Subsidiaries may hereafter become a party which may involve
any material risk of resulting in a Material Adverse Change or
which questions the validity or enforceability of any Credit
Document. Promptly upon acquiring knowledge thereof, the
Borrower will notify the Lenders of the existence of any
Default, specifying the nature thereof and what action the
Borrower has taken, is taking or proposes to take with respect
thereto.
6.5.5. ERISA REPORTS. The Borrower will:
(a) Furnish the Lenders with a copy of any request for a waiver of
the funding standards or an extension of the amortization
period required by sections 303 and 304 of ERISA or section
412 of the Code, promptly after any ERISA Group Member submits
such request to the Department of Labor or the Internal
Revenue Service.
(b) Notify the Lenders of any reportable event (as defined in
section 4043 of ERISA), unless the notice requirement with
respect thereto has been waived by regulation, promptly after
any ERISA Group Member learns of such reportable event; and
furnish the Lenders with a copy of the notice of such
reportable event required to be filed with the PBGC, promptly
after such notice is required to be given.
(c) Furnish the Lenders with a copy of any notice received by any
ERISA Group Member that the PBGC has instituted or intends to
institute proceedings under section 4042 of ERISA to terminate
any Plan, or that any Multiemployer Plan is insolvent or in
reorganization status under Title IV of ERISA, promptly after
receipt of such notice.
(d) Notify the Lenders of the possibility of the termination of
any Plan by its administrator pursuant to section 4041 of
ERISA, as soon as any ERISA Group Member learns of such
possibility and in any event prior to such termination; and
furnish the Lenders with a copy of any notice to the PBGC that
a Plan is to be terminated, promptly after any ERISA Group
Member files a copy of such notice.
(e) Notify the Lenders of the intention of any ERISA Group Member
to withdraw, in whole or in part, from any Multiemployer Plan
which may result in
29
the incurrence by the Borrower or any of its Subsidiaries
of withdrawal liability in excess of $10,000,000 under
Subtitle E of Title IV of ERISA, or of the termination,
insolvency or reorganization status of any Multiemployer
Plan under such Subtitle E which may result in liability
to the Borrower or any of its Subsidiaries in excess of
$10,000,000 and, upon any Lender's request from time to
time, of the extent of the liability, if any, of such Person
as a result of such withdrawal, to the best of such Person's
knowledge at such time.
6.5.6. OTHER INFORMATION. From time to time upon request of any
authorized officer of any Lender, the Borrower will furnish to
such Lender such other information regarding the business,
affairs and financial condition of the Borrower or any of its
Subsidiaries as such officer may reasonably request. The
Administrative Agent's authorized officers and representatives
shall have the right during normal business hours to examine
the books and records of the Borrower or any of its
Subsidiaries, to make copies, notes and abstracts therefrom
and to make an independent examination of its books and
records, for the purpose of verifying the accuracy of the
reports delivered by the Borrower or any of its Subsidiaries
pursuant to this Section 6.5 or otherwise and ascertaining
compliance with this Agreement.
6.6. CERTAIN FINANCIAL TESTS.
6.6.1. NET WORTH. On the last day of each fiscal quarter, Net Worth
shall be equal to or greater than $1,336,063,000; PROVIDED,
HOWEVER, that such minimum dollar amount shall be increased by
an amount equal to 50% of all deferred tax liabilities
recovered by the Borrower to the extent such deferred tax
liabilities recovered have not otherwise increased the Net
Income of the Borrower; and PROVIDED, FURTHER, that on the
first day of each fiscal quarter of the Borrower after the
date hereof, such minimum dollar amount then in effect shall
be increased by an amount equal to the excess, if any, of (a)
50% of Net Income for the fiscal quarter of the Borrower then
most recently ended MINUS (b) cash dividends actually paid by
the Borrower during such fiscal quarter.
6.6.2. GAIC STATUTORY SURPLUS. On the last day of each fiscal quarter, the
Borrower will cause GAIC to maintain its "surplus as regards
policyholders" (currently line 35, page 3 in the National Association
of Insurance Commissioners form of statutory annual financial statement)
(as computed by the applicable Insurance Authorities in Ohio) in an
amount equal to or greater than $904,058,000; PROVIDED, HOWEVER, that
on the first day of each fiscal quarter of the Borrower after the date
hereof, such minimum dollar amount then in effect shall be increased
by an amount equal to the excess, if any, of (a) 50% of "statutory
net income" (currently line 20, page 4 in the National Association
of Insurance Commissioners form of statutory annual financial statement)
(as computed by the applicable Insurance Authorities in Ohio) of GAIC
MINUS (b) dividends actually paid by GAIC (other than dividends
constituting additional capital stock of GAIC) during such fiscal
quarter.
6.6.3. MINIMUM GAIC RISK BASED CAPITAL RATIO. On the last day of each
fiscal quarter, the Borrower will cause GAIC to maintain a
"risk based capital ratio" (as defined
30
by the National Association of Insurance Commissioners) (as computed
by the applicable Insurance Authorities in Ohio) equal to or greater
than 275%.
6.6.4. MAXIMUM DIVIDENDS TO INTEREST AND DIVIDEND CHARGES. For each
period of four consecutive fiscal quarters of the Borrower:
(a) the greatest of:
(i) 10% of "surplus as regards policyholders" (currently line 35,
page 3 in the National Association of Insurance Commissioners
form of statutory annual financial statement)(as computed by
the applicable Insurance Authorities) of the Insurance
Subsidiaries owned directly by any Holding Company as of the
end of the then most recently completed fiscal year of the
Borrower,
(ii) 100% of the "statutory net income" (currently line 20, page 4
in the National Association of Insurance Commissioners form of
statutory annual financial statement) (as computed by the
applicable Insurance Authorities) of the Insurance
Subsidiaries owned directly by any Holding Company for the
then most recently completed fiscal year of the Borrower or
(iii) the amount of cash dividends actually paid by the Insurance
Subsidiaries and received by any Holding Company during such
period of four consecutive fiscal quarters, shall exceed
(b) 200% of Interest and Dividend Charges for such period of four
consecutive fiscal quarters.
6.6.5. RATIO OF EARNINGS TO FIXED CHARGES. For each period of four
consecutive fiscal quarters of the Borrower, the Borrower's
"earnings" (as computed in accordance with section 503(d) of
Regulation SK under the Securities Act and as applied in Item
6 - "Selected Financial Data (excluding annuity benefits)" of
the Borrower's 2002 Form 10-K) shall equal or exceed 150% of
the Borrower's "fixed charges" (as computed in accordance with
section 503(d) of Regulation SK under the Securities Act and
as applied in Item 6 - "Selected Financial Data (excluding
annuity benefits)" of the Borrower's 2002 Form 10-K).
6.7. RESTRICTIONS ON INDEBTEDNESS.
6.7.1. INDEBTEDNESS. On the last day of each fiscal quarter, Total Financing
Debt shall not exceed 36% of Total Capitalization.
6.7.2. ADDITIONAL DEBT SUBORDINATION. The Borrower shall not create,
incur, suffer or permit to exist any Indebtedness of the
Borrower to any Affiliate of the Borrower except (a)
Indebtedness which is subordinated on terms substantially
similar to the manner in which the Borrower's Indebtedness to
its Affiliates is subordinated under the Subordination
Agreement, (b) public Indebtedness held from time to time by
an Affiliate,
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and (c) Indebtedness evidenced by the Subordinated Debentures and
the Capital Trust Securities.
6.8. RESTRICTIONS ON LIENS. Neither the Borrower nor any of its
Subsidiaries shall create, incur or enter into, or suffer to
be created or incurred or to exist, any Lien except the
following:
6.8.1. Any Liens from time to time securing the Credit Obligations.
6.8.2. Liens on assets of the Borrower and its Subsidiaries (other
than the stock of GAIC), so long as no Default exists either
before or immediately after giving effect to the creation of
such security interests; PROVIDED, HOWEVER, that the aggregate
amount of Indebtedness of the Borrower at any one time
outstanding which is secured by the Liens permitted under
Sections 6.8.2 and 6.8.3 shall not exceed $25,000,000.
6.8.3. Purchase money Liens (including mortgages, conditional sales,
Capitalized Leases and any other title retention or deferred purchase
devices) on property of the Borrower or any of its Subsidiaries
existing or created at the time of acquisition thereof, and the
extension and refunding of any such Lien in an amount not exceeding
the amount thereof remaining unpaid immediately prior to such extension
or refunding; PROVIDED, HOWEVER, that (a) the principal amount of
Indebtedness (including Indebtedness in respect of Capitalized Lease
Obligations) secured by each such security interest in each item of
property shall not exceed the fair market value (including all such
Indebtedness secured thereby, whether or not assumed) of the item
subject thereto and (b) the aggregate amount of Indebtedness of the
Borrower and its Subsidiaries at any one time outstanding which is
secured by the Liens permitted under Sections 6.8.2 and 6.8.3 shall
not exceed $25,000,000.
6.9. RESTRICTIONS ON DISTRIBUTIONS. Neither the Borrower nor any of
its Subsidiaries shall make any Distribution unless no Default
exists both before and immediately after giving effect to such
Distribution on a pro forma basis. Notwithstanding the
foregoing, regardless of whether a Default then exists, (a)
Subsidiaries of the Borrower may make Distributions to the
Borrower and (b) any Subsidiary of the Borrower may make
Distributions to any other Subsidiaries of the Borrower.
6.10. RESTRICTIONS ON INVESTMENTS. Neither the Borrower nor any of
its Subsidiaries shall make any Investment unless no Default
exists both before and immediately after giving effect to such
Investment on a pro forma basis. Notwithstanding the
foregoing, if a Default shall exist (a) any Subsidiary of the
Borrower may make Investments in the Borrower, (b) any
Subsidiary of the Borrower may make Investments in any other
Subsidiary of the Borrower and (c) the Borrower may make
Investments in any of its Subsidiaries, provided that such
Subsidiary shall not then have outstanding any Financing Debt.
6.11. MERGER, CONSOLIDATION AND SALE OF ASSETS. None of the Borrower
or any of its Subsidiaries will become party to any merger or
consolidation or sell, sell and lease back, lease, sublease or
otherwise dispose of any assets, except that, so long as
immediately before and after giving effect thereto no Default
shall exist:
32
6.11.1. The Borrower may become party to any merger or consolidation
of which the Borrower is the surviving or resulting Person if,
after giving effect thereto:
(a) the Borrower continues to own directly or indirectly 100%
of the voting common stock of GAIC, and
(b) the Borrower demonstrates to the Administrative Agent, on a
pro forma basis immediately after giving effect to the
consummation of such transaction, compliance with Sections 6.6
and 6.7.
6.11.2. Any Subsidiary of the Borrower may be merged into or
consolidated with, or may sell, lease or otherwise dispose of
any of its assets to, the Borrower or any of its Subsidiaries;
PROVIDED, HOWEVER, that:
(a) in any such merger or consolidation involving the Borrower,
the Borrower shall be the surviving or resulting Person and
the Borrower and its Subsidiaries shall execute and deliver
such documents and take such other action as the
Administrative Agent may reasonably request;
(b) in any such merger or consolidation involving GAIC, GAIC shall
be the surviving or resulting Person and
(c) in any such merger or consolidation involving the combination
of one Insurance Subsidiary with any other Insurance
Subsidiary, the maximum amount of statutory dividends payable
by the surviving or resulting Person in the year following
completion of such merger or consolidation shall be at least
90% of the amount of statutory dividends payable by such
constituent Persons in the year immediately prior to such
merger or consolidation.
6.11.3. The Borrower and its Subsidiaries may dispose of assets in the
ordinary course of business that are no longer used or useful
in such business.
6.11.4. The Borrower and its Subsidiaries may from time to time sell
or dispose of assets (other than stock of GAIC) on arm's
length terms; PROVIDED, HOWEVER, that:
(a) the net book value, determined in accordance with GAAP, of the
assets sold pursuant to this Section 6.11.4 shall not exceed
on a cumulative basis 15% of the net book value of all assets
of the Borrower and its Subsidiaries as of December 31, 2002
(excluding IPC on a pro forma basis), provided that, for
purposes of this clause (a), the net book value of assets sold
shall not include (i) sales and dispositions of assets among
the Borrower and its Subsidiaries, (ii) sales and dispositions
of portfolio assets among the Borrower and its Subsidiaries,
and (iii) sales and dispositions of portfolio assets of the
Borrower and its Subsidiaries in the ordinary course of
business and
(b) the assets sold pursuant to this Section 6.11.4 shall not have
contributed revenue, determined in accordance with GAAP, over
the period of four fiscal quarters prior to the respective
sales exceeding 15% of the revenue of the
33
Borrower and its Subsidiaries for the four fiscal quarters
ended December 31, 2002 (excluding IPC on a pro forma basis).
6.12. ISSUANCE OF EQUITY BY SUBSIDIARIES; SUBSIDIARY DISTRIBUTIONS.
6.12.1. ISSUANCE OF EQUITY BY SUBSIDIARIES. The Subsidiaries of the
Borrower shall not issue or sell any shares of their capital
stock or other evidence of equity or beneficial ownership
other than (a) shares issued to the Borrower or any wholly
owned Subsidiary of the Borrower; (b) shares issued by GAFR or
National Interstate for fair value in compliance with
applicable securities laws so long as the issuer in question
remains a Subsidiary following such issuance; and (c) Capital
Trust Securities (i) issued to refinance Capital Trust
Securities outstanding as of the date hereof or (ii) issued by
American Financial Capital Trust I or any other trust or
similar entity, the proceeds of which are invested by such
Person in an equivalent amount of Subordinated Debentures
issued by GAFR.
6.12.2. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. Except for this
Agreement and the other Credit Documents, neither the Borrower
nor any of its Subsidiaries shall enter into or be bound by
any agreement (including covenants requiring the maintenance
of specified amounts of net worth or working capital)
restricting the right of any Subsidiary to make Distributions
or extensions of credit to the Borrower (directly or
indirectly through another Subsidiary).
6.13. NEGATIVE PLEDGE CLAUSES. Neither the Borrower nor any of its
Subsidiaries shall enter into any agreement, instrument, deed
or lease which prohibits or limits the ability of the Borrower
or any of its Subsidiaries to create, incur, assume or suffer
to exist any Lien upon any of their respective properties,
assets or revenues, whether now owned or hereafter acquired,
or which requires the grant of any collateral for such
obligation if collateral is granted for another obligation,
except the following:
6.13.1. This Agreement and the other Credit Documents.
6.13.2. Covenants in documents creating Liens permitted by Sections
6.8.2 and 6.8.3 prohibiting further Liens on the assets
encumbered thereby.
6.14. COMPLIANCE WITH XXXXX. The Borrower will cause all ERISA Group
Members to meet all minimum funding requirements applicable to
them with respect to any Plan pursuant to section 302 of ERISA
or section 412 of the Code, without giving effect to any
waivers of such requirements or extensions of the related
amortization periods which may be granted. Each Plan
maintained from time to time will be a qualified plan under
section 401(a) of the Code and will comply in all material
respects with the provisions of ERISA and the Code applicable
to each Plan. At no time shall the Accumulated Benefit
Obligations under any Plan that is not a Multiemployer Plan
exceed the fair market value of the assets of such Plan
allocable to such benefits by more than $10,000,000.
6.15. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will, and
will cause each of its Subsidiaries to, use and operate all of
its facilities and properties in material compliance with all
Environmental Laws, keep all necessary permits, approvals,
certificates,
34
licenses and other authorizations relating to environmental matters
in effect and remain in material compliance therewith.
7. REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders
to extend credit to the Borrower hereunder, the Borrower
represents and warrants that:
7.1. ORGANIZATION AND BUSINESS.
7.1.1. THE BORROWER. The Borrower is a duly organized and validly
existing corporation, in good standing under the laws of the
State of Ohio, with all power and authority, corporate or
otherwise, necessary to (a) enter into and perform this
Agreement and each other Credit Document to which it is party
and to make any borrowings hereunder and (b) own its
properties and carry on the business now conducted or proposed
to be conducted by it. The Borrower has taken all corporate
action required to execute, deliver and perform this Agreement
and each other Credit Document to which it is party and to
make any borrowings hereunder. Certified copies of the Charter
and By-laws of the Borrower have been previously delivered to
the Administrative Agent and are correct and complete.
7.1.2. SUBSIDIARIES. Exhibit 7.1, as supplemented from time to time
in accordance with Sections 6.5.1 and 6.5.2, sets forth the
name, jurisdiction of organization and ownership of each of
the Borrower's Subsidiaries whose total assets (after
intercompany eliminations) exceed 10% of the total assets of
the Borrower and its Subsidiaries Consolidated as of the end
of the most recently completed fiscal year. Each such
Subsidiary is a duly organized and validly existing
corporation, in good standing under the laws of the
jurisdiction of its incorporation, with all power and
authority, corporate or otherwise, necessary to own its
properties and carry on the business now conducted or proposed
to be conducted by it.
7.1.3. QUALIFICATION. Except as set forth on Exhibit 7.1, as
supplemented from time to time in accordance with Sections
6.5.1 and 6.5.2, the Borrower and each of its Subsidiaries is
duly and legally qualified to do business as a foreign
corporation and is in good standing in each state or
jurisdiction in which such qualification is required and is
duly authorized, qualified and licensed under all laws,
regulations, ordinances or orders of public authorities, or
otherwise, to carry on its business in the places and in the
manner in which it is conducted, except for failures to be so
qualified, authorized or licensed which would not in the
aggregate result, or create a material risk of resulting, in
any Material Adverse Change.
7.2. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Borrower has
previously furnished to the Lenders copies of the following:
(a) The audited Consolidated financial statements of the Borrower
and AFC and their respective Subsidiaries as at December 31,
2001 and December 31, 2002, accompanied by reports of each of
the Borrower's and AFC's independent auditors;
35
(b) The Annual Reports of the Borrower and AFC on Form 10-K for
the fiscal year ended December 31, 2002 (the
"2002 FORM 10-K");
(c) The Quarterly Reports of the Borrower and AFC on Form 10-Q for
the fiscal quarters ended March 31, 2003 and June 30, 2003;
and
(d) The March 31, 2003 and June 30, 2003 statutory financial
statements of GAIC, GALIC and RICA.
The financial statements (including the notes thereto) referred to in
clauses (a), (b) and (c) above have been prepared in accordance with GAAP, and
the financial statements (including the notes thereto) referred to in clause (d)
above have been prepared in accordance with applicable statutory accounting
principles (in each case, subject to year-end audit adjustments and the absence
of footnotes for interim statements) and the financial statements (including the
notes thereto) referred to in clauses (a), (b) and (c) above fairly present the
financial condition of the Persons covered thereby at the dates thereof and the
results of their operations for the periods covered thereby, and the financial
statements (including the notes thereto) referred to in clause (d) above present
the financial condition of the Persons covered thereby at the dates thereof and
the results of their operations for the periods covered thereby in compliance
with applicable statutory regulations and guidelines. Neither the Borrower nor
any of its Subsidiaries has any known material contingent liabilities which are
not referred to in said financial statements or in the notes thereto.
The 2002 Form 10-K (including all of the financial statements and
schedules included therein) contains all information which is required to be
stated therein in accordance with the Exchange Act, and conforms in all material
respects to the requirements thereof; and the 2002 Form 10-K did not when filed
include any untrue statement of a material fact or omit to state a material fact
which was required to be stated therein or was necessary to make the statements
therein not misleading in the light of the circumstances in which they were
made.
7.3. LICENSES, ETC. Each of the Borrower and its Subsidiaries has
all trademarks, trademark rights, trade names, trade name
rights, service marks, service mark rights, copyrights,
licenses, permits, authorizations and other rights, as are
necessary for the conduct of their respective businesses. All
of the foregoing are in full force and effect, and the
Borrower and each of its Subsidiaries are in substantial
compliance without any known conflict with the valid rights of
or by others which could result in a Material Adverse Change.
7.4. CHANGES IN CONDITION. Since December 31, 2002, no Material
Adverse Change has occurred, and, except as previously
disclosed to the Lenders, neither the Borrower nor any of its
Subsidiaries has entered into any material transaction outside
the ordinary course of business.
7.5. TITLE TO ASSETS. Each of the Borrower and its Subsidiaries has
good and marketable title to all assets necessary for or used
in the operations of their businesses as now conducted or
proposed to be conducted by them and reflected in the most
recent balance sheet referred to in Section 7.2 (or the
balance sheet most recently furnished to the Lenders pursuant
36
to Section 6.5.1 or 6.5.2), and to all assets acquired
subsequent to the date of such balance sheet, subject to no
Liens except for those permitted by Section 6.8.
7.6. LITIGATION. Except for the GREEN asbestosis litigation to the
extent described in the 2002 Form 10-K and subsequent Form
10-Q reports referred to in Section 7.2, no litigation, at law
or in equity, or any proceeding before any federal, state,
provincial or municipal court, board or other governmental or
administrative agency or any arbitrator is pending or to the
knowledge of the Borrower threatened which may involve any
material risk of any final judgment or liability not
adequately covered by insurance or which may otherwise result
in any Material Adverse Change, or which questions the
validity or enforceability of any Credit Document. No
judgment, decree, or order of any federal, state, provincial
or municipal court, board or other governmental or
administrative agency or arbitrator has been issued against
the Borrower or any of its Subsidiaries which has resulted, or
creates a material risk of resulting in, any Material Adverse
Change.
7.7. TAX RETURNS. Each of the Borrower and its Subsidiaries has
filed all tax returns which are required to be filed and have
paid, or made adequate provision for the payment of, all taxes
which have or may become due pursuant to said returns or to
assessments received. The federal tax returns of the Borrower
for which the applicable period of limitations have not
expired have not been audited by the Internal Revenue Service.
The Borrower does not know of any material additional
assessments or basis therefor. The Borrower has made adequate
provision for all current taxes, and in the opinion of the
Borrower there will not be any material additional assessments
for any fiscal periods prior to and including the fiscal year
ended December 31, 2002 in excess of the amounts reserved
therefor in the balance sheet as at such date.
7.8. ENFORCEABILITY; NO LEGAL OBSTACLE TO AGREEMENTS. Each of this
Agreement, the Revolving Notes and each other Credit Document
to which the Borrower or any of its Subsidiaries is party is
the legal, valid and binding obligation of such Person,
enforceable against it in accordance with its terms. Neither
the execution and delivery of this Agreement or any other
Credit Document, nor, in the case of the Borrower, the making
of any borrowings hereunder, nor the consummation of any
transaction referred to in or contemplated by this Agreement
or any other Credit Document, nor the fulfillment of the terms
hereof or thereof or of any other agreement, instrument, deed
or lease referred to in this Agreement or any other Credit
Document, has constituted or resulted, or will constitute or
result in:
(a) any breach or termination of the provisions of any agreement,
instrument, deed or lease to which the Borrower or any of its
Subsidiaries is a party or by which it is bound resulting or
creating a material risk of resulting in any Material Adverse
Change or challenge to the validity or enforceability of any
Credit Document, or any breach of the Charter or By-laws of
the Borrower or any of its Subsidiaries;
(b) the violation of any law, statute, judgment, decree or
governmental order, rule or regulation applicable to the
Borrower or any of its Subsidiaries resulting or creating a
material risk of resulting in any Material Adverse Change or
challenging the validity or enforceability of any Credit
Document;
37
(c) the creation under any agreement, instrument, deed or lease of
any Lien (other than Liens permitted by the Credit Documents)
upon any of the assets of the Borrower or any of its
Subsidiaries; or
(d) any redemption, retirement or other repurchase obligation of
any of the Borrower or any of its Subsidiaries under any
Charter, By-law, agreement, instrument, deed or lease.
No approval, authorization or other action by, or declaration to or filing with,
any governmental or administrative authority or any other Person (including
Insurance Authorities) is required to be obtained or made by the Borrower or any
of its Subsidiaries in connection with the execution, delivery and performance
of this Agreement or any other Credit Document, the transactions contemplated
hereby or thereby, in the case of the Borrower, the making of any borrowing
hereunder or thereunder, or the validity or enforceability of any Credit
Document.
7.9. DEFAULTS. Neither the Borrower nor any of its Subsidiaries is
in default under any provision of its Charter or By-laws or of
this Agreement or any other Credit Document. Neither the
Borrower nor any of its Subsidiaries is in default under any
provision of any agreement, instrument, deed or lease to which
it is party or by which it or its property is bound, or has
violated any law, judgment, decree or governmental order, rule
or regulation, so as to result, or pose a material risk of
resulting, in any Material Adverse Change.
7.10. BURDENSOME OBLIGATIONS. Neither the Borrower nor any of its
Subsidiaries is party to or bound by any agreement,
instrument, deed or lease or is subject to any Charter, By-law
or other restriction which, in the opinion of the Borrower's
management, is so unusual or burdensome as in the foreseeable
future to result, or pose a material risk of resulting, in a
Material Adverse Change. Except for the Green asbestosis
litigation to the extent described in the 2002 Form 10-K and
subsequent Form 10-Q reports referred to in Section 7.2, the
Borrower does not presently anticipate that future
expenditures of the Borrower and its Subsidiaries needed to
meet the provisions of any federal or state statutes, orders,
rules or regulations will be so burdensome as to result, or
pose a material risk of resulting, in a Material Adverse
Change.
7.11. PENSION PLANS. Each Plan maintained by the Borrower or any
ERISA Group Member is in material compliance with the
applicable provisions of ERISA and the Code. Except as set
forth on Exhibit 7.11, neither the Borrower nor any ERISA
Group Member maintains, contributes to, or participates in any
Plan that is a "defined benefit plan" as defined in ERISA, or
is a Multiemployer Plan. Each of the Borrower and each ERISA
Group Member has met all of the funding standards applicable
to such Plans, and no event or condition exists which would
permit the institution of proceedings to terminate any Plan
under section 4042 of ERISA. The current value of the
Accumulated Benefit Obligations under each of the Plans does
not exceed the current value of such Plans' assets allocable
to such benefits by more than $1,000,000.
7.12. GOVERNMENT REGULATION. Neither the Borrower nor any of its
Subsidiaries, nor any Person controlling the Borrower or any
of its Subsidiaries or under common control with the Borrower
or any of its Subsidiaries is subject to regulation under the
Public Utility
38
Holding Company Act of 1935, the Federal Power Act of 1935, the
Investment Company Act of 1940, the Interstate Commerce Act or any
statute or regulation which regulates the incurring by the Borrower
or any of its Subsidiaries of Financing Debt as contemplated by this
Agreement and the other Credit Documents. Various aspects of
the business conducted by the Borrower and its Subsidiaries,
including the nature of the services required to be furnished
and the rates that may be charged therefor, are subject to
regulation by the Superintendent of Insurance of the State of
Ohio and by similar authorities in other jurisdictions in
which the Borrower and its Subsidiaries conduct business.
7.13. ENVIRONMENTAL REGULATION. Except as set forth in Exhibit 7.13
and to the best of the Borrower's knowledge, there have been
no past, and there are no pending or threatened (a) claims,
complaints, notices or requests for information received by
the Borrower or any of its Subsidiaries with respect to any
alleged violation of any Environmental Law that, singly or in
the aggregate, have resulted in, or may reasonably be expected
to result in, any Material Adverse Change, or (b) complaints,
notices or inquiries to the Borrower or any of its
Subsidiaries regarding potential liability under any
Environmental Law that, singly or in the aggregate, have
resulted in, or may reasonably be expected to result in, any
Material Adverse Change.
7.14. DISCLOSURE. Neither this Agreement nor any other Credit
Document to be furnished to the Lenders by or on behalf of the
Borrower or any of its Subsidiaries in connection with the
transactions contemplated hereby or by such Credit Document
contains any untrue statement of material fact or omits to
state a material fact necessary in order to make the
statements contained herein or therein not misleading in light
of the circumstances under which they were made. No fact is
actually known to the Borrower which has resulted, or in the
future (so far as the Borrower can reasonably foresee) will
result, or creates a material risk of resulting, in any
Material Adverse Change, except to the extent that present or
future general economic conditions may result in a Material
Adverse Change.
8. DEFAULTS.
8.1. EVENTS OF DEFAULT. The following events are herein referred to
as "EVENTS OF DEFAULT":
8.1.1. PAYMENT. The Borrower shall fail to make any payment in
respect of: (a) interest on any of the Credit Obligations as
the same shall become due and payable and such failure shall
continue for a period of five Banking Days, (b) any fee or any
expense or indemnity in respect of any of the Credit
Obligations as the same shall become due and payable and such
failure shall continue for a period of five Banking Days after
notice thereof by the Administrative Agent to the Borrower
(which notice shall be given upon the request of the Required
Majority Lenders), or (c) principal of any of the Credit
Obligations as the same shall become due, whether at maturity
or by acceleration or otherwise.
8.1.2. DESIGNATED COVENANTS. The Borrower or any of its Subsidiaries
shall fail to perform or observe any of the provisions of
Sections 6.6 through 6.15 to be performed or observed by such
Person.
39
8.1.3. GENERAL COVENANTS. The Borrower or any of its Subsidiaries
shall fail to perform or observe any other covenant, agreement
or provision to be performed or observed by such Person under
this Agreement or any other Credit Document, and such failure
shall not be rectified or cured to the written satisfaction of
the Required Majority Lenders within 20 days after notice
thereof by the Administrative Agent to the Borrower (which
notice shall be given upon the request of the Required
Majority Lenders).
8.1.4. MISREPRESENTATIONS. Any representation or warranty of or with
respect to the Borrower or any of its Subsidiaries in
connection with this Agreement, any other Credit Document or
any financial statements, reports, notices, assignments or
certificates delivered to any of the Lenders by the Borrower
or any of its Subsidiaries, or any other Person as a
guarantor, pledgor or other obligor in connection with this
Agreement shall be materially false or materially misleading
on the date as of which it was made.
8.1.5. CROSS DEFAULTS, ETC.
(a) The Borrower or any of its Subsidiaries shall fail to make any
payment when due (after giving effect to any applicable grace
periods) in respect of any Financing Debt (other than the
Credit Obligations) outstanding in an aggregate amount of
principal and accrued and unpaid interest exceeding
$5,000,000.
(b) The Borrower or any of its Subsidiaries shall fail to perform
or observe the terms of any agreement or guarantee relating to
such Financing Debt, and such failure or condition shall
continue, without having been duly cured, waived or consented
to, beyond the period of grace, if any, specified in such
agreement, and such failure or condition shall permit the
acceleration of such Financing Debt.
(c) Any such Financing Debt of the Borrower or any of its
Subsidiaries shall be accelerated or become due or payable
prior to its stated maturity for any reason whatsoever (other
than voluntary prepayments thereof).
(d) Any Lien on any property of the Borrower or any of its
Subsidiaries securing any such Financing Debt shall be
enforced by foreclosure or similar action.
(e) Any holder of any such Financing Debt shall exercise any right
of rescission with respect to the issuance thereof.
8.1.6. CHANGE OF CONTROL OF THE BORROWER. Either (a) Xxxxxxx Family Members
or direct or indirect Subsidiaries of Xxxxxxx Family Members or their
nominees shall cease to own, in the aggregate, beneficially (i) at
least 25% of the outstanding voting common stock of the Borrower
(or any successor permitted under Section 6.11) and (ii) a sufficient
number of shares of such voting common stock of the Borrower so that
such Xxxxxxx Family Members, in the aggregate, shall own more shares
of such voting common stock than any other Person or group of Persons
by a margin of at least 10% of the total number of shares of such
voting common stock of the Borrower then outstanding, or (b) a majority
of the members of
40
the Board of Directors of the Borrower shall not actually consist of
Xxxxxxx Family Members, their nominees or representatives or
independent directors within the meaning of applicable Securities
and Exchange Commission and stock exchange regulations.
8.1.7. CHANGE OF CONTROL IN GAIC. The Borrower (or any of its successors
permitted under Section 6.11) shall cease to own directly 100% of the
voting common stock of GAIC.
8.1.8. EFFECTIVENESS OF CREDIT DOCUMENTS. Any Credit Document shall
cease, for any reason to be in full force and effect, or the
Borrower or any of its Subsidiaries shall so assert.
8.1.9. JUDGMENTS, ETC. A final judgment (a) which, with other
outstanding final judgments against the Borrower or any of its
Subsidiaries, exceeds an aggregate of $5,000,000 shall be
rendered against the Borrower or any of its Subsidiaries, or
(b) which grants injunctive relief that results, or creates a
material risk of resulting, in a Material Adverse Change, and
(c) which, within 60 days after entry thereof, has not been
discharged or execution thereof stayed pending appeal, or if,
within 60 days after the expiration of any such stay, such
judgment shall not have been discharged.
8.1.10. ERISA MATTERS. The Borrower or any ERISA Group Member shall
fail to pay when due amounts aggregating in excess of
$10,000,000 which it shall have become liable to pay to the
PBGC or to a Plan under Title IV of ERISA; or notice of intent
to terminate a Plan shall be filed under Title IV of ERISA by
the Borrower or any ERISA Group Member or any administrator;
or the PBGC shall institute proceedings under Title IV of
ERISA to terminate or to cause a trustee to be appointed to
administer any Plan or a proceeding shall be instituted by a
fiduciary of any Plan against the Borrower or any ERISA Group
Member to enforce section 515 or 4219(c)(5) of ERISA and such
proceeding shall not have been dismissed within 30 days
thereafter; or a Lien shall be imposed under section 302(f) of
ERISA; or a condition shall exist by reason of which the PBGC
would be entitled to obtain a decree adjudicating that any
Plan must be terminated.
8.1.11. INSURANCE SUBSIDIARIES MATTERS. Any of the Insurance
Subsidiaries shall, at any time after the date hereof, be
prohibited by law from engaging in the business of effecting
and carrying out contracts of insurance, and such prohibition
would result in a Material Adverse Change.
8.1.12. TERMINATION OF INSURANCE BUSINESS. Any court or any Insurance
Authority or any other governmental or regulatory authority,
agency or official of competent jurisdiction shall issue an
order or decree which shall require any of the Insurance
Subsidiaries to reduce or to terminate all or any substantial
part of its insurance business, and such reduction or
termination would result in a Material Adverse Change.
8.1.13. BANKRUPTCY, ETC. The Borrower or any of its Subsidiaries
shall:
(a) Commence a voluntary case under the Bankruptcy Code or
authorize, by appropriate proceedings of its board of
directors or other governing body, the commencement of such a
voluntary case;
41
(b) Have filed against it a petition commencing an involuntary
case under the Bankruptcy Code which shall not have been
dismissed within 60 days after the date on which such petition
is filed; or file an answer or other pleading within such
60-day period admitting or failing to deny the material
allegations of such a petition or seeking, consenting to or
acquiescing in the relief therein provided;
(c) Have entered against it an order for relief in any involuntary
case commenced under the Bankruptcy Code;
(d) Seek relief as a debtor under any applicable law, other than
the Bankruptcy Code, of any jurisdiction relating to the
liquidation or reorganization of debtors or to the
modification or alteration of the rights of creditors, or
consent to or acquiesce in such relief;
(e) Have entered against it an order by a court of competent
jurisdiction (i) finding it to be bankrupt or insolvent, (ii)
ordering or approving its liquidation, reorganization or any
modification or alteration of the rights of its creditors or
(iii) assuming custody of, or appointing a receiver or other
custodian for, all or a substantial portion of its property;
(f) Make an assignment for the benefit of, or enter into a
composition with, its creditors, or appoint, or consent to the
appointment of, or suffer to exist a receiver or other
custodian for, all or a substantial portion of its property;
or
(g) Become insolvent or generally fail to pay, or admit in writing
its inability or unwillingness to pay, debts as they become
due; or
8.1.14. INSURANCE REGULATORY ACTION. Any applicable insurance
regulatory authority shall take action to intervene into the
management or business affairs of any of the Insurance
Subsidiaries and such action would result in a Material
Adverse Change.
8.2. CERTAIN ACTIONS FOLLOWING AN EVENT OF DEFAULT. If any one or
more Events of Default shall occur, then in each and every
such case:
8.2.1. NO OBLIGATION TO EXTEND CREDIT. Upon notice by the
Administrative Agent to the Borrower, upon the written request
of the Required Majority Lenders, the obligations of the
Lenders to make any further extensions of credit hereunder
shall automatically terminate; provided, however, that if a
Bankruptcy Default shall have occurred, the Commitments (if
not theretofore terminated) shall automatically terminate.
8.2.2. EXERCISE OF RIGHTS. Upon the written request of the Required
Majority Lenders, the Administrative Agent shall proceed to
protect and enforce the Lenders' rights by suit in equity,
action at law and/or other appropriate proceeding, either for
specific performance of any covenant or condition contained in
this Agreement or any other Credit Document or in any
instrument or assignment delivered to the Lenders pursuant to
this Agreement or any other Credit Document, or in aid of the
exercise of any power granted in this Agreement or any other
Credit Document or any such instrument or assignment.
42
8.2.3. ACCELERATION. Upon the written request of the Required
Majority Lenders, the Administrative Agent on behalf of the
Lenders shall by notice in writing to the Borrower declare all
or any part of the unpaid balance of the Credit Obligations
then outstanding to be immediately due and payable, and
thereupon such unpaid balance or part thereof shall become so
due and payable without presentment, protest or further demand
or notice of any kind, all of which are hereby expressly
waived; provided, however, that if a Bankruptcy Default shall
have occurred, the unpaid balance of the Credit Obligations
shall automatically become immediately due and payable without
presentment, protest, or other demand or notice of any kind,
all of which are expressly waived.
8.2.4. SETOFF. If all or any part of the unpaid balance of the Credit
Obligations shall have become due and payable pursuant to
Section 8.2.3, each Lender may offset and apply toward the
payment of such balance or part thereof (and/or toward the
curing of any Event of Default) any Indebtedness from such
Lender to the Borrower, including any Indebtedness represented
by deposits in any account maintained with such Lender,
regardless of the adequacy of any security for the Credit
Obligations, and no Lender shall have any duty to determine
the adequacy of any such security in connection with any such
offset.
8.2.5. CUMULATIVE REMEDIES. To the extent not prohibited by
applicable law which cannot be waived, all of the Lenders'
rights hereunder and under each other Credit Document shall be
cumulative.
8.3. ANNULMENT OF DEFAULTS. Any Default or Event of Default shall
be deemed not to exist or to have occurred for any purpose of
this Agreement if the required holders of the Credit
Obligations in accordance with Section 10.6 or the
Administrative Agent (with any consent of holders of Credit
Obligations required by Section 10.6) shall have waived such
Default or Event of Default in writing, stated in writing that
the same has been cured to such Lenders' reasonable
satisfaction or entered into an amendment to this Agreement
which by its express terms cures such Default or Event of
Default. No such action by the Lenders or the Administrative
Agent shall extend to or affect any subsequent Default or
Event of Default or impair any rights of the Lenders upon the
occurrence thereof. The making of any extension of credit
during the existence of any Default or Event of Default shall
not constitute a waiver thereof.
8.4. WAIVERS. The Borrower hereby waives to the extent not
prohibited by applicable law:
(a) All presentments, demands for performance, notices of
nonperformance (except to the extent required by the
provisions of this Agreement or any other Credit Document),
protests, notices of protest and notices of dishonor;
(b) Any requirement of diligence or promptness on the part of any
Lender in the enforcement of its rights under this Agreement,
the Revolving Notes or any other Credit Document;
43
(c) Any and all notices of every kind and description which may
be required to be given by any statute or rule of law; and
(d) Any defense of any kind (other than indefeasible payment in
full) which it may now or hereafter have with respect to its
liability under this Agreement, the Revolving Notes or any
other Credit Document or with respect to the Credit
Obligations.
9. EXPENSES; INDEMNITY.
9.1. EXPENSES. The Borrower will bear:
(a) All reasonable expenses of the Administrative Agent (including
the reasonable fees and disbursements of the special counsel
to the Administrative Agent, but excluding fees and expenses
of counsel to the other Lenders) in connection with the
preparation and duplication of this Agreement, each other
Credit Document (including any amendment to or waiver under
any Credit Document), the transactions contemplated hereby and
thereby and operations hereunder and thereunder;
(b) All recording and filing fees and transfer and documentary
stamp and similar taxes at any time payable in respect of this
Agreement, any other Credit Document or the incurrence of the
Credit Obligations; and
(c) To the extent not prohibited by applicable law that cannot be
waived, all other reasonable expenses incurred by the Lenders
or the holder of any Credit Obligation in connection with the
enforcement of any rights hereunder or under any other Credit
Document (including, during the existence of a Default, the
Administrative Agent's examination rights provided in Section
6.5.6), including costs of collection and reasonable
attorneys' fees (including a reasonable allowance for the
hourly cost of attorneys employed by the Administrative Agent
on a salaried basis) and expenses.
9.2. GENERAL INDEMNITY. The Borrower will indemnify the
Administrative Agent and each Lender, and each of the
Administrative Agent and the Lenders' respective directors,
officers, employees, agents, counsel and accountants and each
Person, if any, who controls the Administrative Agent or any
Lender (the Administrative Agent and each Lender and each of
their respective directors, officers, employees, agents,
counsel and accountants and control Persons is referred to as
an "INDEMNITEE") and hold each of them harmless from and
against any and all claims, damages, liabilities and
reasonable expenses (including reasonable fees and
disbursements of counsel with whom any Indemnitee may consult
in connection therewith and all expenses of litigation or
preparation therefor) which any Indemnitee may incur or which
may be asserted against any Indemnitee in connection with any
litigation or investigation involving the Borrower or any of
its Subsidiaries, or any officer, director, employee, agent,
counsel or accountant thereof (including the Administrative
Agent's or Lenders' compliance with or contest of any subpoena
or other process issued against it in any proceeding involving
the Borrower or any of its Subsidiaries), whether or not such
Indemnitees are parties thereto,
44
or any penalties or other matters involving the transactions
contemplated hereby, other
than litigation commenced by the Borrower against the Lenders
or the Administrative Agent which seeks enforcement of any of
the rights of the Borrower hereunder or under any other Credit
Document and is finally determined adversely to the Lenders or
the Administrative Agent and except to the extent such claims,
damages, liabilities and expenses result from the
Administrative Agent's or a Xxxxxx's gross negligence or
willful misconduct.
10. OPERATIONS; AGENT.
10.1. INTERESTS IN CREDITS. The Percentage Interest of each Lender
in the respective portions of the Loan, and the related
Commitments, shall be computed based on the maximum principal
amount for each Lender as set forth in the Register, as from
time to time in effect. The current Percentage Interests are
set forth in Exhibit 10.1, which may be updated by the
Administrative Agent from time to time to conform to the
Register.
10.2. ADMINISTRATIVE AGENT'S AUTHORITY TO ACT, ETC. Each of the
Lenders hereby appoints and authorizes the Administrative
Agent to act for the Lenders as the Lenders' Administrative
Agent in connection with the transactions contemplated by this
Agreement and the other Credit Documents on the terms set
forth herein. In acting hereunder, the Administrative Agent is
acting for its own account to the extent of its Percentage
Interest and for the accounts of the other Lenders to the
extent of the Lenders' respective Percentage Interests, and
all action in connection with the enforcement of, or the
exercise of any remedies (other than each Lender's rights of
set-off as provided in Section 8.2.4 or in any Credit
Document) in respect of the Credit Obligations and Credit
Documents shall be taken by the Administrative Agent, as
provided for in this Agreement. Neither the syndication agent,
the documentation agent nor any other agent or arranger named
hereunder (other than the Administrative Agent) shall have any
duties or obligations under the Credit Documents.
10.3. BORROWER TO PAY ADMINISTRATIVE AGENT, ETC. The Borrower shall
be fully protected in making all payments and providing all
notices in respect of the Credit Obligations to the
Administrative Agent, in relying upon consents, modifications
and amendments executed by the Administrative Agent
purportedly on the Lenders' behalf, and in dealing with the
Administrative Agent as herein provided. The Administrative
Agent shall charge the account of the Borrower, on the dates
when the amounts thereof become due and payable, with the
amounts of the principal of and interest on the Loan, the
commitment fees and all other fees and amounts owing under any
Credit Document.
10.4. LENDER OPERATIONS FOR ADVANCES, ETC.
10.4.1. ADVANCES. Upon receipt of a borrowing request by the
Administrative Agent under Section 2.1, the Administrative
Agent shall promptly notify each of the Lenders (by telephone
confirmed in writing or otherwise). On each Closing Date, each
Lender shall advance to the Administrative Agent in
immediately available funds such Xxxxxx's Percentage Interest
in the portion of the Loan to be advanced on such Closing Date
prior to 10:00 a.m. (Boston time). If such funds are not
received from any Lender at such time, but all the conditions
set forth in Section 5.2 have been satisfied, such Lender
hereby authorizes and requests the Administrative Agent to
advance for such Xxxxxx's
45
account, pursuant to the terms hereof, such Xxxxxx's respective
Percentage Interest in such portion of the Loan and agrees to
reimburse the Administrative Agent in immediately available funds
for the amount thereof prior to 2:00 p.m. (Boston time) on the day
any such portion of the Loan is advanced hereunder.
10.4.2. ADMINISTRATIVE AGENT TO ALLOCATE PAYMENTS. Subject to Section
10.4.3, all payments of principal and interest in respect of
the extensions of credit made pursuant to this Agreement and
commitment fees and other fees under this Agreement shall, as
a matter of convenience, be made by the Borrower to the
Administrative Agent in immediately available funds, and the
share of each Lender shall be credited to such Lender by the
Administrative Agent in immediately available funds in such
manner that the principal amount, interest and fees in respect
of the Credit Obligations to be paid shall be paid
proportionately in accordance with the Lenders' respective
Percentage Interests.
10.4.3. NONPERFORMING LENDERS. In the event that any Lender fails to
reimburse the Administrative Agent pursuant to Sections 10.4.1
for the Percentage Interest of such lender (a "NONPERFORMING
LENDER") in any credit advanced by the Administrative Agent
pursuant hereto, overdue amounts (the "DELINQUENT PAYMENT")
due from the Nonperforming Lender to the Administrative Agent
shall bear interest, payable by the Nonperforming Lender on
demand, at a per annum rate equal to (a) the Federal Funds
Rate for the first three days overdue and (b) the sum of 2%
PLUS the Federal Funds Rate for any longer period. Such
interest shall be payable to the Administrative Agent for its
own account for the period commencing on the date of the
Delinquent Payment and ending on the date the Nonperforming
Lender reimburses the Administrative Agent on account of the
Delinquent Payment (to the extent not paid by the Borrower as
provided below) and the accrued interest thereon (the
"DELINQUENCY PERIOD"), whether pursuant to the assignments
referred to below or otherwise. Upon notice by the
Administrative Agent, the Borrower will pay to the
Administrative Agent the principal (but not the interest)
portion of the Delinquent Payment. During the Delinquency
Period, in order to make reimbursements for the Delinquent
Payment and accrued interest thereon, the Nonperforming Lender
shall be deemed to have assigned to the Administrative Agent
all interest, commitment fees and other payments made by the
Borrower under Section 3 that would have thereafter otherwise
been payable under the Credit Documents to the Nonperforming
Lender. During any period in which any Nonperforming Lender is
not performing its obligations to extend credit under Section
2, the Nonperforming Lender shall be deemed to have assigned
to each Lender that is not a Nonperforming Lender (a
"PERFORMING LENDER") all principal and other payments made by
the Borrower under Section 4 that would have thereafter
otherwise been payable under the Credit Documents to the
Nonperforming Lender. The Administrative Agent shall credit a
portion of such payments to each Performing Lender in an
amount equal to the Percentage Interest of such Performing
Lender divided by one minus the Percentage Interest of the
Nonperforming Lender until the respective portions of the Loan
owed to all the Lenders are the same as the Percentage
Interests of the Lenders immediately prior to the failure of
the Nonperforming Lender to perform its obligations under
Section 2. The foregoing provisions shall be in addition to
any other remedies the Administrative Agent, the Performing
Lenders or the Borrower may have under law or equity against
the Nonperforming Lender as a result of the Delinquent Payment
or as a result of its failure to perform its obligations under
Section 2.
46
10.5. ADMINISTRATIVE AGENT'S RESIGNATION. The Administrative Agent
may resign at any time by giving at least 60 days' prior
written notice of its intention to do so to each Lender and to
the Borrower and upon the appointment by the Required Majority
Lenders of a successor Administrative Agent satisfactory to
the Borrower. If no successor Administrative Agent shall have
been so appointed and shall have accepted such appointment
within 45 days after the retiring Administrative Agent's
giving of such notice of resignation, then the retiring
Administrative Agent may, with the consent of the Borrower,
which consent shall not be unreasonably withheld, appoint a
successor Administrative Agent which shall be a bank or a
trust company organized under the laws of the United States of
America or any state thereof and having a combined capital,
surplus and undivided profit of at least $500,000,000 and a
tier one ratio of equity to risk-weighted assets ranking in
the top half of all domestic banks having greater than
$1,000,000,000 in assets pursuant to regulations issued by the
federal Comptroller of the Currency, the Board of Governors of
the Federal Reserve System or other applicable federal bank
regulatory agencies; PROVIDED, HOWEVER, that any successor
Administrative Agent appointed under this sentence may be
removed upon the written request of the Required Majority
Lenders, which request shall also appoint a successor
Administrative Agent satisfactory to the Borrower. Upon the
appointment of a new Administrative Agent hereunder, the term
"ADMINISTRATIVE AGENT" shall for all purposes of this
Agreement thereafter mean such successor. After any retiring
Administrative Agent's resignation hereunder as Administrative
Agent, or the removal hereunder of any successor
Administrative Agent, the provisions of this Agreement shall
continue to inure to the benefit of the Administrative Agent
as to any actions taken or omitted to be taken by it while it
was Administrative Agent under this Agreement.
10.6. CONCERNING THE ADMINISTRATIVE AGENT.
10.6.1. ACTION IN GOOD FAITH, ETC. The Administrative Agent and its
officers, directors, employees and agents shall be under no
liability to any of the Lenders or to any future holder of any
interest in the Credit Obligations for any action or failure
to act taken or suffered in good faith, and any action or
failure to act in accordance with an opinion of its counsel
shall conclusively be deemed to be in good faith. The
Administrative Agent shall in all cases be entitled to rely,
and shall be fully protected in relying, on instructions given
to the Administrative Agent by the required holders of Credit
Obligations as provided in this Agreement.
10.6.2. NO IMPLIED DUTIES, ETC. The Administrative Agent shall have
and may exercise such powers as are specifically delegated to
the Administrative Agent under this Agreement or any other
Credit Document, together with all other powers incidental
thereto. The Administrative Agent shall have no implied duties
to any Person or any obligation to take any action under this
Agreement or any other Credit Document except for action
specifically provided for in this Agreement or any other
Credit Document to be taken by the Administrative Agent.
Before taking any action under this Agreement or any other
Credit Document, the Administrative Agent may request an
appropriate specific indemnity satisfactory to it from each
Lender in addition to the general indemnity provided for in
Section 10.9, and until the Administrative Agent has received
such specific indemnity, the Administrative Agent shall not be
obligated to take (although it may in its sole discretion
take) any such action under this Agreement or any other Credit
Document;
47
provided, however, that no such indemnity shall extend to actions
or omissions which are taken by the Administrative Agent with gross
negligence or willful misconduct.
10.6.3. VALIDITY, ETC. Subject to Section 10.6.1, the Administrative
Agent shall not be responsible to any Lender or any future
holder of any interest in the Credit Obligations (a) for the
legality, validity, enforceability or effectiveness of this
Agreement or any other Credit Document, (b) for any recitals,
reports, representations, warranties or statements contained
in or made in connection with this Agreement or any other
Credit Document, (c) for the existence or value of any assets
included in any security for the Credit Obligations, (d) for
the perfection or effectiveness of any Lien purported to be
included in such security or (e) for the specification or
failure to specify any particular assets to be included in
such security.
10.6.4. COMPLIANCE. The Administrative Agent shall not be obligated to
ascertain or inquire as to the performance or observance of
any of the terms of this Agreement or any other Credit
Document. In connection with any extension of credit under
this Agreement or any other Credit Document, the
Administrative Agent shall be fully protected in relying on a
certificate of the Borrower as to the fulfillment by the
Borrower of any conditions to such extension of credit.
10.6.5. EMPLOYMENT OF AGENTS AND COUNSEL. The Administrative Agent may
execute any of its duties as Administrative Agent under this
Agreement or any other Credit Document by or through
employees, agents and attorneys-in-fact and shall not be
responsible to any of the Lenders, the Borrower or any of its
Subsidiaries (except as to money or securities received by the
Administrative Agent or the Administrative Agent's authorized
agents) for the default or misconduct of any such agents or
attorneys-in-fact selected by the Administrative Agent, except
where the Administrative Agent has acted with gross negligence
or willful misconduct. The Administrative Agent shall be
entitled to advice of counsel concerning all matters
pertaining to the agencies hereby created and its respective
duties hereunder or under any other Credit Document.
10.6.6. RELIANCE ON DOCUMENTS AND COUNSEL. The Administrative Agent
shall be entitled to rely, and shall be fully protected in
relying, upon any affidavit, certificate, cablegram, consent,
instrument, letter, notice, order, document, statement,
telecopy, telegram, telex or teletype message or writing
reasonably believed in good faith by the Administrative Agent
to be genuine and correct and to have been signed, sent or
made by the Person in question, including without limitation
any telephonic or oral statement made by such Person, and,
with respect to legal matters, upon the opinion of counsel
selected by the Administrative Agent.
10.6.7. ADMINISTRATIVE AGENT'S REIMBURSEMENT. Each of the Lenders
severally agrees to reimburse the Administrative Agent, in the
amount of such Xxxxxx's Percentage Interest, for any expenses
not reimbursed by the Borrower (without limiting the
obligation of the Borrower to make such reimbursement): (a)
for which the Administrative Agent is entitled to
reimbursement by the Borrower under this Agreement or any
other Credit Document, and (b) after the occurrence of a
Default, for any other expenses incurred by the Administrative
Agent on the Lenders' behalf in connection with the
enforcement of the
46
Lenders' rights under this Agreement or any other Credit Document;
provided, however, that no such reimbursement shall apply to actions
or omissions which are taken by the Administrative Agent with gross
negligence or willful misconduct.
10.7. RIGHTS AS A LENDER. With respect to any credit extended by it
hereunder, the Administrative Agent shall have the same
rights, obligations and powers hereunder as any other Lenders
and may exercise such rights and powers as though it was not
the Administrative Agent, and unless the context otherwise
specifies, the Administrative Agent shall be treated in its
respective individual capacity as though it were not the
Administrative Agent hereunder. Without limiting the
generality of the foregoing, the Percentage Interest of the
Administrative Agent shall be included in any computations of
Percentage Interests. The Administrative Agent and its
Affiliates may accept deposits from, lend money to, act as
trustee for and generally engage in any kind of banking or
trust business with the Borrower or any of its Subsidiaries or
any other Person, including any Person who may do business
with or own an equity interest in the Borrower or any of its
Subsidiaries, all as if such bank was not the Administrative
Agent and without any duty to account therefor to the other
Lenders.
10.8. INDEPENDENT CREDIT DECISION. Each of the Lenders acknowledges
that it has independently and without reliance upon the
Administrative Agent, based on the financial statements and
other documents referred to in Section 7.2, on the other
representations and warranties contained herein and on such
other information with respect to the Borrower and its
Subsidiaries as such Lender deemed appropriate, made such
Xxxxxx's own credit analysis and decision to enter into this
Agreement and to make the extensions of credit provided for
hereunder. Each Lender represents to the Administrative Agent
that such Lender will continue to make its own independent
credit and other decisions in taking or not taking action
under this Agreement or any other Credit Document. Each Lender
expressly acknowledges that neither the Administrative Agent
nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations
or warranties to such Lender, and no act by the Administrative
Agent taken under this Agreement or any other Credit Document,
including any review of the affairs of the Borrower and its
Subsidiaries, shall be deemed to constitute any representation
or warranty by the Administrative Agent. Except for notices,
reports and other documents expressly required to be furnished
to each Lender by the Administrative Agent under this
Agreement or any other Credit Document, the Administrative
Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the
business, operations, property, condition, financial or
otherwise, or credit worthiness of the Borrower or any of its
Subsidiaries which may come into the possession of such the
Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
10.9. INDEMNIFICATION. The holders of the Credit Obligations hereby
agree to indemnify the Administrative Agent and its officers,
directors, employees, agents, attorneys, accountants,
consultants and controlling Persons (to the extent not
reimbursed by the Borrower and without limiting the obligation
of the Borrower to do so), pro rata according to their
respective Percentage Interests, from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time be imposed on, incurred by or
asserted against the Administrative Agent relating to or
arising out of this Agreement, any other Credit Document,
49
the transactions contemplated hereby or thereby, or any action
taken or omitted by the Administrative Agent in connection
with any of the foregoing; provided, however, that the
foregoing shall not extend to actions or omissions which are
determined in a final, nonappealable judgment by a court of
competent jurisdiction to have been taken by the
Administrative Agent with gross negligence or willful
misconduct.
11. SUCCESSORS AND ASSIGNS; XXXXXX ASSIGNMENTS AND PARTICIPATIONS.
Any reference in this Agreement or any other Credit Document
to any of the parties hereto shall be deemed to include the
successors and assigns of such party, and all covenants and
agreements by or on behalf of the Borrower, the Administrative
Agent or the Lenders that are contained in this Agreement or
any other Credit Document shall bind and inure to the benefit
of their respective successors and assigns; provided, however,
that (a) the Borrower and its Subsidiaries may not assign
their rights or obligations under this Agreement or any other
Credit Document except for mergers or liquidations permitted
by Section 6.11, and (b) the Lenders shall be not entitled to
assign their respective Percentage Interests in the credits
extended hereunder or their Commitments except as set forth
below in this Section 11.
11.1. ASSIGNMENTS BY LENDERS.
11.1.1. ASSIGNEES AND ASSIGNMENT PROCEDURES. Each Lender may, in
compliance with applicable laws in connection with such
assignment, assign to one or more Eligible Assignees (each, an
"ASSIGNEE") all or a portion of its interests, rights and
obligations under this Agreement and the other Credit
Documents, including all or a portion, which need not be pro
rata between the 364-Day Revolving Loan and the Three-Year
Revolving Loan, of its Commitment, the portion of the 364-Day
Revolving Loan or the Three-Year Revolving Loan at the time
owing to it and any Revolving Notes held by it; provided,
however, that:
(a) the aggregate amount of the Commitment of the assigning Lender
subject to each such assignment to any Assignee other than
another Lender, a Related Fund, any Eligible Assignee that
acquires all or a substantial portion of the assets of a
Lender or an Affiliate of a Lender (determined as of the date
the Assignment and Acceptance with respect to such assignment
is delivered to the Administrative Agent) shall be not less
than $5,000,000 and in increments of $1,000,000 (or, if less,
the entire remaining amount of the assigning Xxxxxx's
Commitment); and
(b) the parties to each such assignment shall execute and deliver
to the Administrative Agent an Assignment and Acceptance (the
"Assignment and Acceptance") substantially in the form of
Exhibit 11.1.1, together with the Note subject to such
assignment and, except in the event of a transfer pursuant to
Sections 11.3 or 11.4 or to another Lender, a Related Fund,
any Eligible Assignee that acquires all or a substantial
portion of the assets of a Lender or an Affiliate of a Lender,
a processing fee of $3,500 payable to the Administrative Agent
by the assigning Lender (or as the assigning Lender and the
Assignee may otherwise agree between themselves).
50
Upon acceptance and recording pursuant to Section 11.1.4, from and
after the effective date specified in each Assignment and Acceptance
(which effective date shall be at least five Banking Days after the
execution thereof unless waived by the Administrative Agent):
(i) the Assignee shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights
and obligations of a Lender under this Agreement and
(ii) the assigning Lender shall, to the extent provided in such
assignment, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall
cease to be a party hereto but shall continue to be entitled
to the benefits of Sections 3.2.4, 3.4, 3.5 and 9, as well as
to any fees accrued for its account hereunder and not yet
paid).
11.1.2. Terms of Assignment and Acceptance. By executing and
delivering an Assignment and Acceptance, the assigning Lender
and the Assignee shall be deemed to confirm to and agree with
each other and the other parties hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned
thereby free and clear of any adverse claim, such assigning
Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement
or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, any other
Credit Document or any other instrument or document furnished
pursuant hereto;
(b) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial
condition of the Borrower and its Subsidiaries or the
performance or observance by the Borrower or any of its
Subsidiaries of any of its obligations under this Agreement,
any other Credit Document or any other instrument or document
furnished pursuant hereto;
(c) such Assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 7.2 or Section 6.5
and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance;
(d) such Assignee will independently and without reliance upon the
Administrative Agent, such assigning Lender or any other
Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this
Agreement;
51
(e) such Assignee appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and
(f) such Assignee agrees that it will perform in accordance with
the terms of this Agreement all the obligations which are
required to be performed by it as a Lender.
11.1.3. REGISTER. The Administrative Agent shall maintain at the
Boston Office (solely for the limited purpose set forth in
this Section 11.1.3, as the agent of the Borrower) a register
(the "REGISTER") for the recordation of (a) the names and
addresses of the Lenders and the Assignees which assume rights
and obligations pursuant to an assignment under Section
11.1.1, (b) the Percentage Interest of each such Lender as set
forth in Exhibit 10.1 and (c) the amount of the Loan owing to
each Lender from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is registered therein for all purposes
as a party to this Agreement. The Register shall be available
for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
11.1.4. ACCEPTANCE OF ASSIGNMENT AND ASSUMPTION. Upon its receipt of a
completed Assignment and Acceptance executed by an assigning
Xxxxxx and an Assignee (and any necessary consent of the
Administrative Agent and the Borrower) together with the
processing and recordation fee referred to in Section 11.1.1
and, to the extent necessary, the Revolving Note being
assigned, the Administrative Agent shall (a) accept such
Assignment and Acceptance, (b) record the information
contained therein in the Register and (c) give prompt notice
thereof to the Borrower. Within five Banking Days after
receipt of notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent (in exchange
for the surrendered Revolving Note if such Revolving Note must
be surrendered or reissued as a result of such assignment) a
new Revolving Note to the order of such Assignee in a
principal amount equal to the applicable Commitment and Loan
assumed by it pursuant to such Assignment and Acceptance. If
the assigning Lender has retained a Commitment and Loan, its
Revolving Note shall be deemed to be then outstanding in a
principal amount equal to the applicable Commitment and Loan
retained by it.
11.1.5. FEDERAL RESERVE BANK. Notwithstanding the foregoing provisions
of this Section 11 (without the consent of or notice to the
Administrative Agent or the Borrower), any Lender may at any
time pledge all or any portion of such Lender's rights under
this Agreement and the other Credit Documents to a Federal
Reserve Bank or, in the case of any Lender that is a fund, to
the trustee of such fund to support the fund's obligations to
such trustee; PROVIDED, HOWEVER, that no such pledge or
assignment shall release such Lender from such Xxxxxx's
obligations hereunder or under any other Credit Document.
52
11.1.6. FURTHER ASSURANCES. The Borrower and its Subsidiaries shall
sign such documents and take such other actions from time to
time reasonably requested by an Assignee to enable it to share
in the benefits of the rights created by the Credit Documents.
11.2. CREDIT PARTICIPANTS. Each Lender may, without the consent of
the Borrower or the Administrative Agent, in compliance with
applicable laws in connection with such participation, sell to
one or more commercial banks, other financial institutions or
funds in the business of making or purchasing loans similar to
the Credit Obligations (each a "CREDIT PARTICIPANT")
participations in all or a portion of its interests, rights
and obligations under this Agreement and the other Credit
Documents (including all or a portion of its Commitment, the
Loan and the Revolving Notes held by it); PROVIDED, HOWEVER,
that:
(a) such Lender's obligations under this Agreement shall remain
unchanged;
(b) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(c) the Credit Participant shall be entitled to the benefit of the
cost protection provisions contained in Sections 3.2.4, 3.4,
3.5 and 9, but shall not be entitled to receive any greater
payment thereunder than the selling Lender would have been
entitled to receive with respect to the interest so sold if
such interest had not been sold; and
(d) the Borrower, the Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under
this Agreement and, under any agreements between such Lender
and such Credit Participant, such Lender shall retain the sole
right as one of the Lenders to vote (and to determine how to
vote) with respect to the enforcement of the obligations of
the Borrower relating to the Loan and the approval of any
amendment, modification or waiver of any provision of this
Agreement (other than amendments, modifications, consents or
waivers described in clause (b) of the proviso to Section
15.1, with respect to which the Credit Participant may
determine how to vote).
The Borrower agrees, to the fullest extent permitted by applicable law, that any
Credit Participant and any Lender purchasing a participation from another Lender
pursuant to Section 10.5 may exercise all rights of payment (including the right
of set-off), with respect to its participation as fully as if such Credit
Participant or such Lender were the direct creditor of the Borrower and a Lender
hereunder in the amount of such participation.
11.3. SPECIAL PURPOSE FUNDING VEHICLES. Notwithstanding anything to
the contrary contained herein, any Lender (a "GRANTING
LENDER") may grant to a special purpose funding vehicle
identified in writing by the Granting Lender to the
Administrative Agent and the Borrower from time to time (an
"SPV") the option to provide to the Borrower all or part of
any extension of credit that such Granting Lender would
otherwise be obligated to make to the Borrower pursuant
hereto; PROVIDED, HOWEVER, that (a) nothing herein shall
constitute a
53
commitment by any SPV to make any extension of credit,
(b) if an SPV elects not to exercise such option or otherwise
fails to provide all or any part of such extension of credit,
the Granting Lender shall be obligated to make such extension
of credit pursuant to the terms hereof and (c) the Granting
Lender shall remain for all purposes the Lender of record
under the Credit Documents, including for the purposes of
approving amendments, waivers and other modifications of the
Credit Documents. The making of an extension of credit by
an SPV hereunder shall utilize the Commitment of the Granting
Lender to the same extent as if such extension of credit had
been made by such Granting Lender. No SPV shall be liable for
any indemnity or similar payment obligation under the Credit
Documents (all liability for which shall remain with the
Granting Lender). Prior to the date that is one year and one
day after the payment in full of all outstanding commercial
paper or other senior indebtedness of any SPV, no party hereto
will institute against, or join any other Person in
instituting against, such SPV any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings. In
addition, notwithstanding anything to the contrary contained
herein, any SPV may (i) with notice to, but without the prior
consent of, the Borrower and the Administrative Agent and
without paying any processing fee therefor, assign all or a
portion of its interests in any Credit Obligations to the
Granting Lender or to any financial institutions (consented to
in writing by the Borrower and Administrative Agent) providing
liquidity or credit support to such SPV to support the funding
or maintenance of extensions of credit and (ii) disclose on a
confidential basis any non-public information relating to its
extensions of credit to any rating agency, commercial paper
dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPV. This Section shall survive
the termination of this Agreement and may not be amended
without the written consent of each SPV to which a grant has
been made pursuant to this Section.
12. CONFIDENTIALITY. Each Lender agrees that it will make no
disclosure of any information furnished to it by the Borrower
or any of its Affiliates unless such information shall have
become public, except:
(a) In connection with operations under or the enforcement of this
Agreement or any other Credit Document;
(b) To any proposed Assignee or Credit Participant who agrees
(subject to the exceptions provided in this Agreement) to
preserve the confidentiality of any confidential information
relating to the Borrower or any of its Affiliates received
from such Lender;
(c) To the applicable bank regulatory or other governmental
agencies relating to such Lender or pursuant to any statutory
or regulatory requirement or any mandatory court order,
subpoena or other legal process;
(d) To any parent or corporate Affiliate of such Lender; provided,
however, that any such Person shall also agree to comply with
the restrictions set forth in this Section 12 with respect to
such information;
(e) To its independent counsel, auditors and other professional
advisors with an instruction to such Person to keep such
information confidential;
54
(f) In connection with any litigation or arbitration proceedings
to which such Lender is a party; and
(g) With the prior written consent of the Borrower, to any other
Person.
Notwithstanding the foregoing, this Section shall not apply to information which
is obtained or was previously obtained by a Lender from a third person who,
insofar as is known to such Lender, is not subject to a duty of confidentiality.
In addition, the Lenders and their Affiliates may include references to the
Borrower and its Affiliates, the credit facility provided hereby and, with the
consent of the Borrower, which consent shall not be unreasonably withheld, their
trade names, trademarks and logos in connection with any advertising or
marketing undertaken by any such Lender or its Affiliates.
Notwithstanding the foregoing, the Administrative Agent and the Lenders (and
each employee, representative, agent or advisor of the Administrative Agent or
the Lenders) may disclose to any and all Persons, without limitation of any
kind, the U.S. tax treatment and U.S. tax structure of this transaction and all
materials of any kind (including opinions or other tax analyses) that are
provided to the Administrative Agent or the Lenders relating to such tax
treatment and tax structure.
13. NOTICES. Except as otherwise specified in this Agreement, any notice
required to be given pursuant to this Agreement shall be given in
writing. Any notice, demand or other communication in connection with
this Agreement shall be deemed to be given if given in writing
(including telex, telecopy (confirmed by telephone or writing) or
similar teletransmission) addressed as provided below (or to the
addressee at such other address as the addressee shall have specified
by notice actually received by the addressor), and if either
(a) actually delivered in fully legible form to such address (evidenced
in the case of a telex by receipt of the correct answerback) or
(b) in the case of a letter, five days shall have elapsed after the
same shall have been deposited in the United States mails, with
first-class postage prepaid and registered or certified.
If to the Borrower, to it at the following address:
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
ATTENTION: Xxxx X. Xxxx
Xxxxx Xxxxxxx
With a copy to:
Xxxxxxx, Xxxxxxxx & Xxxxxxx
1800 Provident Tower
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
ATTENTION: Xxxx X. Xxxxxxxx
55
If to the Administrative Agent or any Lender, to it at its address set
forth on the signature pages of this Agreement, to the attention of the account
officer specified on the signature page, with a copy to the Administrative
Agent.
14. AMENDMENTS, CONSENTS, WAIVERS, ETC.
14.1. LENDER CONSENTS FOR AMENDMENTS. Except as otherwise set forth
herein, the Administrative Agent may (and upon the written
request of the Required Majority Lenders the Administrative
Agent shall) take or refrain from taking any action under this
Agreement or any other Credit Document, including giving its
written consent to any modification of or amendment to and
waiving in writing compliance with any covenant or condition
in this Agreement or any other Credit Document (other than an
Interest Rate Protection Agreement) or any Default or Event of
Default, all of which actions shall be binding upon all of the
Lenders; PROVIDED, HOWEVER, that:
(a) Except as provided below, without the written consent of the
Lenders owning at least a majority of the Percentage Interests
(disregarding the Percentage Interest of any Nonperforming
Lender so long as such Lender is treated equally with the
other Lenders with respect to any actions enumerated below),
no written modification of, amendment to, consent with respect
to, waiver of compliance with or waiver of a Default under,
any of the Credit Documents (other than an Interest Rate
Protection Agreement) shall be made.
(b) Without the written consent of such Lenders as own 100% of the
Percentage Interests (disregarding the Percentage Interest of
any Nonperforming Lender so long as such Lender is treated
equally with the other Lenders with respect to any actions
enumerated below):
(i) None of the conditions specified in Section 5 shall be
amended, waived or modified.
(ii) No incurrence or existence of any Lien on all or substantially
all of the assets of the Borrower and its Subsidiaries shall
be permitted (other than any Liens from time to time securing
the Credit Obligations).
(iii) No contractual subordination of the Loans or any other portion
of the Credit Obligations to any other Indebtedness shall be
permitted.
(iv) No alteration shall be made of the Lenders' rights of set-off
contained in Section 8.2.4.
(v) No amendment to or modification of this Section 14.1 or the
definition of "Required Majority Lenders" shall be made.
(c) Without the written consent of each Lender that is directly
affected thereby (disregarding the Percentage Interest of
Nonperforming Lender so long as
56
such Lender is treated equally with the other Lenders with
respect to any actions enumerated below):
(i) No reduction shall be made in (A) the amount of principal of
the Loan owing to such Lender or (B) the interest rate on the
portion of the Loan owing to such Lender (other than
amendments and waivers approved by the Required Majority
Lenders that modify defined terms used in calculating the
Applicable Eurodollar Margin or that waive an increase in the
Applicable Rate as a result of an Event of Default) or (C) the
commitment fees owing to such Lender under Section 3.3.
(ii) No change shall be made in the stated, scheduled time of
payment of any portion of the Loan owing to such Lender or
interest thereon or fees relating to any of the foregoing
payable to such Lender and no waiver shall be made of any
Default under Section 8.1.1 with respect to such Lender.
(iii) No increase shall be made in the amount, or extension of the
term, of the stated Commitments of such Lender beyond that
provided for under Section 2.
(d) Without the written consent of such Lenders owning at least a
majority of the Percentage Interests of either of the 364-Day
Revolving Loan or the Three-Year Revolving Loan, as
applicable, (disregarding the Percentage Interest of any
Nonperforming Lender so long as such Lender is treated equally
with the other Lenders with respect to any actions enumerated
below) voting as a separate class, no change may be made in
the allocation of mandatory prepayments under Section 4.2
between the 364-Day Revolving Loan and the Three-Year
Revolving Loan.
(e) Without the written consent of the Administrative Agent, no
amendment or modification of any Credit Document shall affect
the rights or duties of the Administrative Agent under the
Credit Documents.
14.2. COURSE OF DEALING, AMENDMENTS AND WAIVERS. No course of
dealing between any Lender and the Borrower or any of its
Subsidiaries shall operate as a waiver of any of the Lenders'
rights under this Agreement or any other Credit Document or
with respect to the Credit Obligations. The Borrower
acknowledges that if the Lenders, without being required to do
so by this Agreement or any other Credit Document, give any
notice or information to any of the Borrower and its
Subsidiaries, or obtain any consent from any of them, the
Lenders shall not by implication have amended, waived or
modified any provision of this Agreement or any other Credit
Document, or created any duty to give any such notice or
information or to secure any such consent on any future
occasion. No delay or omission in exercising any right, or any
partial exercise of any right, on the part of any Lender under
this Agreement or any other Credit Document or with respect to
the Credit Obligations shall operate as a waiver of such right
or any other right, or preclude the further exercise of such
right or any other right, hereunder or thereunder. A waiver on
any one occasion shall not be construed as a bar to or waiver
of any right or remedy on any future occasion. No waiver,
57
consent or amendment with respect to this Agreement or any
other Credit Document shall be binding unless it is in writing
and signed by the Administrative Agent or the holders of the
required Credit Obligations.
15. DEFEASANCE. When all Credit Obligations have been paid,
performed and reasonably determined by the Lenders to have
been indefeasibly discharged in full, and if at the time no
Lender continues to be committed to extend any credit to the
Borrower hereunder or under any other Credit Document, this
Agreement and each other Credit Document shall terminate;
provided, however, that Sections 3.2.4, 3.4, 3.5, 9, 10.6.7,
10.9, 12, 16, 17 and 19 shall survive the termination of this
Agreement. Thereupon, on the Borrower's demand and at its cost
and expense, the Administrative Agent shall execute proper
instruments, acknowledging satisfaction of and discharging
this Agreement and each other Credit Document.
16. VENUE; SERVICE OF PROCESS; CERTAIN WAIVERS. The Borrower by
its execution hereof:
(a) Irrevocably submits to the nonexclusive jurisdiction of the
state courts of The Commonwealth of Massachusetts and to the
nonexclusive jurisdiction of the United States District Court
for the District of Massachusetts for the purpose of any suit,
action or other proceeding arising out of or based upon this
Agreement or any other Credit Document or the subject matter
hereof or thereof; and
(b) Waives to the extent not prohibited by applicable law, and
agrees not to assert, by way of motion, as a defense or
otherwise, in any such proceeding brought in any of the
above-named courts, any claim that it is not subject
personally to the jurisdiction of such court, that its
property is exempt or immune from attachment or execution,
that such proceeding is brought in an inconvenient forum, that
the venue of such proceeding is improper, or that this
Agreement or any other Credit Document, or the subject matter
hereof or thereof, may not be enforced in or by such court.
(c) Consents to service of process in any such proceeding in any
manner permitted by Chapter 223A of the General Laws of The
Commonwealth of Massachusetts and agrees that service of
process by registered or certified mail, return receipt
requested, at the address specified in or pursuant to Section
13 is reasonably calculated to give actual notice.
(d) Waives to the extent not prohibited by applicable law that
cannot be waived any right it may have to claim or recover in
any such proceeding any special exemplary, punitive or
consequential damages.
17. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LAW THAT CANNOT BE WAIVED, EACH OF THE Borrower AND
THE LENDERS HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT
ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY
RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND OR ACTION ARISING OUT OF THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT OR THE SUBJECT MATTER
58
HEREOF OR THEREOF OR ANY CREDIT OBLIGATION OR IN ANY WAY CONNECTED
WITH THE DEALINGS OF THE LENDERS OR THE BORROWER IN CONNECTION WITH
ANY OF THE ABOVE, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING AND WHETHER IN CONTRACT OR TORT OR OTHERWISE. The
Borrower acknowledges that it has been informed by the Lenders
that the provisions of this Section 17 constitute a material
inducement upon which each of the Lenders has relied, is
relying and will rely in entering into this Agreement and any
other Credit Document, and that it has reviewed the provisions
of this Section 17 with its counsel. Any of the Lenders or the
Borrower may file an original counterpart or a copy of this
Section 17 with any court as written evidence of the consent
of such Xxxxxx and the Borrower to the waiver of their rights
to trial by jury.
18. ACKNOWLEDGMENTS. The Borrower acknowledges:
(a) It has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Credit Documents;
(b) No Lender has a fiduciary relationship to the Borrower by
reason of this Agreement or the other Credit Documents, and
the relationship between any Lender, on the one hand, and the
Borrower on the other hand, arising from the Credit Documents
is solely that of debtor and creditor; and
(c) No joint venture exists between the Borrower and any Lender.
The parties have participated jointly in the negotiation and drafting of
this Agreement and the other Credit Documents with counsel sophisticated
in financing transactions. In the event an ambiguity or question of
intent or interpretation arises, this Agreement and the other Credit
Documents shall be construed as if drafted jointly by the parties and
no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provisions of this
Agreement and the other Credit Documents.
19. GENERAL. All covenants, agreements, representations and warranties made
in this Agreement or any other Credit Document or in certificates
delivered pursuant hereto or thereto shall be deemed to have been
material and relied on by each Lender, notwithstanding any investigation
made by any Lender on its behalf, and shall survive the execution and
delivery to the Lenders hereof and thereof. The invalidity or
unenforceability of any term or provision hereof shall not affect the
validity or enforceability of any other term or provision hereof. The
table of contents and headings in this Agreement are for convenience
of reference only and shall not limit, alter or otherwise affect the
meaning hereof. This Agreement and the other Credit Documents constitute
the entire understanding of the parties with respect to the subject
matter hereof and thereof and supersede all prior and current
understandings and agreements, whether written or oral with respect to
such subject matter. This Agreement may be executed in any number of
counterparts which together shall constitute one instrument. This
Agreement, and any issue, claim or proceeding arising out of or
relating to this Agreement or any other Credit Document or the conduct
of the parties hereto, whether now existing or hereafter arising and
whether in contract, tort or otherwise, shall be governed by and
construed in accordance with the laws (other than the conflict of laws
rules) of the Commonwealth of Massachusetts.
59
[the remainder of this page is intentionally blank]
60
Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first above written.
AMERICAN FINANCIAL GROUP, INC.
By: s:/Xxxx X. Xxxx
--------------------------------------
Name: Xxxx X. Xxxx
Title: Senior V.P. & Treasurer
FLEET NATIONAL BANK
By: s:/Xxxxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: Senior Associate
Financial Institutions Division
Mail Stop 00-00
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
BANK OF AMERICA, N.A.
By: s:/X. Xxxxxx
---------------------------------------
Name: X. Xxxxxx
Title:
Bank of America Plaza
000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxx X'Xxxxx
Xxxxxxxx: (000) 000-0000
KEYBANK NATIONAL ASSOCIATION
By: s:/Xxxx X. Xxxxx
---------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
000 Xxxxxx Xxxxxx XX-01-27-0606
Cleveland, Ohio 44114
Attention: Xxxx Xxxxx
Xxxxxxxx: (000) 000-0000
US BANK, NATIONAL ASSOCIATION
By: s:/Xxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
US Bank Tower
000 Xxxxxx Xxxxxx, 0xx xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxx Xxxxxxxxx
Telecopy: (000) 000-0000
CREDIT SUISSE FIRST BOSTON,
CAYMAN ISLANDS BRANCH
By: s:/Xxx Xxxxx
--------------------------------------
Name: Xxx Xxxxx
Title: Director
By: s:/Xxxxxxx Xxxx
--------------------------------------
Name: Xxxxxxx Xxxx
Title: Associate
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxx
Telecopy: (000) 000-0000
XXXXX BANK, N.A.
By: s:/Xxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
000 00xx Xxxxxx, X.X., 00xx xxxxx
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx Xxxxxxxxx
Telecopy: (000) 000-0000
PNC BANK, NATIONAL ASSOCIATION
By: s:/X. Xxxxxx Xxxxxxxxxx
-------------------------------------
Name: X. Xxxxxx Xxxxxxxxxx
Title: Senior Vice President
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxx Xxxxxxxxxx
Telecopy: (000) 000-0000
THE HUNTINGTON NATIONAL BANK
By: s:/Xxxxx Xxxx
--------------------------------------
Name: Xxxxx Xxxx
Title: Senior Vice President
000 Xxxx 0xx Xxxxxx -- Xxxxx 000X
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx Xxxx
Telecopy: 000-000-0000
THE BANK OF NEW YORK
By: s:/X. Xxxxx Xxxxxx, Xx.
--------------------------------------
Name: X. Xxxxx Xxxxxx, Xx.
Title: Vice President
Insurance Division
Xxx Xxxx Xxxxxx, 17th Floor
New York, New York 10288
LaSalle Bank national association
By: s:/Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Commercial Banking Officer
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopy: 000-000-0000
JPMORGAN CHASE BANK
By: s:/Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
000 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Telecopy: 000-000-0000
EXHIBIT 1
---------
CDO VARIABLE INTEREST ENTITIES
1. AMMC CDO I, launched on November 26, 1999.
2. AMMC CDO II, launched on November 27, 2000.
EXHIBIT 2.1.4(a)
---------------
FORM OF 364-Day REVOLVING NOTE
N- ,
-------- ---
FOR VALUE RECEIVED, the undersigned, AMERICAN FINANCIAL GROUP, INC., an
Ohio corporation (the "Borrower"), hereby promises to pay [Insert Lender] (the
"LENDER") or order, on the Final Maturity Date applicable to the 364-Day
Revolving Loans, the aggregate unpaid principal amount of the loans made by the
Lender to the Borrower pursuant to the Credit Agreement referred to below. The
Borrower promises to pay daily interest from the date hereof, computed as
provided in such Credit Agreement, on the aggregate principal amount of such
loans from time to time unpaid at the per annum rate applicable to such unpaid
principal amount as provided in such Credit Agreement and to pay interest on
overdue principal and, to the extent not prohibited by applicable law, on
overdue installments of interest and principal and fees at the rate specified in
such Credit Agreement, all such interest being payable at the times specified in
such Credit Agreement, except that all accrued interest shall be paid at the
stated or accelerated maturity hereof or upon the prepayment in full hereof.
Payments hereunder shall be made to Fleet National Bank, as
Administrative Agent for the payee hereof, at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000.
All loans made by the Lender pursuant to the Credit Agreement referred
to below and all repayments of the principal thereof shall be recorded by the
Lender and, prior to any transfer hereof, appropriate notations to evidence the
foregoing information with respect to each such loan then outstanding shall be
endorsed by the Lender on the schedule attached hereto or on a continuation of
such schedule attached to and made a part hereof; PROVIDED, HOWEVER, that the
failure of the Lender to make any such recordation or endorsement shall not
affect the obligations of the Borrower under this Note, such Credit Agreement or
under any other Credit Document.
This Note evidences borrowings under, and is entitled to the benefits
and security of, and is subject to the provisions of, the Amended and Restated
Credit Agreement dated as of November , 2003, as from time to time in effect
(the "CREDIT AGREEMENT"), among the maker, certain of its affiliates, the payee
hereof, the Administrative Agent and certain other lenders. The principal of
this Note is prepayable in the amounts and under the circumstances set forth in
the Credit Agreement, and may be prepaid in whole or from time to time in part,
all as set forth in the Credit Agreement. Terms defined in the Credit Agreement
and not otherwise defined herein are used herein with the meanings so defined.
In case an Event of Default shall occur, the entire principal of this
Note may become or be declared due and payable in the manner and with the effect
provided in the Credit Agreement.
This Note, and any issue, claim or proceeding arising out of or
relating to this Note or the conduct of the parties hereto, whether now existing
or hereafter arising and whether in contract,
tort or otherwise, shall be governed by and construed in accordance with the
laws (other than the conflict of laws rules) of The Commonwealth of
Massachusetts.
The parties hereto, including the Borrower and all guarantors and
endorsers, hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance and
enforcement of this Note, except as specifically otherwise provided in the
Credit Agreement, and assent to extensions of time of payment, or forbearance or
other indulgence without notice.
AMERICAN FINANCIAL GROUP, INC.
By
-----------------------------
Title:
2
LOAN AND PAYMENTS OF PRINCIPAL
Xxxxxx Xxxxxx of Unpaid Notation
Date of Loan Principal Repaid Principal Balance Made By
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3
EXHIBIT 2.1.4(b)
---------------
FORM OF THREE-YEAR REVOLVING NOTE
N- ,
-------- ---
FOR VALUE RECEIVED, the undersigned, AMERICAN FINANCIAL GROUP, INC., an
Ohio corporation (the "Borrower"), hereby promises to pay [Insert Lender] (the
"LENDER") or order, on the Final Maturity Date applicable to the Three-Year
Revolving Loans, the aggregate unpaid principal amount of the loans made by the
Lender to the Borrower pursuant to the Credit Agreement referred to below. The
Borrower promises to pay daily interest from the date hereof, computed as
provided in such Credit Agreement, on the aggregate principal amount of such
loans from time to time unpaid at the per annum rate applicable to such unpaid
principal amount as provided in such Credit Agreement and to pay interest on
overdue principal and, to the extent not prohibited by applicable law, on
overdue installments of interest and principal and fees at the rate specified in
such Credit Agreement, all such interest being payable at the times specified in
such Credit Agreement, except that all accrued interest shall be paid at the
stated or accelerated maturity hereof or upon the prepayment in full hereof.
Payments hereunder shall be made to Fleet National Bank, as
Administrative Agent for the payee hereof, at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000.
All loans made by the Lender pursuant to the Credit Agreement referred
to below and all repayments of the principal thereof shall be recorded by the
Lender and, prior to any transfer hereof, appropriate notations to evidence the
foregoing information with respect to each such loan then outstanding shall be
endorsed by the Lender on the schedule attached hereto or on a continuation of
such schedule attached to and made a part hereof; PROVIDED, HOWEVER, that the
failure of the Lender to make any such recordation or endorsement shall not
affect the obligations of the Borrower under this Note, such Credit Agreement or
under any other Credit Document.
This Note evidences borrowings under, and is entitled to the benefits
and security of, and is subject to the provisions of, the Amended and Restated
Credit Agreement dated as of November , 2003, as from time to time in effect
(the "CREDIT AGREEMENT"), among the maker, certain of its affiliates, the payee
hereof, the Administrative Agent and certain other lenders. The principal of
this Note is prepayable in the amounts and under the circumstances set forth in
the Credit Agreement, and may be prepaid in whole or from time to time in part,
all as set forth in the Credit Agreement. Terms defined in the Credit Agreement
and not otherwise defined herein are used herein with the meanings so defined.
In case an Event of Default shall occur, the entire principal of this
Note may become or be declared due and payable in the manner and with the effect
provided in the Credit Agreement.
This Note, and any issue, claim or proceeding arising out of or
relating to this Note or the conduct of the parties hereto, whether now existing
or hereafter arising and whether in contract, tort or otherwise, shall be
governed by and construed in accordance with the laws (other than the conflict
of laws rules) of The Commonwealth of Massachusetts.
The parties hereto, including the Borrower and all guarantors and
endorsers, hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance and
enforcement of this Note, except as specifically otherwise provided in the
Credit Agreement, and assent to extensions of time of payment, or forbearance or
other indulgence without notice.
AMERICAN FINANCIAL GROUP, INC.
By
----------------------------
Title:
2
LOAN AND PAYMENTS OF PRINCIPAL
Xxxxxx Xxxxxx of Unpaid Notation
Date of Loan Principal Repaid Principal Balance Made By
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3
EXHIBIT 5.2.1
-------------
FORM OF OFFICER'S CERTIFICATE
Pursuant to Section 2.1.3 of the Amended and Restated Credit Agreement
dated as of November , 2003, as now in effect (the "CREDIT AGREEMENT"), among
the undersigned American Financial Group, Inc. (the "BORROWER"), Fleet National
Bank, for itself and as Administrative Agent, and certain other Lenders, the
Borrower requests that a loan be made on the date specified below (the "CLOSING
DATE") in the following amount:
Closing Date:
Total amount of loan requested: $
-------------------
In connection with the foregoing request, the Borrower represents and
warrants that the representations and warranties contained in Section 7 of the
Credit Agreement are true and correct on and as of the date hereof with the same
force and effect as though originally made on and as of the date hereof; no
Default exists on the date hereof or will exist after giving effect to the
extension of credit requested hereby; and no Material Adverse Change has
occurred.
The foregoing representations and warranties shall be deemed made by
the Borrower on the requested Closing Date unless the Borrower shall have
notified the Administrative Agent in writing to the contrary prior to such
Closing Date.
Terms defined in the Credit Agreement and not otherwise defined herein
are used herein with the meanings so defined.
This certificate has been executed by a duly authorized Financial
Officer of the Borrower this day of , 200 .
AMERICAN FINANCIAL GROUP, INC.
By
----------------------------
Title:
EXHIBIT 6.3
-----------
Transactions with Affiliates
----------------------------
None.
EXHIBIT 7.1
-----------
Jurisdiction of
Name Incorporation Ownership
---- --------------- ---------
Great American Insurance Company Ohio 100%
Great American Financial Resources, Inc. Delaware 83%
Great American Life Insurance Company Ohio 100%
American Premier Underwriters, Inc. Pennsylvania 100%
National Interstate Corporation Ohio 68%
2
EXHIBIT 7.11
------------
DEFINED BENEFIT PLANS
None.
EXHIBIT 7.13
------------
ENVIRONMENTAL DISCLOSURE
As of 11/17/03
--------------------- -------------------------------------------------------
Site Description
--------------------- -------------------------------------------------------
BUCKEYE PIPE LINE
-----------------
In connection with the Company's sale of Buckeye Pipe Line Company
("Buckeye") to a limited partnership in 1986, Xxxxxxx obtained an Administrative
Consent Order ("ACO") from the New Jersey Department of Environmental Protection
("NJDEP") under the New Jersey Environmental Cleanup Responsibility Act of 1983
("ECRA") for all six of Buckeye's facilities in New Jersey. The primary
contaminant at these sites is petroleum hydrocarbons. The ACO required Buckeye
to conduct a sampling plan for environmental contamination at the New Jersey
facilities and to implement any required remediation. As part of the terms of
the 1986 sale, the Company agreed to pay for the costs of complying with the
ACO. The Company remains responsible for pre-1987 contamination under the terms
of the Share Purchase Agreement dated January 5, 1996.
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UNION ROAD
----------
This site was owned and operated by the New York Central Railroad from 1920
to 1959. Since that time the property has changed hands among several
corporations controlled by financier X. X. Xxxxxxx. XXXXX threatened AP, as
successor to the prior owner, with a lawsuit if AP does not agree to implement
the remedial design for the site. By agreeing to do so the Company has reduced
the ultimate cost of remediation and avoided the negative publicity of
litigation. Remediation was completed in 1996. Monitoring will be required
prospectively.
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ALTOONA
-------
The Pennsylvania Department of Environmental Resources ("PADER") has
notified AP that PADER believes AP to be a responsible party liable for
remediation of hazardous substances, including petroleum hydrocarbons and other
constituents. AP and the other PRPs have entered into a Consent Decree with
PADER for the remediation of the site. The Company is continuing to implement
the remedy required by the Consent Decree.
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ELKHART/PAOLI/XXXXXX X.X.
-------------------------
During the third quarter of 1994, the Special Court ruled that neither the
settlement of the Valuation Case, the conveyance of property "as is" nor the
constitution bars the U.S. government and other parties from pursuing AP for the
cost of environmental cleanup at these sites. Consequently, it became probable
in the third quarter of 1994 that the Company will incur some liability at each
site. The primary contaminants are petroleum hydrocarbons, creosote and PCBs.
The Company continues to attempt to negotiate agreements and/or workplans with
the government and other PRPs. An agreement has been reached with Conrail in
connection with Elkhart and Xxxxxx X.X. with respect to remediation costs.
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BERKS
-----
In October 1992 the original defendants in a case captioned UNITED STATES
OF AMERICA V. BERKS ASSOCIATES filed a third-party complaint against APU and
approximately 165 other companies. The complaint alleges that APU generated
waste oil, which was sent to this superfund site in Berks County, Pennsylvania.
AP immediately began investigating documents in possession of the original
defendant, the government and old PCTC/PRR records to determine what waste
1
BERKS (CONT'D)
-------------
oil, if any, its railroad predecessor sent to the site. Given the fact that
records were incomplete and sometimes conflicting, estimates of probable
liability and the amount of loss, if any, could not be reasonably estimated for
many months after October 1992. Under "Settlement Track Procedures" established
by the Court, the United States and the PRPs retained TLI, Inc. ("TLI"), a
technical consultant, to assist them in determining the amount, type and extent
of waste materials or other products which each PRP shipped to the site for
processing. On May 3, 1993 TLI issued a generator transaction summary
attributing to AP 4,266,845 "delivered gallons" of waste oil which is
approximately 3% of total waste into the site. XX challenged the total number of
gallons attributed to it as well as the classification of the oil. AP argued
that the total waste-in figure of 4,266,845 gallons attributed to it should be
readjusted downward to 908,258 gallons. In September 1999, the EPA formally
amended the Record of Decision (ROD) to change the remedy from on-site
incineration to stabilization. The state has not yet concurred. The amendment
reduced APU's estimated share of the remediation costs by approximately 50
percent. On January 19, 2001, the United States Department of Justice lodged a
proposed Remedial Design/Remedial Action ("RD/RA") Consent Decree in the United
States District Court that would settle its claims with the Company and numerous
other Potentially Responsible Parties ("PRPs") concerning the design and
construction of a stabilization remedy at the Berks site. This Consent Decree
would also address the past cost claims of the U.S. Environmental Protection
Agency ("EPA") and the PRP's contribution claims against the United States for
wastes sent to the site by various Federal agencies. Under the terms of the
Decree, entered in March 2001, and a Cost Sharing Agreement among ten other
private PRPs and the United States, the Company contributed $4,242,286.71 to
satisfy its obligations under the Decree with respect to the former Penn Central
Transportation Company ("PCTC") and Lehigh Valley Railroad ("LVRR"). In October
2001, a supplemental assessment of $898,610 was made against APU and $164,840
against Lehigh Valley. APU/LVRR agreed to settle past costs with the DEP in the
amount of $254,044 and $46,602, respectively. In September 2002, APU and LVRR
paid a Third Supplemental Assessment in the amount of $777,236.07 and
$142,576.05, respectively. The Company expects to receive a full refund of the
Third Supplemental Assessment in 2003.
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FOX POINT
---------
This site was sold by PCTC to the State of Delaware in 1975. During the
fourth quarter of 1993, XX received a letter from the Delaware Department of
Natural Resources and Environmental Control ("DNREC") notifying AP of its
alleged liability for the Fox Point site. Contamination in this case arises from
fill allegedly brought to the site in the 1960's in order to prepare the site
for development of an industrial park. APU executed a Consent Order with DNREC
in 1996 for the Remediation Investigation and Feasibility Study for the
property. This site is now undergoing remediation. The State of Delaware has
remediated approximately half of the site, which is forty acres in size, at a
cost of $1.75 million.
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CONRAIL ENVIRONMENTAL CLAIMS
----------------------------
Pursuant to the Rail Reorganization Act, Conrail, on June 1, 1996, became
owner and operator of the rail lines and assets previously operated by the
Company's rail predecessors.
In December 1994, Conrail threatened to assert several environmental claims
against the Company. Subsequent thereto, Conrail filed actions against American
Premier in connection with four environmental sites.
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2
AMTRAK REFUELING FACILITY
-------------------------
The site was owned and operated by PCTC and its predecessors. Evidence
suggests fuel oil contamination caused by PCTC and its predecessors, as well as
Amtrak. In August 1995 the Delaware Department of Natural Resources ("DNREC")
notified APU that it is a potentially responsible party ("PRP"). In August 1998
DNREC notified APU that DNREC analyzed split samples of fish tissue and
sediments taken in connection with the ongoing study of oil contamination. DNREC
reported these fish and sediment samples contained elevated levels of
polychlorinated biphenyls ("PCB's"). Based on this information, DNREC has
demanded that APU and Amtrak conduct a Phase 2 Remedial
Investigation/Feasibility Study of potential PCB contamination at the former
Wilmington Refueling Facility and in the nearby rivers. XXXXX's suggested
excavation and removal remedy is estimated at $7 million. APU and Amtrak will
carefully review remedial alternatives in light of the results of the Phase 2
Study which is due to be completed in 2004. This Study will impact future
remediation estimates at the site.
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SUNNYSIDE YARD
--------------
In 1997 the New York Department of Conservation ("NYDEC") notified APU that
Penn Central and its predecessors are responsible parties based on past
ownership and operation of the site located in Queens, NY. Amtrak is demanding
that APU pay 37.5 percent of past and future response costs at the site. Amtrak
and New Jersey Transit Corporation claim to have incurred $4.5 million in past
costs and estimate an additional $6 million for investigation and cleanup of the
site. The Company is evaluating several defenses at this site, including a
release from Amtrak executed in October of 1978, that may be applicable to this
site. In the interim the Company has agreed to participate in joint funding of
the Remedial Investigation/Feasibility Study at a cost to APU of approximately
$200,000.
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SOUTH AMBOY
-----------
In 1998 the New Jersey Department of Environmental Protection ("NJDEP")
alleged that APU, and predecessor of PCTC, has significant liability for PCB
contamination at the site based on the 40-year period in which the Penn Central
Railroad and Penn Central Transit Company allegedly operated the site. New
Jersey Transit ("NJT") claims that PCTC used PCB transformers for many more
years than NJT and should, therefore, pay most of the cleanup costs. NJT asked
NJDEP to issue a directive under the Spill Act that would subject APU to a
treble damage claim.
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CABLE COMPANY ENVIRONMENTAL LIABILITIES
---------------------------------------
When the Company disposed of its interest in the General Cable Corporation
in 1994, it was paid approximately $20,000,000 to assume liability for
environmental remediation at certain sites:
1. an operating steel mill and fabrication plant in Longview, Texas, known
as XxXxxxxxxx, Inc.;
2. a fabrication plant for drilling rigs in Vicksburg, Mississippi, also
operated by XxXxxxxxxx, Inc. and
3. a steel wire and spring manufacturing concern in Muncie, Indiana, known
as Indiana Steel and Wire.
In 1996 the Company completed a transaction whereby it "put" the liabilities
for the Longview and Vicksburg sites to Rowan Companies, Inc.
Soil and groundwater investigation and remediation are ongoing at the
Muncie site. In September 2002, the Texas Natural Resource Conservation
Commission ("TNRCC") issued a Certificate of Completion in connection with the
remediation conducted at another former General Cable site--922 Xxxxxx Road--in
Texas.
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3
LEHIGH VALLEY RAILROAD DERAILMENT, XXXXX, NY
--------------------------------------------
In 1991 Lehigh Valley Railroad was notified by the New York Department of
Environmental Conservation ("NYDEC") that it is a PRP in connection with the
derailment at the Gulf Road Crossing in XxXxx, NY, resulting in TCE contaminated
soil and groundwater. The Record of Decision ("ROD") was issued March 1997 and
includes construction of a waterline extension to connect all impacted residents
to a potable water supply, excavation of TCE contaminated soil, installation of
a bedrock vapor extraction system and long term monitoring.
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XXXXX'X XXXX, XXXXXXXXX, MA
---------------------------
By letter dated September 6, 2000, the United States EPA notified APU that
it has been identified as a PRP in connection with the Xxxxx'x Pond site in
Wellesley, Massachusetts. The U.S. EPA believes APU is a successor to a former
owner/operator of the site. The site is adjacent to property currently owned by
the Massachusetts Bay Transit Authority. The EPA estimates cleanup costs to be
approximately $3,600,000. APU's share, if any, cannot reasonably be determined
at this time.
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MAGNOLIA COMMERCE PARK
----------------------
This matter is pending in Alabama District Court. Plaintiff alleges fraud
and breach of contract in connection with the sale of the property. APU has
filed a Motion for Summary Judgment with respect to the fraud allegations in the
Complaint. Until the Court rules, APU's liability, if any, cannot reasonably be
determined. During the first half of 2003, XXX received a demand of $15M to
settle the case.
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4
EXHIBIT 10.1
------------
INTERESTS IN CREDITS
364 DAY REVOLVING LOANS
-----------------------
Commitment Percentage
Lender Amount Interest
------ -------------- ----------
Fleet National Bank $16,666,666.67 17.8571%
Bank of America, N.A. $16,666,666.67 17.8571%
KeyBank National Association $11,666,666.67 12.5001%
US Bank National Association $8,333,333.33 8.9286%
Credit Suisse First Boston,
Cayman Islands Branch $8,333,333.33 8.9286%
Xxxxx Bank, N.A. $8,333,333.33 8.9286%
The Huntington National Bank $6,666,666.67 7.1429%
PNC Bank, National Association $5,000,000.00 5.3571%
The Bank of New York $3,333,333.33 3.5714%
XX Xxxxxx Xxxxx Bank $3,333,333.00 3.5714%
LaSalle Bank National Association $5,000,000.00 5.3571%
TOTAL $93,333,333.00 100%
THREE YEAR REVOLVING LOANS
--------------------------
Commitment Percentage
Lender Amount Interest
------ -------------- ----------
Fleet National Bank $33,333,333.33 17.8571%
Bank of America, N.A. $33,333,333.33 17.8571%
KeyBank National Association $23,333,333.33 12.5001%
US Bank National Association $16,666,666.67 8.9286%
Credit Suisse First Boston,
Cayman Islands Branch $16,666,666.67 8.9286%
Xxxxx Bank, N.A. $16,666,666.67 8.9286%
The Huntington National Bank $13,333,333.33 7.1429%
PNC Bank, National Association $10,000,000.00 5.3571%
The Bank of New York $ 6,666,666.67 3.5714%
XX Xxxxxx Xxxxx Bank $ 6,666,667.00 3.5714%
LaSalle Bank National Association $10,000,000.00 5.3571%
TOTAL $186,666,667.00 100%
EXHIBIT 11.1.1
--------------
ASSIGNMENT AND ACCEPTANCE
This Agreement, dated as of , 200 , is between
, a Lender under the Credit Agreement referred to
below (the "ASSIGNOR"), and (the "ASSIGNEE").
For valuable consideration, the receipt of which is hereby
acknowledged, the Assignor agrees with the Assignee as follows:
1. REFERENCE TO CREDIT AGREEMENT; DEFINITIONS. Reference is made to the
Amended and Restated Credit Agreement dated as of November __, 2003, as from
time to time in effect (the "CREDIT AGREEMENT"), among American Financial Group,
Inc. an Ohio corporation, certain of its affiliates, certain lenders (the
"LENDERS"), and Fleet National Bank, as administrative agent (the
"ADMINISTRATIVE AGENT"). Terms defined in the Credit Agreement and not otherwise
defined herein are used herein with the meanings so defined.
2. ASSIGNMENT AND ASSUMPTION. Without recourse, representation or
warranty of any kind (other than as set forth in Section 3 below), the Assignor
hereby sells and assigns to the Assignee, and the Assignee hereby purchases and
assumes from the Assignor, the interests set forth in EXHIBIT A hereto (the
"ASSIGNED INTERESTS") in and to the Assignor's rights and obligations under the
Credit Agreement and the other Credit Documents (other than Interest Rate
Protection Agreements) as of the Assignment Date (as defined in Exhibit A
hereto).
3. REPRESENTATIONS, WARRANTIES, ETC.
3.1. ASSIGNOR'S REPRESENTATIONS AND WARRANTIES. The Assignor:
(a) represents that as of the date hereof, it owns the
Assigned Interests beneficially and of record, free of any Liens or
adverse claims.
(b) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or
any other Credit Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other Credit Document or any other instrument or
document furnished pursuant thereto, other than 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; and
(c) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower
and its Subsidiaries or the performance by the Borrower and its
Subsidiaries of their obligations under the Credit Agreement, any other
Credit Document or any other instrument or document furnished pursuant
hereto or thereto.
3.2. ASSIGNEE'S REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The
Assignee:
(a) represents and warrants that it is legally authorized to
enter into this Agreement;
(b) represents and warrants that (i) it is incorporated or
organized under the laws of the United States of America or a state
thereof or (ii) it will perform all of the obligations relating to
United States income tax withholding under Section 3.5 of the Credit
Agreement;
(c) confirms that it has received a copy of the Credit
Agreement and any other Credit Document which it has requested,
together with copies of the most recent financial statements delivered
pursuant to Section 6.4 of the Credit Agreement and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Agreement;
(d) agrees that it will, independently and without reliance
upon the Assignor or any other Person which has become a 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 Credit Agreement and the other Credit
Documents; and
(e) agrees that it will be bound by the provisions of the
Credit Agreement and will perform in accordance with their terms all
the obligations which by the terms of the Credit Agreement and the
other Credit Documents are required to be performed by it as a Lender.
4. ASSIGNEE PARTY TO CREDIT AGREEMENT; ASSIGNOR RELEASE OF OBLIGATIONS.
From and after the Assignment Date, (a) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Agreement, have the rights
and obligations of a Lender thereunder and under the other Credit Documents and
(b) the Assignor shall, to the extent provided in this Agreement, relinquish its
rights and be released from its obligations under the Credit Agreement and the
other Credit Documents.
5. NOTICES. All notices and other communications required to be given
or made to the Assignee under this Agreement, the Credit Agreement or any other
Credit Document shall be given or made at the address of the Assignee set forth
on Exhibit A hereto or at such other address as the Assignee shall have
specified to the Assignor, the Borrower and the Agent in writing.
6. FURTHER ASSURANCES. The parties hereto agree to execute and deliver
such other instruments and documents and to take such other actions as any party
hereto may reasonably request in connection with the transactions contemplated
by this Agreement.
7. GENERAL. This Agreement, the Credit Agreement and the other Credit
Documents constitute the entire agreement of the parties hereto with respect to
the subject matter hereof and supersede all current and prior agreements and
understandings, whether written or oral, with respect to such subject matter.
The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof. The invalidity or
unenforceability
2
of any provision hereof shall not affect the validity or enforceability of
any other provision hereof, and any invalid or unenforceable provision shall be
modified so as to be enforced to the maximum extent of its validity or
enforceability. This Agreement may be executed in any number of counterparts,
which together shall constitute one instrument, and shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns,
including as such successors and assigns all holders of any Credit Obligation.
This Agreement shall be governed by and construed in accordance with the laws
(other than the conflict of laws rules) of The Commonwealth of
Massachusetts.
3
Each of the Assignor and the Assignee has caused this Agreement to be
executed and delivered by its duly authorized officer as an agreement under seal
as of the date first above written.
ASSIGNOR
-----------------------------------
By
---------------------------------
Title:
ASSIGNEE
-----------------------------------
By
---------------------------------
Title:
The foregoing is approved:
AMERICAN FINANCIAL GROUP, INC.
By
---------------------------------
Title:
FLEET NATIONAL BANK,
as Administrative Agent under the Credit Agreement
By
---------------------------------
Title:
4
AMERICAN FINANCIAL GROUP, INC.
EXHIBIT A
TO
ASSIGNMENT AND ACCEPTANCE
-------------------------
1. PARTIES
Assignor:
-----------------------------------------------
Assignee:
-----------------------------------------------
Assignee Address:
---------------------------------------
---------------------------------------
---------------------------------------
Assignee Telecopy:
---------------------------------------
2. ASSIGNMENT DATE:
---------------------------------------
3. ASSIGNED INTERESTS
Outstanding 364-Day Revolving Loan: $
-----------------------
Outstanding Three-Year Revolving Loan: $
-----------------------
Over-all Revolving Loan Commitment: $
-----------------------
(sum of assigned unfunded commitment
plus amounts set forth above)
Unpaid interest and commitment fees with respect to the assigned
credits described above, accrued through the Assignment Date, are for the
account of the Assignor unless set forth to the contrary herein.
4. XXXXXXXX'S POST ASSIGNMENT INTERESTS
After giving effect to this assignment, the Assignor represents that
its interests in the following credits are summarized as follows:
364-Day Revolving Loan Commitment: $
----------------------
Three-Year Revolving Loan Commitment: $
----------------------
5. XXXXXXXX'S POST ASSIGNMENT INTERESTS
After giving effect to this assignment, the Assignee represents that
its interests in the following credits are summarized as follows:
364-Day Revolving Loan Commitment: $
----------------------
Three-Year Revolving Loan Commitment: $
----------------------
2
