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CREDIT AGREEMENT
among
VESTA INSURANCE GROUP, INC.,
THE LENDERS NAMED HEREIN,
SOUTHTRUST BANK OF ALABAMA,
NATIONAL ASSOCIATION,
as Documentation Agent,
and
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA,
as Administrative Agent
$200,000,000 Revolving Credit Facilities
Arranged by
FIRST UNION CAPITAL MARKETS CORP.
Dated as of September 24, 1996,
As amended and restated as of April 8, 1997
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TABLE OF CONTENTS
Page
RECITALS............................ 1
ARTICLE I
DEFINITIONS
1.1. Defined Terms............................................... 1
1.2. Accounting Terms............................................ 15
1.3. Other Terms; Construction................................... 15
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
2.1. Commitments; Loans.......................................... 15
2.2. Borrowings.................................................. 16
2.3. Notes....................................................... 18
2.4. Termination and Reduction of Commitments.................... 18
2.5. Mandatory and Voluntary Payments and Prepayments............ 18
2.6. Interest.................................................... 19
2.7. Fees........................................................ 20
2.8. Interest Periods............................................ 21
2.9. Conversions and Continuations............................... 21
2.10. Method of Payments; Computations............................ 22
2.11. Recovery of Payments........................................ 24
2.12. Use of Proceeds............................................. 24
2.13. Pro Rata Treatment; Sharing of Payments..................... 24
2.14. Increased Costs; Change in Circumstances; Illegality; etc... 25
2.15. Taxes....................................................... 26
2.16. Compensation................................................ 28
ARTICLE III
CONDITIONS OF BORROWING
3.1. Conditions of Loans under Original Credit Agreement......... 29
3.2. Conditions to Effectiveness of this Agreement............... 29
3.3. Conditions to All Loans..................................... 31
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1. Corporate Organization and Power........................... 32
4.2. Authorization; Enforceability.............................. 32
4.3. No Violation............................................... 32
4.4. Governmental Authorization; Permits........................ 32
4.5. Litigation................................................. 33
4.6. Taxes...................................................... 33
4.7. Subsidiaries............................................... 33
4.8. Full Disclosure............................................ 33
4.9. Margin Regulations......................................... 33
4.10. No Material Adverse Change................................. 34
4.11. Financial Matters.......................................... 34
4.12. Ownership of Properties.................................... 35
4.13. ERISA...................................................... 35
4.14. Environmental Matters...................................... 35
4.15. Compliance With Laws....................................... 36
4.16. Regulated Industries....................................... 36
4.17. Insurance.................................................. 36
ARTICLE V
AFFIRMATIVE COVENANTS
5.1. GAAP Financial Statements.................................. 36
5.2. Statutory Financial Statements............................. 37
5.3. Other Business and Financial Information................... 38
5.4. Corporate Existence; Franchises; Maintenance of Properties. 40
5.5. Compliance with Laws....................................... 40
5.6. Payment of Obligations..................................... 40
5.7. Insurance.................................................. 41
5.8. Maintenance of Books and Records; Inspection............... 41
5.9. Dividends.................................................. 41
5.10. Further Assurances......................................... 41
ARTICLE VI
FINANCIAL COVENANTS
6.1. Capitalization Ratio...................................... 42
6.2. Consolidated Net Worth.................................... 42
6.3. Fixed Charge Coverage Ratio............................... 42
6.4. Risk-Based Capital........................................ 42
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ARTICLE VII
NEGATIVE COVENANTS
7.1. Merger; Consolidation....................................... 43
7.2. Indebtedness................................................ 43
7.3. Liens....................................................... 43
7.4. Disposition of Assets....................................... 45
7.5. Transactions with Affiliates................................ 46
7.6. Lines of Business........................................... 46
7.7. Fiscal Year................................................. 46
7.8. Accounting Changes.......................................... 46
ARTICLE VIII
EVENTS OF DEFAULT
8.1. Events of Default........................................... 46
8.2. Remedies: Termination of Commitments, Acceleration, etc..... 48
ARTICLE IX
THE ADMINISTRATIVE AGENT
9.1. Appointment................................................ 49
9.2. Nature of Duties........................................... 49
9.3. Exculpatory Provisions..................................... 50
9.4. Reliance by Administrative Agent........................... 50
9.5. Non-Reliance on Administrative Agent and Other Lenders..... 51
9.6. Notice of Default.......................................... 51
9.7. Indemnification............................................ 51
9.8. The Administrative Agent in its Individual Capacity........ 52
9.9. Successor Administrative Agent............................. 52
9.10. Documentation Agent........................................ 53
ARTICLE X
MISCELLANEOUS
10.1. Fees and Expenses......................................... 53
10.2. Indemnification........................................... 53
10.3. Governing Law; Consent to Jurisdiction.................... 54
10.4. Arbitration; Preservation and Limitation of Remedies...... 54
10.5. Notices................................................... 55
10.6. Amendments, Waivers, etc.................................. 56
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10.7. Assignments, Participations............................... 56
10.8. No Waiver................................................. 58
10.9. Successors and Assigns.................................... 59
10.10. Survival.................................................. 59
10.11. Severability.............................................. 59
10.12. Construction.............................................. 59
10.13. Confidentiality........................................... 59
10.14. Counterparts.............................................. 60
10.15. Entire Agreement.......................................... 60
10.16. Effect of Amendment and Restatement....................... 60
EXHIBITS
Exhibit A-1 Form of Facility A Note
Exhibit A-2 Form of Facility B Note
Exhibit B-1 Form of Notice of Borrowing
Exhibit B-2 Form of Notice of Conversion/Continuation
Exhibit C Form of Assignment and Acceptance
Exhibit D-1 Form of Compliance Certificate (GAAP Financial Statements)
Exhibit D-2 Form of Compliance Certificate (Statutory Financial Statements)
Exhibit E Form of Opinion of Xxxxxx X. Xxxxxxxx
SCHEDULES
Schedule 4.4 Licenses
Schedule 4.7 Subsidiaries
Schedule 7.3 Liens
Schedule 4.7
Subsidiaries
Percentage owned
(directly or
indirectly)
Subsidiary Direct Owner by Borrower
---------- ------------ -------------
The Hawaiian Insurance & Guaranty
Company, Limited Vesta Fire Insurance Corporation 100%
J. Xxxxxx Xxxxxx, Inc. Vesta Insurance Group, Inc. 100%
J. Xxxxxx Xxxxxx of
Texas, Inc. Vesta Fire Insurance Corporation 100%
Liberty National Reinsurance
Company, Ltd. Vesta Insurance Group, Inc. 100%
Sheffield Insurance Corporation Vesta Fire Insurance Corporation 100%
Vesta Capital Trust I Vesta Insurance Group, Inc. 100%
Vesta Financial Corporation Vesta Fire Insurance Corporation 100%
Vesta Fire Insurance Company Vesta Insurance Group, Inc. 100%
Vesta Insurance Corporation Vesta Fire Insurance Corporation 100%
Vesta Lloyds Insurance Company Vesta Fire Insurance Corporation 100%
Vesta Management Corporation of Texas Vesta Insurance Group, Inc. 100%
Vesta County Mutual Vesta Management Corporation
Insurance Company of Texas (control pursuant to 100%
management contract)
Schedule 7.3
Liens
1. $6.6 million lien on corporate aircraft with Michigan National Bank.
"Assignment and Acceptance" shall mean an Assignment and Acceptance
entered into between a Lender and an Assignee and accepted by the Administrative
Agent and the Borrower, in substantially the form of EXHIBIT C.
"Authorized Officer" shall mean any officer of the Borrower authorized
by resolution of the board of directors of the Borrower to take the action
specified herein with respect to such officer and whose signature and incumbency
shall have been certified to the Administrative Agent by the secretary or an
assistant secretary of the Borrower.
"Bankruptcy Code" shall mean 11 U.S.C. (S)(S) 101 et seq., as amended
-- ---
from time to time, and any successor statute.
"Base Rate" shall mean the higher of (i) the per annum interest rate
publicly announced from time to time by First Union in Charlotte, North
Carolina, to be its prime or base rate (which may not necessarily be its best
lending rate), as adjusted to conform to changes as of the opening of business
on the date of any such change in such prime or base rate, or (ii) 0.5% per
annum plus the Federal Funds Rate, as adjusted to conform to changes as of the
opening of business on the date of any such change in the Federal Funds Rate.
"Base Rate Loan" shall mean, at any time, any Loan that bears interest
at such time at the Base Rate.
"Borrower Margin Stock" shall mean shares of capital stock of the
Borrower that are held by the Borrower or any of its Subsidiaries and that
constitute Margin Stock.
"Borrowing" shall mean the incurrence by the Borrower (including as a
result of conversions and continuations of outstanding Loans pursuant to SECTION
2.9) on a single date of a group of Loans of a single Class and Type and, in the
case of LIBOR Loans, as to which a single Interest Period is in effect.
"Borrowing Date" shall mean, with respect to any Borrowing, the date
upon which such Borrowing is made.
"Business Day" shall mean (i) any day other than a Saturday or Sunday,
a legal holiday or a day on which commercial banks in Charlotte, North Carolina
are required by law to be closed and (ii) in respect of any determination
relevant to a LIBOR Loan, any such day that is also a day on which tradings are
conducted in the London interbank Eurodollar market.
"Capitalization Ratio" shall mean, as of the last day of any fiscal
quarter, the ratio of (i) Consolidated Indebtedness as of such date to (ii) the
sum of Consolidated Indebtedness and Consolidated Net Worth, each as of such
date; provided, however, that, solely for purposes of this definition and not
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for any other purpose of this Agreement, Consolidated Indebtedness shall not
include (a) the Junior Subordinated Debentures, (b) the beneficial interests of
the Trust in the Junior Subordinated Debentures, or (c) the Borrower's guarantee
to the holders of the Trust Securities of all of the Trust's obligations under
the Trust Securities.
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"Class" shall have the meaning given to such term in SECTION 2.2(A).
"Commitments" shall mean the Facility A Commitments and the Facility B
Commitments.
"Compliance Certificate" shall mean a fully completed and duly
executed certificate in the form of EXHIBIT D-1 or EXHIBIT D-2, as applicable.
"Consolidated Indebtedness" shall mean, as of the last day of any
fiscal quarter, the aggregate (without duplication) of all Indebtedness of the
Borrower and its Subsidiaries as of such date, determined on a consolidated
basis in accordance with Generally Accepted Accounting Principles.
"Consolidated Interest Expense" shall mean, for any period, the sum
(without duplication) of total interest expense of the Borrower and its
Subsidiaries for such period in respect of Indebtedness of the Borrower and its
Subsidiaries (including, without limitation, all such interest expense accrued
or capitalized during such period, whether or not actually paid during such
period, and including all net amounts paid or accrued by the Borrower and its
Subsidiaries during such period under or in respect of Hedge Agreements and all
commitment fees and other ongoing fees in respect of Indebtedness (including the
facility fees provided for under SECTIONS 2.7(A) and 2.7(B), but excluding the
administrative fees payable under the Fee Letter) paid or accrued by the
Borrower and its Subsidiaries during such period), determined on a consolidated
basis in accordance with Generally Accepted Accounting Principles, and
including, without limitation, all such interest expense in respect of the
Junior Subordinated Debentures.
"Consolidated Net Income" shall mean, for any period, net income (or
loss) for the Borrower and its Subsidiaries for such period, determined on a
consolidated basis in accordance with Generally Accepted Accounting Principles.
"Consolidated Net Worth" shall mean, at any time, the net worth of the
Borrower and its Subsidiaries at such time, determined on a consolidated basis
in accordance with Generally Accepted Accounting Principles; provided, however,
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that, notwithstanding the foregoing, determinations of Consolidated Net Worth
shall (i) exclude any preferred stock or other class of equity securities that,
by its stated terms (or by the terms of any class of equity securities issuable
upon conversion thereof or in exchange therefor), or upon the occurrence of any
event, matures or is mandatorily redeemable, or is redeemable at the option of
the holders thereof, in whole or in part, at any time prior to one (1) year
after the Facility A Maturity Date, (ii) include the aggregate outstanding
amount (up to $100,000,000) of the beneficial interests of the Trust in the
Junior Subordinated Debentures, and (iii) be made without regard to the
requirements of Statement of Financial Accounting Standards No. 115 issued by
the Financial Accounting Standards Board.
"Contingent Obligation" shall mean, with respect to any Person, any
direct or indirect liability of such Person with respect to any Indebtedness,
liability or other obligation (the "primary obligation") of another Person (the
"primary obligor"), whether or not contingent, (a) to purchase, repurchase or
otherwise acquire such primary obligation or any property
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constituting direct or indirect security therefor, (b) to advance or provide
funds (i) for the payment or discharge of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency or any balance sheet item, level of income
or financial condition of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor in respect thereof
to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of any such primary obligation against loss or failure or
inability to perform in respect thereof; provided, however, that, with respect
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to the Borrower and its Subsidiaries, the term Contingent Obligation shall not
include (y) endorsements for collection or deposit in the ordinary course of
business or (z) obligations entered into by an Insurance Subsidiary in the
ordinary course of its business under insurance policies or contracts issued by
it or to which it is a party, including reinsurance agreements (and security
posted by any such Insurance Subsidiary in the ordinary course of its business
to secure obligations thereunder).
"Covenant Compliance Worksheet" shall mean a fully completed worksheet
in the form of Attachment A to EXHIBIT D-1 or EXHIBIT D-2, as applicable.
"Credit Documents" shall mean this Agreement, the Notes, the Fee
Letter, any Hedge Agreement to which the Borrower and any Lender are parties,
and all other agreements, instruments, documents and certificates now or
hereafter executed and delivered to the Administrative Agent or any Lender by or
on behalf of the Borrower or any of its Subsidiaries with respect to this
Agreement and the transactions contemplated hereby, in each case as amended,
modified, supplemented or restated from time to time.
"Default" shall mean any event or condition that, with the passage of
time or giving of notice, or both, would constitute an Event of Default.
"Dollars" or "$" shall mean dollars of the United States of America.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"ERISA Affiliate" shall mean any Person (including any trade or
business, whether or not incorporated) that would be deemed to be under "common
control" with, or a member of the same "controlled group" as, the Borrower or
any of its Subsidiaries, within the meaning of Sections 414(b), (c), (m) or (o)
of the Internal Revenue Code or Section 4001 of ERISA.
"ERISA Event" shall mean any of the following with respect to a Plan
or Multiemployer Plan, as applicable: (i) a Reportable Event with respect to a
Plan or a Multiemployer Plan, (ii) a complete or partial withdrawal by the
Borrower or any ERISA Affiliate from a Multiemployer Plan that results in
liability under Section 4201 or 4204 of ERISA, or the receipt by the Borrower or
any ERISA Affiliate of notice from a Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that
it intends to terminate or has terminated under Section 4041A of ERISA, (iii)
the distribution by the Borrower or any ERISA Affiliate under Section 4041 or
4041A of ERISA of a notice of intent to terminate any Plan or the
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taking of any action to terminate any Plan, (iv) the commencement of proceedings
by the PBGC under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the receipt by the Borrower
or any ERISA Affiliate of a notice from any Multiemployer Plan that such action
has been taken by the PBGC with respect to such Multiemployer Plan, (v) the
institution of a proceeding by any fiduciary of any Multiemployer Plan against
the Borrower or any ERISA Affiliate to enforce Section 515 of ERISA, which is
not dismissed within thirty (30) days, (vi) the imposition upon the Borrower or
any ERISA Affiliate of any liability under Title IV of ERISA, other than for
PBGC premiums due but not delinquent under Section 4007 of ERISA, or the
imposition or threatened imposition of any Lien upon any assets of the Borrower
or any ERISA Affiliate as a result of any alleged failure to comply with the
Internal Revenue Code or ERISA in respect of any Plan, (vii) the engaging in or
otherwise becoming liable for a nonexempt Prohibited Transaction by the Borrower
or any ERISA Affiliate, (viii) a violation of the applicable requirements of
Section 404 or 405 of ERISA or the exclusive benefit rule under Section 401(a)
of the Internal Revenue Code by any fiduciary of any Plan for which the Borrower
or any of its ERISA Affiliates may be directly or indirectly liable or (ix) the
adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) of the
Internal Revenue Code or Section 307 of ERISA, would result in the loss of tax-
exempt status of the trust of which such Plan is a part if the Borrower or an
ERISA Affiliate fails to timely provide security to such Plan in accordance with
the provisions of such sections.
"Eligible Assignee" shall mean (i) a commercial bank organized under
the laws of the United States or any state thereof and having total assets in
excess of $1,000,000,000, (ii) a commercial bank organized under the laws of any
other country that is a member of the Organization for Economic Cooperation and
Development or any successor thereto (the "OECD") or a political subdivision of
any such country and having total assets in excess of $1,000,000,000, provided
--------
that such bank or other financial institution is acting through a branch or
agency located in the United States, in the country under the laws of which it
is organized or in another country that is also a member of the OECD, (iii) the
central bank of any country that is a member of the OECD, (iv) a finance company
or other financial institution or fund (other than an insurance company or an
insurance holding company) that is engaged in making, purchasing or otherwise
investing in loans in the ordinary course of its business and having total
assets in excess of $1,000,000,000, (v) any Affiliate of an existing Lender or
(vi) any other Person approved by the Required Lenders, which approval shall not
be unreasonably withheld.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations (other than internal
reports prepared by any Person in the ordinary course of its business and not in
response to any third party action or request of any kind) or proceedings
relating in any way to any Environmental Law or any permit issued, or any
approval given, under any such Environmental Law (collectively, "Claims"),
including, without limitation, (i) any and all Claims by Governmental
Authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law and (ii) any and
all Claims by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from Hazardous
Substances or arising from alleged injury or threat of injury to human health or
the environment.
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"Environmental Laws" shall mean any and all federal, state and local
laws, statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations, rules of common law and orders of courts or Governmental
Authorities, relating to the protection of human health or occupational safety
or the environment, now or hereafter in effect and in each case as amended from
time to time, including, without limitation, requirements pertaining to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transportation, handling, reporting, licensing, permitting, investigation or
remediation of Hazardous Substances.
"Event of Default" shall have the meaning given to such term in
SECTION 8.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"Existing Loans" shall have the meaning given to such term in SECTION
2.1(C).
"Facilities" shall mean the revolving credit facilities established
pursuant to SECTIONS 2.1(A) and 2.1(B).
"Facility A Commitment" shall mean, with respect to any Lender at any
time, the amount set forth opposite such Lender's name on its signature page
hereto under the caption "Facility A Commitment" or, if such Lender has entered
into one or more Assignment and Acceptances, the amount set forth for such
Lender at such time in the Register maintained by the Administrative Agent
pursuant to SECTION 10.7(B) as such Lender's "Facility A Commitment," as such
amount may be reduced at or prior to such time pursuant to the terms hereof.
"Facility B Commitment" shall mean, with respect to any Lender at any
time, the amount set forth opposite such Lender's name on its signature page
hereto under the caption "Facility B Commitment" or, if such Lender has entered
into one or more Assignment and Acceptances, the amount set forth for such
Lender at such time in the Register maintained by the Administrative Agent
pursuant to SECTION 10.7(B) as such Lender's "Facility B Commitment," as such
amount may be reduced at or prior to such time pursuant to the terms hereof.
"Facility A Lender" shall mean any Lender (i) holding all or a portion
of any outstanding Facility A Loans and (ii) having a Facility A Commitment
(unless the Facility A Commitments have been terminated pursuant to this
Agreement).
"Facility B Lender" shall mean any Lender (i) holding all or a portion
of any outstanding Facility B Loans and (ii) having a Facility B Commitment
(unless the Facility A Commitments have been terminated pursuant to this
Agreement).
"Facility A Loans" shall have the meaning given to such term in
SECTION 2.1(A).
"Facility B Loans" shall have the meaning given to such term in
SECTION 2.1(B).
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"Facility A Maturity Date" shall mean July 31, 2001.
"Facility B Maturity Date" shall mean the date 364 days after the date
of this Agreement.
"Facility A Notes" shall mean the promissory notes of the Borrower in
substantially the form of EXHIBIT A-1, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.
"Facility B Notes" shall mean the promissory notes of the Borrower in
substantially the form of EXHIBIT A-2, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.
"Facility A Termination Date" shall mean the Facility A Maturity Date
or such earlier date of termination of the Facility A Commitments pursuant to
SECTION 2.4 or SECTION 8.2.
"Facility B Termination Date" shall mean the Facility B Maturity Date
or such earlier date of termination of the Facility B Commitments pursuant to
SECTION 2.4 or SECTION 8.2.
"Federal Funds Rate" shall mean, for any period, a fluctuating per
annum interest rate (rounded upwards, if necessary, to the nearest 1/100 of one
percentage point) equal for each day during such period 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 published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by the Administrative Agent.
"Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System or any successor thereto.
"Fee Letter" shall mean the letter from First Union to the Borrower,
dated March 18, 1997, relating to the administrative fees payable to the
Administrative Agent in respect of the transactions contemplated by this
Agreement, as amended, modified or supplemented from time to time.
"Fixed Charge Coverage Ratio" shall mean, as of the last day of any
fiscal quarter, the ratio of:
(i) the aggregate for the period of four consecutive fiscal
quarters ending on such date (the "Measurement Period") of (x) Consolidated
Net Income, (y) Consolidated Interest Expense, to the extent taken into
account in the calculation of Consolidated Net Income for such period, and
(z) federal, state, local and other income taxes, to the extent taken into
account in the calculation of Consolidated Net Income for such period, all
determined on a consolidated basis for the Borrower and its Subsidiaries in
accordance with Generally Accepted Accounting Principles; to
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(ii) the sum for the Measurement Period of (x) Consolidated
Interest Expense and (y) the aggregate of all amounts paid by the Borrower
as dividends or distributions in respect of its equity securities (other
than as contemplated by clause (z) below), and (z) the aggregate of all
amounts paid by the Borrower to purchase, redeem, retire or otherwise
acquire its equity securities (other than pursuant to employee benefit
plans approved by the board of directors of the Borrower in the ordinary
course of business), but only to the extent that such amounts paid during
the Measurement Period exceed the lesser of (1) twenty-five percent (25%)
of Consolidated Net Income for the Measurement Period and (2) five percent
(5%) of Consolidated Net Worth as of the last day of the Measurement
Period.
"Generally Accepted Accounting Principles" shall mean generally accepted
accounting principles, as set forth in the statements, opinions and
pronouncements of the Accounting Principles Board, the American Institute of
Certified Public Accountants and the Financial Accounting Standards Board (or,
to the extent not so set forth in such statements, opinions and pronouncements,
as generally followed by entities similar in size to the Borrower and engaged in
generally similar lines of business), consistently applied and maintained and in
conformity with those used in the preparation of the most recent financial
statements of the Borrower referred to in SECTION 4.11(A).
"Governmental Authority" shall mean any nation or government, any state or
other political subdivision thereof and any central bank thereof, any municipal,
local, city or county government, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Hazardous Substances" shall mean any substances or materials (i) that are
or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants or toxic substances under any Environmental Law, (ii) that are
defined by any Environmental Law as toxic, explosive, corrosive, ignitable,
infectious, radioactive, mutagenic or otherwise hazardous, (iii) the presence of
which require investigation or response under any Environmental Law, (iv) that
constitute a nuisance, trespass or health or safety hazard to Persons or
neighboring properties, (v) that consist of underground or aboveground storage
tanks, whether empty, filled or partially filled with any substance or (vi) that
contain, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or wastes, crude oil, nuclear fuel, natural gas or synthetic gas.
"Hedge Agreement" shall mean any interest or foreign currency rate swap,
cap, collar, option, hedge, forward rate or other similar agreement or
arrangement designed to protect against fluctuations in interest rates or
currency exchange rates.
"Historical Statutory Statements" shall have the meaning given to such term
in SECTION 4.11(B).
"Indebtedness" shall mean, with respect to any Person (without
duplication), (i) all indebtedness of such Person for borrowed money or in
respect of loans or advances, (ii) all
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obligations of such Person evidenced by notes, bonds, debentures or similar
instruments, (iii) all reimbursement obligations of such Person with respect to
surety bonds, letters of credit and bankers' acceptances (in each case, whether
or not drawn or matured and in the stated amount thereof), (iv) all obligations
of such Person to pay the deferred purchase price of property or services, (v)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person, (vi) all
obligations of such Person as lessee under leases that are or should be, in
accordance with Generally Accepted Accounting Principles, recorded as capital
leases, to the extent such obligations are required to be so recorded, (vii) all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any capital stock or other equity securities
that, by their stated terms (or by the terms of any equity securities issuable
upon conversion thereof or in exchange therefor), or upon the occurrence of any
event, mature or are mandatorily redeemable, or are redeemable at the option of
the holder thereof, in whole or in part, at any time prior to the Facility A
Maturity Date, (viii) the net termination obligations of such Person under any
Hedge Agreements, calculated as of any date as if such agreement or arrangement
were terminated as of such date, (ix) all Contingent Obligations of such Person
and (x) all indebtedness referred to in clauses (i) through (ix) above secured
by any Lien on any property or asset owned or held by such Person regardless of
whether the indebtedness secured thereby shall have been assumed by such Person
or is nonrecourse to the credit of such Person, and with respect to the Borrower
and its Subsidiaries shall include, without limitation (but without
duplication), the Junior Subordinated Debentures, the beneficial interests of
the Trust in the Junior Subordinated Debentures, and the Borrower's guarantee to
the holders of the Trust Securities of all of the Trust's obligations under the
Trust Securities.
"Insurance Regulatory Authority" shall mean, with respect to any Insurance
Subsidiary, the insurance department or similar Governmental Authority charged
with regulating insurance companies or insurance holding companies, in its state
of domicile and, to the extent that it has regulatory authority over such
Insurance Subsidiary, in each other jurisdiction in which such Insurance
Subsidiary conducts business or is licensed to conduct business.
"Insurance Subsidiary" shall mean any Subsidiary of the Borrower the
ability of which to pay dividends is regulated by an Insurance Regulatory
Authority or that is otherwise required to be regulated thereby in accordance
with the applicable Requirements of Law of its state of domicile.
"Interest Period" shall have the meaning given to such term in SECTION 2.8.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"Junior Subordinated Debentures" shall mean the Borrower's 8.525% Junior
Subordinated Deferrable Interest Debentures due January 15, 2027, issued
pursuant to the Indenture, dated as of January 31, 1997, between the Borrower
and First Union National Bank of North Carolina, as Debenture Trustee, as
amended, modified or supplemented from time to time.
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"LIBOR Loan" shall mean, at any time, any Loan that bears interest at such
time at the Adjusted LIBOR Rate.
"LIBOR Rate" shall mean, with respect to each LIBOR Loan comprising part of
the same Borrowing for any Interest Period, an interest rate per annum obtained
by dividing (i) (y) the rate of interest appearing on Telerate Page 3750 (or any
successor page) or (z) if no such rate is available, or at the option of the
Administrative Agent in any event, the rate of interest determined by the
Administrative Agent to be the rate or the arithmetic mean of rates (rounded
upward, if necessary, to the nearest 1/16 of one percentage point) at which
Dollar deposits in immediately available funds are offered by First Union to
first-tier banks in the London interbank Eurodollar market, in each case under
(y) and (z) above at approximately 11:00 a.m., London time, two (2) Business
Days prior to the first day of such Interest Period for a period substantially
equal to such Interest Period and in an amount substantially equal to the amount
of First Union's LIBOR Loan comprising part of such Borrowing, by (ii) the
amount equal to 1.00 minus the Reserve Requirement (expressed as a decimal) for
such Interest Period.
"Lender" shall mean each financial institution signatory hereto and each
other financial institution that becomes a "Lender" hereunder pursuant to
SECTION 10.7, and their respective successors and assigns.
"Lending Office" shall mean, with respect to any Lender, the office of such
Lender designated as its "Lending Office" on its signature page hereto or in an
Assignment and Acceptance, or such other office as may be otherwise designated
in writing from time to time by such Lender to the Borrower and the
Administrative Agent. A Lender may designate separate Lending Offices as
provided in the foregoing sentence for the purposes of making or maintaining
different Types of Loans, and, with respect to LIBOR Loans, such office may be a
domestic or foreign branch or Affiliate of such Lender.
"Licenses" shall have the meaning given to such term in SECTION 4.4(C).
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, security
interest, lien (statutory or otherwise), preference, priority, charge or other
encumbrance of any nature, whether voluntary or involuntary, including, without
limitation, the interest of any vendor or lessor under any conditional sale
agreement, title retention agreement, capital lease or any other lease or
arrangement having substantially the same effect as any of the foregoing.
"Loans" shall mean any or all of the Facility A Loans and the Facility B
Loans.
"Margin Percentage" shall mean, at any time, the applicable percentage (a)
to be added to the LIBOR Rate pursuant to SECTION 2.6 for purposes of
determining the Adjusted LIBOR Rate for either Class of Loan and (b) to be used
in calculating the facility fees payable pursuant to SECTIONS 2.7(A) and 2.7(B),
in each case as determined under the following matrix with reference to the
ratings given to the Borrower's senior unsecured long-term publicly traded
Indebtedness without third party credit enhancement:
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Applicable Margin Applicable Margin Applicable Margin Applicable Margin
Percentage for Percentage for Percentage for Percentage for
LIBOR Loans LIBOR Loans Facility Fee Facility Fee
Rating Status (Facility A) (Facility B) (Facility A) Facility B)
------------- ------------ ------------ ------------ -----------
Level I Status 0.165% 0.185% 0.085% 0.065%
Level II Status 0.250% 0.270% 0.100% 0.080%
Level III Status 0.300% 0.320% 0.150% 0.130%
For purposes of determining any Margin Percentage at any date:
(i) "Level I Status" exists at such date if, as of such date,
the Borrower has senior unsecured long-term publicly traded Indebtedness
without third party credit enhancement that is rated (y) not lower than A3
by Moody's or (z) not lower than A- by Standard & Poor's;
(ii) "Level II Status" exists at such date if, as of such date,
the Borrower has senior unsecured long-term publicly traded Indebtedness
without third party credit enhancement that is rated (y) not lower than
Baa1 by Moody's or (z) not lower than BBB+ by Standard & Poor's; and
(iii) "Level III Status" exists at such date if, as of such date,
neither Level I Status nor Level II Status exists (whether because the
applicable ratings are not provided at such time by Moody's and Standard &
Poor's or are lower in each instance than the respective minimum ratings
required for Level II Status);
provided, however, that if at any time the difference between the Moody's and
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Standard & Poor's ratings at such time is more than one (1) "Rating Grade," then
for purposes of determining the Margin Percentages at such time, the higher of
such two ratings shall be reduced to the rating that is the median between the
higher rating and the lower rating (or its equivalent); or, if the median is not
mathematically determinable, then the higher of such two ratings shall be
reduced to the rating that would have been the median if the higher of such two
ratings were actually one Rating Grade higher. For purposes of the foregoing
sentence, the term "Rating Grade" shall mean and refer to the different debt
ratings (for example, A1, A2, A3 for Moody's and A+, A and A- for Standard &
Poor's) within any particular debt rating category (in the foregoing example,
the rating category of "A" for both Moody's and Standard & Poor's). Any
adjustment required in the Margin Percentages as a result of a change in ratings
as provided hereinabove shall be effective as of the tenth (10th) Business Day
after the effective date of such change.
"Margin Stock" shall have the meaning given to such term in Regulation U.
"Material Adverse Change" shall mean a material adverse change in the
condition (financial or otherwise), operations, business, properties or
financial prospects of the Borrower or the Borrower and its Subsidiaries, taken
as a whole.
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"Material Adverse Effect" shall mean a material adverse effect upon (i) the
condition (financial or otherwise), operations, business, properties or
financial prospects of the Borrower or the Borrower and its Subsidiaries, taken
as a whole, (ii) the ability of the Borrower to perform its obligations under
this Agreement or any of the other Credit Documents or (iii) the legality,
validity or enforceability of this Agreement or any of the other Credit
Documents or the rights and remedies of the Administrative Agent and the Lenders
hereunder and thereunder.
"Moody's" shall mean Xxxxx'x Investors Service, Inc., its successors and
assigns.
"Multiemployer Plan" shall mean any "multiemployer plan" within the meaning
of Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate
makes, is making or is obligated to make contributions or has made or been
obligated to make contributions.
"NAIC" shall mean the National Association of Insurance Commissioners and
any successor thereto.
"Notes" shall mean the Facility A Notes and the Facility B Notes.
"Notice of Borrowing" shall have the meaning given to such term in SECTION
2.2(B).
"Notice of Conversion/Continuation" shall have the meaning given to such
term in SECTION 2.9(B).
"Obligations" shall mean all principal of and interest (including, to the
greatest extent permitted by law, post-petition interest) on the Loans and all
fees, expenses, indemnities and other obligations owing, due or payable at any
time by the Borrower to the Administrative Agent, any Lender or any other Person
entitled thereto, under this Agreement or any of the other Credit Documents.
"Original Closing Date" shall mean the date upon which the initial
extensions of credit were made pursuant to the Original Credit Agreement.
"Original Credit Agreement" shall have the meaning given to such term in
the recitals hereof.
"Original Credit Agreement Date" shall mean September 24, 1996.
"Original Lenders" shall mean the banks and other financial institutions
that are "Lenders" (within the meaning of the Original Credit Agreement) under
the Original Credit Agreement as of the Amendment Effective Date.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.
"Participant" shall have the meaning given to such term in SECTION 10.7(D).
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"Permitted Liens" shall have the meaning given to such term in SECTION 7.3.
"Person" shall mean any corporation, association, joint venture,
partnership, limited liability company, organization, business, individual,
trust, government or agency or political subdivision thereof or any other legal
entity.
"Plan" shall mean any "employee pension benefit plan" within the meaning of
Section 3(2) of ERISA that is subject to the provisions of Title IV of ERISA
(other than a Multiemployer Plan) and to which the Borrower or any ERISA
Affiliate may have any liability.
"Prohibited Transaction" shall mean any transaction described in (i)
Section 406 of ERISA that is not exempt by reason of Section 408 of ERISA or by
reason of a Department of Labor prohibited transaction individual or class
exemption or (ii) Section 4975(c) of the Internal Revenue Code that is not
exempt by reason of Section 4975(c)(2) or 4975(d) of the Internal Revenue Code.
"Quarterly Statement" shall mean, with respect to any Insurance Subsidiary
for any fiscal quarter, the quarterly financial statements of such Insurance
Subsidiary as required to be filed with the Insurance Regulatory Authority of
its jurisdiction of domicile, together with all exhibits, schedules,
certificates and actuarial opinions required to be filed or delivered therewith.
"Register" shall have the meaning given to such term in SECTION 10.7(B).
"Regulations D, G, T, U and X" shall mean Regulations D, G, T, U and X,
respectively, of the Federal Reserve Board, and any successor regulations.
"Reportable Event" shall mean (i) any "reportable event" within the meaning
of Section 4043(c) of ERISA for which the 30-day notice under Section 4043(a) of
ERISA has not been waived by the PBGC (including any failure to meet the minimum
funding standard of, or timely make any required installment under, Section 412
of the Internal Revenue Code or Section 302 of ERISA, regardless of the issuance
of any waivers in accordance with Section 412(d) of the Internal Revenue Code),
(ii) any such "reportable event" subject to advance notice to the PBGC under
Section 4043(b)(3) of ERISA, (iii) any application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Internal
Revenue Code, and (iv) a cessation of operations described in Section 4062(e) of
ERISA.
"Required Lenders" shall mean, at any time, the Lenders holding outstanding
Loans and Commitments (or, after the termination of the Commitments, outstanding
Loans) representing more than sixty-six and two-thirds percent (66-2/3%) of the
aggregate at such time of all outstanding Loans and Commitments (or, after the
termination of the Commitments, the aggregate at such time of all outstanding
Loans).
"Requirement of Law" shall mean, with respect to any Person, the charter,
articles or certificate of organization or incorporation and bylaws or other
organizational or governing documents of such Person, and any statute, law,
treaty, rule, regulation, order, decree, writ, injunction or determination of
any arbitrator or court or other Governmental Authority, in each
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case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject or otherwise pertaining to
any or all of the transactions contemplated by this Agreement and the other
Credit Documents.
"Reserve Requirement" shall mean, with respect to any Interest Period, the
reserve percentage (expressed as a decimal) in effect from time to time during
such Interest Period, as provided by the Federal Reserve Board, applied for
determining the maximum reserve requirements (including, without limitation,
basic, supplemental, marginal and emergency reserves) applicable to First Union
under Regulation D with respect to "Eurocurrency liabilities" within the meaning
of Regulation D, or under any similar or successor regulation with respect to
Eurocurrency liabilities or Eurocurrency funding.
"Significant Subsidiary" shall mean, at the relevant time of determination,
any Subsidiary of the Borrower having (after the elimination of intercompany
accounts) (i) assets constituting at least 10% of the total assets of the
Borrower and its Subsidiaries on a consolidated basis, (ii) revenues
constituting at least 10% of the total revenues of the Borrower and its
Subsidiaries on a consolidated basis, or (iii) net earnings constituting at
least 10% of the total net earnings of the Borrower and its Subsidiaries on a
consolidated basis, in each case as determined as of the date of the financial
statements of the Borrower and its Subsidiaries most recently delivered under
SECTION 5.1 prior to such time (or, with regard to determinations at any time
prior to the initial delivery of financial statements under SECTION 5.1, as of
the date of the most recent financial statements referred to in SECTION
4.11(A)).
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, its successors and assigns.
"Statutory Accounting Principles" shall mean, with respect to any Insurance
Subsidiary, the statutory accounting practices prescribed or permitted by the
relevant Insurance Regulatory Authority of its state of domicile, consistently
applied and maintained and in conformity with those used in the preparation of
the most recent Historical Financial Statements.
"Subsidiary" shall mean, with respect to any Person, any corporation or
other Person of which more than fifty percent (50%) of the outstanding capital
stock having ordinary voting power to elect a majority of the board of
directors, in the case of a corporation, or of the ownership or beneficial
interests, in the case of a Person not a corporation, is at the time, directly
or indirectly, owned or controlled by such Person and one or more of its other
Subsidiaries or a combination thereof (irrespective of whether, at the time,
securities of any other class or classes of any such corporation or other Person
shall or might have voting power by reason of the happening of any contingency).
When used without reference to a parent entity, the term "Subsidiary" shall be
deemed to refer to a Subsidiary of the Borrower.
"Torchmark" shall mean Torchmark Corporation, a Delaware corporation, and
its successors and assigns.
"Trust" shall mean Vesta Capital Trust I, a Delaware statutory business
trust.
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"Trust Securities" shall mean the 8.525% Capital Securities issued by the
Trust and representing preferred beneficial interests in the Trust.
"Type" shall have the meaning given to such term in SECTION 2.2(A).
"Unfunded Pension Liability" shall mean, with respect to any Plan or
Multiemployer Plan, the excess of its benefit liabilities under Section
4001(a)(16) of ERISA over the current value of its assets, determined in
accordance with the applicable assumptions used for funding under Section 412 of
the Code for the applicable plan year.
"VFIC" shall mean Vesta Fire Insurance Corporation, an Alabama corporation.
"Wholly Owned" shall mean, with respect to any Subsidiary of any Person,
that 100% of the outstanding capital stock or other ownership interests of such
Subsidiary is owned, directly or indirectly, by such Person.
.1. Accounting Terms. Except as specifically provided otherwise in this
----------------
Agreement, all accounting terms used herein that are not specifically defined
shall have the meanings customarily given them, and all financial computations
hereunder shall be made, in accordance with Generally Accepted Accounting
Principles (or, to the extent that such terms apply solely to any Insurance
Subsidiary or if otherwise expressly required, Statutory Accounting Principles).
Notwithstanding the foregoing, in the event that any changes in Generally
Accepted Accounting Principles or Statutory Accounting Principles after the date
hereof are required to be applied to the transactions described herein and would
affect the computation of the financial covenants contained in SECTIONS 6.1
through 6.4, as applicable, such changes shall be followed only from and after
the date this Agreement shall have been amended to take into account any such
changes. References to amounts on particular exhibits, schedules, lines, pages
and columns of any Annual Statement or Quarterly Statement are based on the
format promulgated by the NAIC for the 1995 Annual Statements and Quarterly
Statements. In the event such format is changed in future years so that
different information is contained in such items or they no longer exist, or if
the Annual Statement or Quarterly Statement is replaced by the NAIC or by any
Insurance Regulatory Authority after the date hereof such that different forms
of financial statements are required to be furnished by the Insurance
Subsidiaries in lieu thereof, such references shall be to information consistent
with that reported in the referenced item in the 1995 Annual Statements or
Quarterly Statements, as the case may be.
.2. Other Terms; Construction. Unless otherwise specified or unless the
-------------------------
context otherwise requires, all references herein to sections, annexes,
schedules and exhibits are references to sections, annexes, schedules and
exhibits in and to this Agreement, and all terms defined in this Agreement shall
have the defined meanings when used in any other Credit Document or any
certificate or other document made or delivered pursuant hereto.
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ARTICLE I
AMOUNT AND TERMS OF THE LOANS
I.1. Commitments; Loans. (a) Each Facility A Lender severally agrees,
------------------
subject to and on the terms and conditions of this Agreement, to make loans
(each, a "Facility A Loan," and collectively, the "Facility A Loans") to the
Borrower, from time to time on any Business Day during the period from and
including the Amendment Effective Date to but not including the Facility A
Termination Date, in an aggregate principal amount at any time outstanding not
exceeding its Facility A Commitment at such time, provided that no Borrowing of
--------
Facility A Loans shall be made if, immediately after giving effect thereto, the
aggregate principal amount of Facility A Loans outstanding at such time would
exceed the aggregate Facility A Commitments at such time. Subject to and on the
terms and conditions of this Agreement, the Borrower may borrow, repay and
reborrow Facility A Loans.
(b) Each Facility B Lender severally agrees, subject to and on the terms
and conditions of this Agreement, to make loans (each, a "Facility B Loan," and
collectively, the "Facility B Loans") to the Borrower, from time to time on any
Business Day during the period from and including the Amendment Effective Date
to but not including the Facility B Termination Date, in an aggregate principal
amount at any time outstanding not exceeding its Facility B Commitment at such
time, provided that no Borrowing of Facility B Loans shall be made if,
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immediately after giving effect thereto, the aggregate principal amount of
Facility B Loans outstanding at such time would exceed the aggregate Facility B
Commitments at such time. Subject to and on the terms and conditions of this
Agreement, the Borrower may borrow, repay and reborrow Facility B Loans.
(c) On the Amendment Effective Date, the aggregate outstanding principal
amount of any and all Loans (as defined in the Original Credit Agreement) made
pursuant to the Original Credit Agreement and outstanding on the Amendment
Effective Date (collectively, the "Existing Loans") shall automatically be
converted to an equivalent principal amount of Facility A Loans hereunder, made
by the Facility A Lenders ratably in accordance with their respective Facility A
Commitments, and for all purposes of this Agreement shall be deemed to be
Facility A Loans hereunder and entitled to the benefits of this Agreement and
the other Credit Documents.
I.2. Borrowings. (a) The Facility A Loans and the Facility B Loans (each,
----------
a "Class" of Loan) shall, at the option of the Borrower and subject to the terms
and conditions of this Agreement, be either Base Rate Loans or LIBOR Loans
(each, a "Type" of Loan), provided that (i) all Loans comprising the same
--------
Borrowing shall, unless otherwise specifically provided herein, be of the same
Type, and (ii) notwithstanding any other provision of this Agreement, all
Facility B Loans made prior to the third (3rd) Business Day after the Amendment
Effective Date shall be made initially as Base Rate Loans.
(b) In order to make a Borrowing (other than Borrowings involving
continuations or conversions of outstanding Loans, which shall be made pursuant
to SECTION 2.9), the Borrower will give the Administrative Agent written notice
not later than 11:00 a.m., Charlotte time, three (3) Business Days prior to each
Borrowing to be comprised of LIBOR Loans and one (1)
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Business Day prior to each Borrowing to be comprised of Base Rate Loans;
provided, however, that a request for a Borrowing of Facility B Loans to be made
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on the Amendment Effective Date as Base Rate Loans may, at the discretion of the
Administrative Agent, be given later than the time specified therefor as set
forth hereinabove. Each such notice (each, a "Notice of Borrowing") shall be
irrevocable, shall be given in the form of EXHIBIT B-1 and shall specify (a) the
aggregate principal amount, Class and initial Type of the Loans to be made
pursuant to such Borrowing, (b) in the case of a Borrowing of LIBOR Loans, the
initial Interest Period to be applicable thereto, and (c) the requested
Borrowing Date, which shall be a Business Day. Notwithstanding anything to the
contrary contained herein:
(i) the aggregate principal amount of each Borrowing comprised
of Base Rate Loans shall not be less than $1,000,000 or, if greater, an
integral multiple of $500,000 in excess thereof (or, if less, in the amount
of the Aggregate Unutilized Facility A Commitments or Aggregate Unutilized
Facility B Commitments, as applicable), and the aggregate principal amount
of each Borrowing comprised of LIBOR Loans shall not be less than
$3,000,000 or, if greater, an integral multiple of $1,000,000 in excess
thereof;
(ii) if the Borrower shall have failed to designate the Class of
Loans comprising a Borrowing, the Borrower shall be deemed to have
requested a Borrowing comprised of Facility A Loans;
(iii) if the Borrower shall have failed to designate the Type of
Loans comprising a Borrowing, the Borrower shall be deemed to have
requested a Borrowing comprised of Base Rate Loans; and
(iv) if the Borrower shall have failed to select the duration of
the Interest Period to be applicable to any Borrowing of LIBOR Loans, then
the Borrower shall be deemed to have selected an Interest Period with a
duration of one month.
(c) Upon its receipt of a Notice of Borrowing, the Administrative Agent
will promptly notify each Lender having a Commitment under the relevant Facility
of the proposed Borrowing. Not later than 1:00 p.m., Charlotte time, on the
requested Borrowing Date, each applicable Lender will make available to the
Administrative Agent at its office referred to in SECTION 10.5 (or at such other
location as the Administrative Agent may designate) an amount, in Dollars and in
immediately available funds, equal to the amount of the Loan to be made by such
Lender. To the extent the applicable Lenders have made such amounts available
to the Administrative Agent as provided hereinabove, the Administrative Agent
will make the aggregate of such amounts available to the Borrower in accordance
with subsection (d) below and in like funds as received by the Administrative
Agent.
(d) The Borrower hereby authorizes the Administrative Agent to disburse
the proceeds of each Borrowing in accordance with the terms of any written
instructions from any of the Authorized Officers, provided that the
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Administrative Agent shall not be obligated under any circumstances to forward
amounts to any account not listed in an Account Designation Letter. The
Borrower may at any time deliver to the Administrative Agent an Account
Designation Letter listing any additional accounts or deleting any accounts
listed in a previous Account Designation Letter.
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(e) Unless the Administrative Agent has received, prior to 1:00 p.m.,
Charlotte time, on the relevant Borrowing Date, written notice from a Lender
that such Lender will not make available to the Administrative Agent such
Lender's ratable portion, if any, of the relevant Borrowing, the Administrative
Agent may assume that such Lender has made such portion available to the
Administrative Agent in immediately available funds on such Borrowing Date in
accordance with subsection (c) above, and the Administrative Agent may, in
reliance upon such assumption, but shall not be obligated to, make a
corresponding amount available to the Borrower on such Borrowing Date. If and
to the extent that such Lender shall not have made such portion available to the
Administrative Agent, and the Administrative Agent shall have made such
corresponding amount available to the Borrower, such Lender, on the one hand,
and the Borrower, on the other, severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount, together with interest
thereon for each day from the date such amount is made available to the Borrower
until the date such amount is repaid to the Administrative Agent, (i) in the
case of such Lender, at the Federal Funds Rate, and (ii) in the case of the
Borrower, at the rate of interest applicable at such time to the Class and Type
of Loans comprising such Borrowing, as determined under the provisions of
SECTION 2.6. If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount shall constitute such Lender's Loan as part of
such Borrowing for purposes of this Agreement. The failure of any Lender to
make any Loan required to be made by it as part of any Borrowing shall not
relieve any other Lender of its obligation, if any, hereunder to make its Loan
as part of such Borrowing, but no Lender shall be responsible for the failure of
any other Lender to make the Loan to be made by such other Lender as part of any
Borrowing.
(f) Each Lender may, at its option, make and maintain any Loan at, to or
for the account of any of its Lending Offices, provided that any exercise of
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such option shall not affect the obligation of the Borrower to repay such Loan
to or for the account of such Lender in accordance with the terms of this
Agreement.
I.3. Notes. (a) The Loans made by each Lender shall be evidenced (i) in
-----
the case of Facility A Loans, by a Facility A Note appropriately completed in
substantially the form of EXHIBIT A-1, and (ii) in the case of Facility B Loans,
by a Facility B Note appropriately completed in substantially the form of
EXHIBIT A-2.
(b) Each Facility A Note issued to a Facility A Lender shall (i) be
executed by the Borrower, (ii) be payable to the order of such Lender, (iii) be
dated as of the Amendment Effective Date, (iv) be in a stated principal amount
equal to such Lender's Facility A Commitment, (v) bear interest in accordance
with the provisions of SECTION 2.6, as the same may be applicable to the
Facility A Loans made by such Lender from time to time, and (vi) be entitled to
all of the benefits of this Agreement and the other Credit Documents and subject
to the provisions hereof and thereof.
(c) Each Facility B Note issued to a Facility B Lender shall (i) be
executed by the Borrower, (ii) be payable to the order of such Lender, (iii) be
dated as of the Amendment Effective Date, (iv) be in a stated principal amount
equal to such Lender's Facility B Commitment, (v) bear interest in accordance
with the provisions of SECTION 2.6, as the same may be applicable to the
Facility B Loans made by such Lender from time to time, and (vi) be
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entitled to all of the benefits of this Agreement and the other Credit Documents
and subject to the provisions hereof and thereof.
(d) Each Lender will record on its internal records the amount of each
Loan made by it and each payment received by it in respect thereof and will, in
the event of any transfer of any of its Notes, either endorse on the reverse
side thereof or on a schedule attached thereto (or any continuation thereof) the
outstanding principal amount of the Loans evidenced thereby as of the date of
transfer or provide such information on a schedule to the Assignment and
Acceptance relating to such transfer; provided, however, that the failure of any
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Lender to make any such recordation or provide any such information, or any
error therein, shall not affect the Borrower's obligations under this Agreement
or the Notes.
I.4. Termination and Reduction of Commitments. (a) The Facility A
----------------------------------------
Commitments shall be automatically and permanently terminated on the Facility A
Maturity Date unless sooner terminated pursuant to subsection (b) below or
SECTION 8.2. The Facility B Commitments shall be automatically and permanently
terminated on the Facility B Maturity Date unless sooner terminated pursuant to
subsection (b) below or SECTION 8.2.
(b) At any time and from time to time after the date hereof, upon not less
than five (5) Business Days' prior written notice to the Administrative Agent,
the Borrower may terminate in whole or reduce in part the Aggregate Unutilized
Facility A Commitments or the Aggregate Unutilized Facility B Commitments,
provided that any such partial reduction shall be in an aggregate amount of not
--------
less than $10,000,000 or, if greater, an integral multiple thereof. The amount
of any termination or reduction made under this subsection (b) may not
thereafter be reinstated. Each reduction of the Commitments pursuant to this
subsection (b) shall be applied ratably among the Facility A Lenders or the
Facility B Lenders, as the case may be, according to their respective
Commitments under the applicable Facility.
I.5. Mandatory and Voluntary Payments and Prepayments. (a) Except to the
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extent due or made sooner pursuant to the provisions of this Agreement, (i) the
Borrower will repay the aggregate outstanding principal amount of the Facility A
Loans in full on the Facility A Maturity Date and (ii) the Borrower will repay
the aggregate outstanding principal amount of the Facility B Loans in full on
the Facility B Maturity Date.
(b) In the event that, at any time, the aggregate principal amount of
Facility A Loans or Facility B Loans outstanding at such time shall exceed the
aggregate Facility A Commitments or Facility B Commitments, respectively, at
such time (after giving effect to any concurrent termination or reduction
thereof), the Borrower will immediately prepay the outstanding principal amount
of the applicable Class of Loans in the amount of such excess. Each prepayment
of the Loans under either Facility made pursuant to this subsection (b) shall be
applied ratably among the Lenders having Commitments under such Facility, in
proportion to the principal amount of such Loans held by each.
(c) At any time and from time to time, the Borrower shall have the right
to prepay the Loans, in whole or in part, without premium or penalty (except as
provided in clause (iii) below), upon written notice to the Administrative Agent
given not later than 11:00 a.m., Charlotte time, three (3) Business Days prior
to each intended prepayment of LIBOR Loans and
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one (1) Business Day prior to each intended prepayment of Base Rate Loans,
provided that (i) each partial prepayment shall be in an aggregate principal
--------
amount of not less than $1,000,000 or, if greater, an integral multiple of
$500,000 in excess thereof, (ii) no partial prepayment of LIBOR Loans made
pursuant to any single Borrowing shall reduce the aggregate outstanding
principal amount of the remaining LIBOR Loans under such Borrowing to less than
$3,000,000 or to any greater amount not an integral multiple of $1,000,000 in
excess thereof, and (iii) unless made together with all amounts required under
SECTION 2.16 to be paid as a consequence of such prepayment, a prepayment of a
LIBOR Loan may be made only on the last day of the Interest Period applicable
thereto. Each such notice shall specify the proposed date of such prepayment and
the aggregate principal amount, Classes and the Types of the Loans to be prepaid
(and, in the case of LIBOR Loans, the Interest Period of the Borrowing pursuant
to which made) and shall be irrevocable and shall bind the Borrower to make such
prepayment on the terms specified therein. Amounts prepaid pursuant to this
subsection (c) may be reborrowed, subject to the terms and conditions of this
Agreement. Each prepayment of the Loans under either Facility made pursuant to
this subsection (c) shall be applied ratably among the Lenders having
Commitments under such Facility, in proportion to the principal amount of such
Loans held by each.
(d) Each payment or prepayment of a LIBOR Loan made pursuant to the
provisions of this SECTION 2.5 on a day other than the last day of the Interest
Period applicable thereto shall be made together with all amounts required under
SECTION 2.16 to be paid as a consequence thereof.
I.6. Interest. (a) The Borrower will pay interest in respect of the
--------
unpaid principal amount of each Loan, from the date of Borrowing thereof until
such principal amount shall be paid in full, (i) at the Base Rate, as in effect
from time to time during such periods as such Loan is a Base Rate Loan, and (ii)
at the Adjusted LIBOR Rate applicable to the Class of such Loan, as in effect
from time to time during such periods as such Loan is a LIBOR Loan.
(b) Any principal amounts of the Loans not paid when due and, to the
greatest extent permitted by law, all interest accrued on the Loans and all
other fees and amounts hereunder not paid when due (whether at maturity,
pursuant to acceleration or otherwise), shall bear interest at a rate per annum
equal to the interest rate applicable from time to time thereafter to such Loans
(whether the Base Rate or the Adjusted LIBOR Rate) plus 2% (or, in the case of
fees and other amounts, at the Base Rate plus 2%), and, in each case, such
default interest shall be payable on demand. To the greatest extent permitted
by law, interest shall continue to accrue after the filing by or against the
Borrower of any petition seeking any relief in bankruptcy or under any law
pertaining to insolvency or debtor relief.
(c) Accrued (and theretofore unpaid) interest shall be payable as follows:
(i) in respect of each Base Rate Loan (including any Base Rate
Loan or portion thereof paid or prepaid pursuant to the provisions of
SECTION 2.5, except as provided hereinbelow), in arrears on the last
Business Day of each calendar quarter; provided, that in the event the
--------
Loans are repaid or prepaid in full and the Commitments have been
terminated, then accrued interest in respect of all Base Rate Loans shall
be payable together with such repayment or prepayment on the date
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thereof;
(ii) in respect of each LIBOR Loan (including any LIBOR Loan or
portion thereof paid or prepaid pursuant to the provisions of SECTION 2.5,
except as provided hereinbelow), in arrears on the last Business Day of the
Interest Period applicable thereto (subject to the provisions of clause
(iv) in SECTION 2.8); provided, that in the event all LIBOR Loans made
--------
pursuant to a single Borrowing are repaid or prepaid in full, then accrued
interest in respect of such LIBOR Loans shall be payable together with such
repayment or prepayment on the date thereof; and
(iii) in respect of any Loan, at maturity (whether pursuant to
acceleration or otherwise) and, after maturity, on demand.
(d) Nothing contained in this Agreement or in any other Credit Document
shall be deemed to establish or require the payment of interest to any Lender at
a rate in excess of the maximum rate permitted by applicable law. If the amount
of interest payable for the account of any Lender on any interest payment date
would exceed the maximum amount permitted by applicable law to be charged by
such Lender, the amount of interest payable for its account on such interest
payment date shall be automatically reduced to such maximum permissible amount.
In the event of any such reduction affecting any Lender, if from time to time
thereafter the amount of interest payable for the account of such Lender on any
interest payment date would be less than the maximum amount permitted by
applicable law to be charged by such Lender, then the amount of interest payable
for its account on such subsequent interest payment date shall be automatically
increased to such maximum permissible amount, provided that at no time shall the
--------
aggregate amount by which interest paid for the account of any Lender has been
increased pursuant to this sentence exceed the aggregate amount by which
interest paid for its account has theretofore been reduced pursuant to the
previous sentence.
(e) The Administrative Agent shall promptly notify the Borrower and the
Lenders upon determining the interest rate for each Borrowing of LIBOR Loans
after its receipt of the relevant Notice of Borrowing or Notice of
Conversion/Continuation; provided, however, that the failure of the
-------- -------
Administrative Agent to provide the Borrower or the Lenders with any such notice
shall neither affect any obligations of the Borrower or the Lenders hereunder
nor result in any liability on the part of the Administrative Agent to the
Borrower or any Lender. Each such determination (including each determination
of the Reserve Requirement) shall, absent manifest error, be conclusive and
binding on all parties hereto.
I.7. Fees. The Borrower agrees to pay:
----
(a) To the Administrative Agent, for the account of each Facility A
Lender, a facility fee for the period from the Original Credit Agreement Date to
the Facility A Termination Date, at a per annum rate equal to the applicable
Margin Percentage on the average daily Facility A Commitment of such Lender
(whether or not used), payable in arrears (i) on the last Business Day of each
calendar quarter, and (ii) on the Facility A Termination Date;
(b) To the Administrative Agent, for the account of each Facility B
Lender, a facility
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fee for the period from the date of this Agreement to the Facility B Termination
Date, at a per annum rate equal to the applicable Margin Percentage on the
average daily Facility B Commitment of such Lender (whether or not used),
payable in arrears (i) on the last Business Day of each calendar quarter, and
(ii) on the Facility B Termination Date; and
(c) To the Administrative Agent, for its own account, the annual
administrative fee described in the Fee Letter, on the terms, in the amount and
at the times set forth therein.
I.8. Interest Periods. Concurrently with the giving of a Notice of
----------------
Borrowing or Notice of Conversion/Continuation in respect of any Borrowing
comprised of LIBOR Loans, the Borrower shall have the right to elect, pursuant
to such notice, the interest period (each, an "Interest Period") to be
applicable to such LIBOR Loans, which Interest Period shall, at the option of
the Borrower, be a one, two or three-month period; provided, however, that:
-------- -------
(i) all LIBOR Loans comprising a single Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any LIBOR Loan shall
commence on the date of the Borrowing of such LIBOR Loan (including the
date of any continuation of, or conversion into, such LIBOR Loan), and each
successive Interest Period applicable to such LIBOR Loan shall commence on
the day on which the next preceding Interest Period applicable thereto
expires;
(iii) LIBOR Loans may not be outstanding under more than five (5)
separate Interest Periods at any one time (for which purpose Interest
Periods shall be deemed to be separate even if they are coterminous);
(iv) if any Interest Period otherwise would expire on a day that
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day unless such next succeeding Business Day falls in
another calendar month, in which case such Interest Period shall expire on
the next preceding Business Day;
(v) the Borrower may not select any Interest Period (y) with
respect to Facility A Loans that are to be maintained as LIBOR Loans, that
expires after the Facility A Maturity Date, or (z) with respect to Facility
B Loans that are to be maintained as LIBOR Loans, that begins prior to the
Amendment Effective Date or that expires after the Facility B Maturity
Date;
(vi) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month during which such
Interest Period would otherwise expire, such Interest Period shall expire
on the last Business Day of such calendar month; and
(vii) if, upon the expiration of any Interest Period applicable to
a Borrowing of LIBOR Loans, the Borrower shall have failed to elect a new
Interest Period to be applicable to such LIBOR Loans, then the Borrower
shall be deemed to have elected to convert such LIBOR Loans into Base Rate
Loans as of the expiration of the then current
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Interest Period applicable thereto.
I.9. Conversions and Continuations. (a) The Borrower shall have the
-----------------------------
right, on any Business Day occurring (a) with respect to Facility A Loans, on or
after the Amendment Effective Date, and (b) with respect to Facility B Loans, on
or after the third (3rd) Business Day after the Amendment Effective Date, to
elect (i) to convert all or a portion of the outstanding principal amount of any
Base Rate Loans of either Class into LIBOR Loans of the same Class, or to
convert any LIBOR Loans of either Class the Interest Periods for which end on
the same day into Base Rate Loans of the same Class, or (ii) to continue all or
a portion of the outstanding principal amount of any LIBOR Loans of either Class
the Interest Periods for which end on the same day for an additional Interest
Period, provided that (x) any such conversion of LIBOR Loans into Base Rate
--------
Loans shall involve an aggregate principal amount of not less than $1,000,000
or, if greater, an integral multiple of $500,000 in excess thereof; any such
conversion of Base Rate Loans into, or continuation of, LIBOR Loans shall
involve an aggregate principal amount of not less than $3,000,000 or, if
greater, an integral multiple of $1,000,000 in excess thereof; and no partial
conversion of LIBOR Loans made pursuant to a single Borrowing shall reduce the
outstanding principal amount of such LIBOR Loans to less than $3,000,000 or to
any greater amount not an integral multiple of $1,000,000 in excess thereof, (y)
except as otherwise provided in SECTION 2.14(D), LIBOR Loans may be converted
into Base Rate Loans only on the last day of the Interest Period applicable
thereto (and, in any event, if a LIBOR Loan is converted into a Base Rate Loan
on any day other than the last day of the Interest Period applicable thereto,
the Borrower will pay, upon such conversion, all amounts required under SECTION
2.16 to be paid as a consequence thereof) and (z) no conversion of Base Rate
Loans into LIBOR Loans or continuation of LIBOR Loans shall be permitted during
the continuance of a Default or Event of Default.
(b) The Borrower shall make each such election by giving the
Administrative Agent written notice not later than 11:00 a.m., Charlotte time,
three (3) Business Days prior to the intended effective date of any conversion
of Base Rate Loans into, or continuation of, LIBOR Loans and one (1) Business
Day prior to the intended effective date of any conversion of LIBOR Loans into
Base Rate Loans. Each such notice (each, a "Notice of Conversion/Continuation")
shall be irrevocable, shall be given in the form of EXHIBIT B-2 and shall
specify (x) the date of such conversion or continuation (which shall be a
Business Day), (y) in the case of a conversion into, or a continuation of, LIBOR
Loans, the Interest Period to be applicable thereto, and (z) the aggregate
amount, Class and Type of the Loans being converted or continued. Upon the
receipt of a Notice of Conversion/Continuation, the Administrative Agent will
promptly notify each Lender having a Commitment under the relevant Facility (or
outstanding Loans under such Facility, in the event the relevant Commitments
have been terminated) of the proposed conversion or continuation. In the event
that the Borrower shall fail to deliver a Notice of Conversion/Continuation as
provided herein with respect to any outstanding LIBOR Loans, such LIBOR Loans
shall automatically be converted to Base Rate Loans upon the expiration of the
then current Interest Period applicable thereto (unless repaid pursuant to the
terms hereof).
I.10. Method of Payments; Computations. (a) All payments by the Borrower
--------------------------------
hereunder shall be made without setoff, counterclaim or other defense, in
Dollars and in immediately available funds to the Administrative Agent, for the
account of the Lenders
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entitled to such payment (except as otherwise expressly provided herein as to
payments required to be made directly to the Lenders) at its office referred to
in SECTION 10.5, prior to 12:00 noon, Charlotte time, on the date payment is
due. Any payment made as required hereinabove, but after 12:00 noon, Charlotte
time, shall be deemed to have been made on the next succeeding Business Day. If
any payment falls due on a day that is not a Business Day, then such due date
shall be extended to the next succeeding Business Day (except that in the case
of LIBOR Loans to which the proviso of clause (iv) in SECTION 2.8 is applicable,
such due date shall be the next preceding Business Day), and such extension of
time shall then be included in the computation of payment of interest, fees or
other applicable amounts.
(b) The Administrative Agent will distribute to the Lenders like amounts
relating to payments made to the Administrative Agent for the account of the
Lenders as follows: (i) if the payment is received by 12:00 noon, Charlotte
time, in immediately available funds, the Administrative Agent will make
available to each relevant Lender on the same date, by wire transfer of
immediately available funds, such Lender's ratable share of such payment (based
on the percentage that the amount of the relevant payment owing to such Lender
bears to the total amount of such payment owing to all of the relevant Lenders),
and (ii) if such payment is received after 12:00 noon, Charlotte time, or in
other than immediately available funds, the Administrative Agent will make
available to each such Lender its ratable share of such payment by wire transfer
of immediately available funds on the next succeeding Business Day (or in the
case of uncollected funds, as soon as practicable after collected). If the
Administrative Agent shall not have made a required distribution to the
appropriate Lenders as required hereinabove after receiving a payment for the
account of such Lenders, the Administrative Agent will pay to each such Lender,
on demand, its ratable share of such payment with interest thereon at the
Federal Funds Rate for each day from the date such amount was required to be
disbursed by the Administrative Agent until the date repaid to such Lender.
(c) Unless the Administrative Agent shall have received written notice
from the Borrower prior to the date on which any payment is due to any Lender
hereunder that such payment will not be made in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date, and the Administrative Agent may, in reliance on such
assumption, but shall not be obligated to, cause to be distributed to such
Lender on such due date an amount equal to the amount then due to such Lender.
If and to the extent the Borrower shall not have so made such payment in full to
the Administrative Agent, and without limiting the obligation of the Borrower to
make such payment in accordance with the terms hereof, such Lender shall repay
to the Administrative Agent forthwith on demand such amount so distributed to
such Lender, together with interest thereon for each day from the date such
amount is so distributed to such Lender until the date repaid to the
Administrative Agent, at the Federal Funds Rate.
(d) Each Lender for whose account any payment is to be made hereunder may,
but shall not be obligated to, debit the amount of any such payment not made as
and when required hereunder to any ordinary deposit account of the Borrower with
such Lender (with prompt notice to the Administrative Agent and the Borrower);
provided, however, that the failure to give such notice shall not affect the
-------- -------
validity of such debit by such Lender.
(e) With respect to each payment hereunder, except as specifically
provided
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otherwise herein or in any of the other Credit Documents, the Borrower
may designate by written notice to the Administrative Agent prior to or
concurrently with such payment the specific Loans or other Obligations that are
to be paid, repaid or prepaid, provided that (i) unless made together with all
--------
amounts required under SECTION 2.16 to be paid as a consequence thereof, a
prepayment of a LIBOR Loan may be made only on the last day of the Interest
Period applicable thereto, and (ii) each payment on account of any Obligations
to or for the account of any one or more Lenders shall be apportioned ratably
among such Lenders in proportion to the amounts of such Obligations owed to them
respectively. In the absence of any such designation by the Borrower, or if an
Event of Default has occurred and is continuing, the Administrative Agent shall
make such designation in its sole discretion or as the Required Lenders may
direct, subject to the foregoing and to the other provisions of this Agreement.
(f) All computations of interest and fees hereunder (including
computations of the Reserve Requirement) shall be made on the basis of a year
consisting of 360 days and the actual number of days (including the first day,
but excluding the last day) elapsed.
I.11. Recovery of Payments. (a) The Borrower agrees that to the extent
--------------------
the Borrower makes a payment or payments to or for the account of the
Administrative Agent or any Lender, which payment or payments or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party
under any bankruptcy, insolvency or similar state or federal law, common law or
equitable cause, then, to the extent of such payment or repayment, the
Obligation intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been received.
(b) If any amounts distributed by the Administrative Agent to any Lender
are subsequently returned or repaid by the Administrative Agent to the Borrower
or its representative or successor in interest, whether by court order or by
settlement approved by the Lender in question, such Lender will, promptly upon
receipt of notice thereof from the Administrative Agent, pay the Administrative
Agent such amount. If any such amounts are recovered by the Administrative
Agent from the Borrower or its representative or successor in interest, the
Administrative Agent will redistribute such amounts to the Lenders on the same
basis as such amounts were originally distributed.
I.12. Use of Proceeds._. The proceeds of the Loans (as defined in the
---------------
Original Credit Agreement) made pursuant to the Original Credit Agreement were
used to repay the Terminating Senior Indebtedness (as defined in the Original
Credit Agreement) in full, to pay or reimburse reasonable transaction fees and
expenses in connection with the consummation of the transactions contemplated by
the Original Credit Agreement, and for working capital and general corporate
purposes. The proceeds of the Loans made on or after the Amendment Effective
Date will be used to pay or reimburse reasonable transaction fees and expenses
(if necessary) in connection with the consummation of the transactions
contemplated hereby and for working capital and general corporate purposes
(including to bridge receivables from insurers and to provide bridge financing
for acquisitions).
I.13. Pro Rata Treatment; Sharing of Payments. (a) All fundings,
---------------------------------------
continuations and conversions of Loans of either Class shall be made by the
Lenders pro rata on the basis of their
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respective Commitments to provide Loans of such Class (in the case of the
initial funding of Loans of such Class pursuant to SECTION 2.2) or on the basis
of their respective outstanding Loans of such Class (in the case of
continuations and conversions of outstanding Loans of such Class pursuant to
SECTION 2.9 and in the event the Commitments to provide Loans of such Class have
expired or have been terminated), as applicable from time to time. All payments
on account of principal of or interest on any Loans, fees or any other
Obligations owing to or for the account of any one or more Lenders shall be
apportioned ratably among such Lenders in proportion to the amounts of such
principal, interest, fees or other Obligations owed to them respectively.
(b) Each Lender agrees that if it shall receive any amount hereunder
(whether by voluntary payment, realization upon security, exercise of the right
of setoff or banker's lien, counterclaim or cross action, or otherwise, other
than pursuant to SECTION 10.7) applicable to the payment of any of the
Obligations that exceeds its ratable share (according to the proportion of (i)
the amount of such Obligations due and payable to such Lender at such time to
(ii) the aggregate amount of such Obligations due and payable to all Lenders at
such time) of payments on account of such Obligations then or therewith obtained
by all the Lenders to which such payments are required to have been made, such
Lender shall forthwith purchase from the other Lenders such participations in
such Obligations as shall be necessary to cause such purchasing Lender to share
the excess payment or other recovery ratably with each of them; provided,
--------
however, that if all or any portion of such excess payment is thereafter
-------
recovered from such purchasing Lender, such purchase from each such other Lender
shall be rescinded and each such other Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery, together with an
amount equal to such other Lender's ratable share (according to the proportion
of (i) the amount of such other Lender's required repayment to (ii) the total
amount so recovered from the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount so
recovered. The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to the provisions of this subsection may, to the
fullest extent permitted by law, exercise any and all rights of payment
(including, without limitation, setoff, banker's lien or counterclaim) with
respect to such participation as fully as if such participant were a direct
creditor of the Borrower in the amount of such participation. If under any
applicable bankruptcy, insolvency or similar law, any Lender receives a secured
claim in lieu of a setoff to which this subsection applies, such Lender shall,
to the extent practicable, exercise its rights in respect of such secured claim
in a manner consistent with the rights of the Lenders entitled under this
subsection to share in the benefits of any recovery on such secured claim.
I.14. Increased Costs; Change in Circumstances; Illegality; etc. (a) If,
---------------------------------------------------------
at any time after the date hereof and from time to time, the introduction of or
any change in any applicable law, rule or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender with any
guideline or request from any such Governmental Authority (whether or not having
the force of law), shall (i) subject such Lender to any tax or other charge, or
change the basis of taxation of payments to such Lender, in respect of any of
its LIBOR Loans or any other amounts payable hereunder or its obligation to
make, fund or maintain any LIBOR Loans (other than any change in the rate or
basis of tax on the overall net income of such Lender or its applicable Lending
Office), (ii) impose, modify or deem applicable any reserve, special deposit
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or similar requirement (other than as a result of any change in the Reserve
Requirement) against assets of, deposits with or for the account of, or credit
extended by, such Lender or its applicable Lending Office, or (iii) impose on
such Lender or its applicable Lending Office any other condition affecting its
LIBOR Loans, and the result of any of the foregoing shall be to increase the
cost to such Lender of making or maintaining any LIBOR Loans or to reduce the
amount of any sum received or receivable by such Lender hereunder, the Borrower
will, promptly upon demand therefor by such Lender, pay to such Lender such
additional amounts as shall compensate such Lender for such increase in costs or
reduction in return.
(b) If, at any time after the date hereof and from time to time, any
Lender shall have reasonably determined that the introduction of or any change
in any applicable law, rule or regulation regarding capital adequacy or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof, or compliance by such Lender
with any guideline or request from any such Governmental Authority (whether or
not having the force of law), has or would have the effect, as a consequence of
such Lender's Commitments or Loans hereunder, of reducing the rate of return on
the capital of such Lender or any Person controlling such Lender to a level
below that which such Lender or controlling Person could have achieved but for
such introduction, change or compliance (taking into account such Lender's or
controlling Person's policies with respect to capital adequacy), the Borrower
will, promptly upon demand therefor by such Lender therefor, pay to such Lender
such additional amounts as will compensate such Lender or controlling Person for
such reduction in return.
(c) If, on or prior to the first day of any Interest Period, (y) the
Administrative Agent shall have determined that adequate and reasonable means do
not exist for ascertaining the applicable LIBOR Rate for such Interest Period or
(z) the Administrative Agent shall have received written notice from the
Required Lenders of their determination that the rate of interest referred to in
the definition of "LIBOR Rate" upon the basis of which the Adjusted LIBOR Rate
for LIBOR Loans for such Interest Period is to be determined will not adequately
and fairly reflect the cost to such Lenders of making or maintaining LIBOR Loans
during such Interest Period, the Administrative Agent will forthwith so notify
the Borrower and the Lenders. Upon such notice, (i) all then outstanding LIBOR
Loans shall automatically, on the expiration date of the respective Interest
Periods applicable thereto (unless then repaid in full), be converted into Base
Rate Loans, (ii) the obligation of the Lenders to make, to convert Base Rate
Loans into, or to continue, LIBOR Loans shall be suspended (including pursuant
to the Borrowing to which such Interest Period applies), and (iii) any Notice of
Borrowing or Notice of Conversion/Continuation given at any time thereafter with
respect to LIBOR Loans shall be deemed to be a request for Base Rate Loans, in
each case until the Administrative Agent or the Required Lenders, as the case
may be, shall have determined that the circumstances giving rise to such
suspension no longer exist (and the Required Lenders, if making such
determination, shall have so notified the Administrative Agent), and the
Administrative Agent shall have so notified the Borrower and the Lenders.
(d) Notwithstanding any other provision in this Agreement, if, at any time
after the date hereof and from time to time, any Lender shall have determined in
good faith that the introduction of or any change in any applicable law, rule or
regulation or in the interpretation or
-28-
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance with any guideline or
request from any such Governmental Authority (whether or not having the force of
law), has or would have the effect of making it unlawful for such Lender to make
or to continue to make or maintain LIBOR Loans, such Lender will forthwith so
notify the Administrative Agent and the Borrower. Upon such notice, (i) each of
such Lender's then outstanding LIBOR Loans shall automatically, on the
expiration date of the respective Interest Period applicable thereto (or, to the
extent any such LIBOR Loan may not lawfully be maintained as a LIBOR Loan until
such expiration date, upon such notice), be converted into a Base Rate Loan,
(ii) the obligation of such Lender to make, to convert Base Rate Loans into, or
to continue, LIBOR Loans shall be suspended (including pursuant to any Borrowing
for which the Administrative Agent has received a Notice of Borrowing but for
which the Borrowing Date has not arrived), and (iii) any Notice of Borrowing or
Notice of Conversion/Continuation given at any time thereafter with respect to
LIBOR Loans shall, as to such Lender, be deemed to be a request for a Base Rate
Loan, in each case until such Lender shall have determined that the
circumstances giving rise to such suspension no longer exist and shall have so
notified the Administrative Agent, and the Administrative Agent shall have so
notified the Borrower.
(e) Determinations by the Administrative Agent or any Lender for purposes
of this SECTION 2.14 of any increased costs, reduction in return, market
contingencies, illegality or any other matter shall, absent manifest error, be
conclusive, provided that such determinations are made in good faith. No
--------
failure by the Administrative Agent or any Lender at any time to demand payment
of any amounts payable under this SECTION 2.14 shall constitute a waiver of its
right to demand payment of any additional amounts arising at any subsequent
time. Nothing in this SECTION 2.14 shall require or be construed to require the
Borrower to pay any interest, fees, costs or other amounts in excess of that
permitted by applicable law.
I.15. Taxes. (a) Any and all payments by the Borrower hereunder or under
-----
any Note shall be made, in accordance with the terms hereof and thereof, free
and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, other than net income and franchise taxes imposed on the
Administrative Agent or any Lender by the United States or by the jurisdiction
under the laws of which the Administrative Agent or such Lender, as the case may
be, is organized or in which its principal office or (in the case of a Lender)
its applicable Lending Office is located, or any political subdivision or taxing
authority thereof (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note to the Administrative Agent or
any Lender, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this SECTION 2.15), the Administrative Agent or
such Lender, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower will make such
deductions, (iii) the Borrower will pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law and (iv)
the Borrower will deliver to the Administrative Agent or such Lender, as the
case may be, evidence of such payment.
(b) The Borrower will indemnify the Administrative Agent and each Lender
for
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the full amount of Taxes (including, without limitation, any Taxes imposed
by any jurisdiction on amounts payable under this SECTION 2.15) paid by the
Administrative Agent or such Lender, as the case may be, and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date the Administrative
Agent or such Lender, as the case may be, makes written demand therefor.
(c) Each of the Administrative Agent and the Lenders agrees that if it
subsequently recovers, or receives a permanent net tax benefit with respect to,
any amount of Taxes (i) previously paid by it and as to which it has been
indemnified by or on behalf of the Borrower or (ii) previously deducted by the
Borrower (including, without limitation, any Taxes deducted from any additional
sums payable under clause (i) of subsection (a) above), the Administrative Agent
or such Lender, as the case may be, shall reimburse the Borrower to the extent
of the amount of any such recovery or permanent net tax benefit (but only to the
extent of indemnity payments made, or additional amounts paid, by or on behalf
of the Borrower under this SECTION 2.15 with respect to the Taxes giving rise to
such recovery or tax benefit); provided, however, that the Borrower, upon the
-------- -------
request of the Administrative Agent or such Lender, agrees to repay to the
Administrative Agent or such Lender, as the case may be, the amount paid over to
the Borrower (together with any penalties, interest or other charges), in the
event the Administrative Agent or such Lender is required to repay such amount
to the relevant taxing authority or other Governmental Authority. The
determination by the Administrative Agent or any Lender of the amount of any
such recovery or permanent net tax benefit shall, in the absence of manifest
error, be conclusive and binding.
(d) If any Lender is a "foreign corporation, partnership or trust" within
the meaning of the Internal Revenue Code, and such Lender claims exemption from
United States withholding tax under Section 1441 or 1442 of the Internal Revenue
Code, such Lender will deliver to each of the Administrative Agent and the
Borrower, on or prior to the date of any payment by the Borrower to such Lender
under this Agreement or the Notes, a properly completed Internal Revenue Service
Form 4224 or 1001, as applicable (or successor forms), certifying that such
Lender is entitled to an exemption from or a reduction of withholding or
deduction for or on account of United States federal income taxes in connection
with payments under this Agreement or any of the Notes, together with a properly
completed Internal Revenue Service Form W-8 or W-9, as applicable (or successor
forms). Each such Lender further agrees to deliver to each of the
Administrative Agent and the Borrower an additional copy of each such relevant
form on or before the date that such form expires (currently, three successive
calendar years for Form 1001 and one calendar year for Form 4224) or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent forms so delivered by it, in each case certifying that such Lender is
entitled to an exemption from or a reduction of withholding or deduction for or
on account of United States federal income taxes in connection with payments
under this Agreement or any of the Notes, unless an event (including, without
limitation, any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required, which event renders
all such forms inapplicable or the exemption to which such forms relate
unavailable and such Lender notifies the Administrative Agent and the Borrower
that it is not entitled to receive payments without deduction or withholding of
United States federal income taxes. Each such Lender will promptly notify the
Administrative Agent and the Borrower of any changes in circumstances
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that would modify or render invalid any claimed exemption or reduction.
(e) If any Lender is entitled to a reduction in (and not a complete
exemption from) the applicable withholding tax, the Borrower and the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable withholding tax after taking into account
such reduction. If any of the forms or other documentation required under
subsection (d) above are not delivered to the Administrative Agent as therein
required, then the Borrower and the Administrative Agent may withhold from any
interest payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.
I.16. Compensation. The Borrower will compensate each Lender upon demand
------------
for all losses, expenses and liabilities (including, without limitation, any
loss, expense or liability incurred by reason of the liquidation or reemployment
of deposits or other funds required by such Lender to fund or maintain LIBOR
Loans) that such Lender may incur or sustain (i) if for any reason (other than a
default by such Lender) a borrowing or continuation of, or conversion into, a
LIBOR Loan does not occur on a date specified therefor in a Notice of Borrowing
or Notice of Conversion/Continuation, (ii) if any repayment, prepayment or
conversion of any LIBOR Loan occurs on a date other than the last day of an
Interest Period applicable thereto (including as a consequence of acceleration
of the maturity of the Loans pursuant to SECTION 8.2), (iii) if any prepayment
of any LIBOR Loan is not made on any date specified in a notice of prepayment
given by the Borrower or (iv) as a consequence of any other failure by the
Borrower to make any payments with respect to any LIBOR Loan when due hereunder.
Calculation of all amounts payable to a Lender under this SECTION 2.16 shall be
made as though such Lender had actually funded its relevant LIBOR Loan through
the purchase of a Eurodollar deposit bearing interest at the LIBOR Rate in an
amount equal to the amount of such LIBOR Loan, having a maturity comparable to
the relevant Interest Period; provided, however, that each Lender may fund its
-------- -------
LIBOR Loans in any manner it sees fit and the foregoing assumption shall be
utilized only for the calculation of amounts payable under this SECTION 2.16.
Determinations by any Lender for purposes of this SECTION 2.16 of any such
losses, expenses or liabilities shall, absent manifest error, be conclusive,
provided that such determinations are made in good faith.
--------
ARTICLE II
CONDITIONS OF BORROWING
II.1. Conditions of Loans under Original Credit Agreement. The obligation
---------------------------------------------------
of each Lender to make Loans in connection with the initial Borrowing under the
Original Credit Agreement was subject to the satisfaction of the conditions
precedent set forth in Sections 3.1 and 3.2 of the Original Credit Agreement,
which conditions have heretofore been satisfied (other than the term Original
Credit Agreement, which shall have the meaning given to it in this Agreement,
capitalized terms used in this SECTION 3.1 without definition shall, solely for
purposes of this SECTION 3.1, have the meanings given to them in the Original
Credit Agreement).
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II.2. Conditions to Effectiveness of this Agreement. The effectiveness of
---------------------------------------------
this Agreement and the amendment and restatement of the Original Credit
Agreement effected hereby is subject to the satisfaction of the condition set
forth in the last sentence of SECTION 10.14 and the following conditions
precedent:
(a) The Administrative Agent shall have received the following, each dated
the Amendment Effective Date (unless otherwise specified) and, except for the
Notes, in sufficient copies for each Lender:
(i) a Facility A Note for each Facility A Lender that is a party
hereto as of the Amendment Effective Date, in the amount of such Lender's
Facility A Commitment and duly completed and executed by the Borrower;
(ii) a Facility B Note for each Facility B Lender that is a party
hereto as of the Amendment Effective Date, in the amount of such Lender's
Facility B Commitment and duly completed and executed by the Borrower;
(iii) a certificate, signed by the chief executive officer, vice
president - finance or treasurer of the Borrower, in form and substance
satisfactory to the Administrative Agent, certifying that (A) all
representations and warranties of the Borrower contained in this Agreement
and the other Credit Documents are true and correct as of the Amendment
Effective Date, both immediately before and after giving effect to the
consummation of the transactions contemplated by this Agreement, the making
of any Loans hereunder on the Amendment Effective Date and the application
of the proceeds thereof, (B) no Default or Event of Default has occurred
and is continuing, both immediately before and after giving effect to the
consummation of the transactions contemplated by this Agreement, the making
of any Loans hereunder on the Amendment Effective Date and the application
of the proceeds thereof, (C) there are no insurance regulatory proceedings
pending or, to such individual's knowledge, threatened against any of the
Insurance Subsidiaries in any jurisdiction that, if adversely determined,
would be reasonably likely to have a Material Adverse Effect, and (D) both
immediately before and after giving effect to the consummation of the
transactions contemplated by this Agreement, no Material Adverse Change has
occurred since December 31, 1995, and there exists no event, condition or
state of facts that could reasonably be expected to result in a Material
Adverse Change;
(iv) a certificate of the secretary or an assistant secretary of
the Borrower, in form and substance satisfactory to the Administrative
Agent, certifying (A) that the certificate of incorporation of the Borrower
has not been amended since the Original Closing Date (or, if such
certificate has been amended since the Original Closing Date, a statement
to the effect that attached thereto is a true and complete copy of such
certificate, certified as of a recent date by the Secretary of State of
Delaware, and that the same has not been amended since the date of such
certification, and attaching such copy), (B) that the bylaws of the
Borrower have not been amended since the Original Closing Date (or, if such
bylaws have been amended since the Original Closing Date, a statement to
the effect that attached thereto is a true and complete copy of such
bylaws, as then in effect and as in effect at all times from the date on
which the resolutions
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referred to in clause (C) below were adopted to and including the date of
such certificate, and attaching such copy), and (C) that attached thereto
is a true and complete copy of resolutions adopted by the board of
directors of the Borrower authorizing the execution, delivery and
performance of this Agreement and the other Credit Documents to which it is
a party, and attaching such copy; and
(v) a favorable opinion of Xxxxxx X. Xxxxxxxx, general counsel
to the Borrower, addressed to the Administrative Agent and the Lenders, in
substantially the form of EXHIBIT E and addressing such other matters as
the Administrative Agent or any Lender may reasonably request.
(b) The Administrative Agent shall have received (i) a certificate as of a
recent date of the good standing of the Borrower under the laws of the State of
Delaware, from the Secretary of State of Delaware, (ii) a certificate as of a
recent date of the qualification of the Borrower to conduct business as a
foreign corporation, from the Secretary of State of Alabama, and (iii) a
certificate as of a recent date of the good standing of the Borrower, from the
Department of Revenue of the State of Alabama.
(c) All legal matters, documentation and corporate or other proceedings
incident to the transactions contemplated hereby shall be reasonably acceptable
to the Administrative Agent; all approvals, permits and consents of any
Governmental Authorities (including, without limitation, all relevant Insurance
Regulatory Authorities) or other Persons required in connection with the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby shall have been obtained (without the
imposition of conditions that are not reasonably acceptable to the
Administrative Agent), and all related filings, if any, shall have been made,
and all such approvals, permits, consents and filings shall be in full force and
effect and the Administrative Agent shall have received such copies thereof as
it shall have requested; all applicable waiting periods shall have expired
without any adverse action being taken by any Governmental Authority having
jurisdiction; and no action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before, and no
order, injunction or decree shall have been entered by, any court or other
Governmental Authority, in each case to enjoin, restrain or prohibit, to obtain
substantial damages in respect of, or that is otherwise related to or arises out
of, this Agreement or the consummation of the transactions contemplated hereby,
or that, in the opinion of the Administrative Agent, would otherwise be
reasonably likely to have a Material Adverse Effect.
(d) Since December 31, 1995, both immediately before and after giving
effect to the consummation of the transactions contemplated by this Agreement,
there shall not have occurred any Material Adverse Change or any event,
condition or state of facts that could reasonably be expected to result in a
Material Adverse Change.
(e) The Borrower shall have paid all fees and expenses of the
Administrative Agent and the Lenders required hereunder or under any other
Credit Document to be paid on or prior to the Amendment Effective Date
(including fees and expenses of counsel) in connection with this Agreement and
the transactions contemplated hereby.
(f) Each of the representations and warranties contained in ARTICLE IV and
in the
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other Credit Documents shall be true and correct on and as of the Amendment
Effective Date with the same effect as if made on and as of such date (except to
the extent any such representation or warranty is expressly stated to have been
made as of a specific date, in which case such representation or warranty shall
be true and correct as of such date).
(g) No Default or Event of Default shall have occurred and be continuing.
(h) There shall not have occurred and be continuing any event or condition
in the United States financial and capital markets that could reasonably be
expected to have a material adverse effect on the primary syndication of the
revolving credit facility provided for hereunder.
(i) The Administrative Agent and each Lender shall have received such
other documents, certificates, opinions and instruments as it shall have
reasonably requested.
II.3. Conditions to All Loans. The obligation of each Lender to make any
-----------------------
Loans hereunder is subject to the satisfaction of the following conditions
precedent on the relevant Borrowing Date:
(a) The Administrative Agent shall have received a Notice of Borrowing in
accordance with SECTION 2.2(B);
(b) Each of the representations and warranties contained in ARTICLE IV and
in the other Credit Documents shall be true and correct on and as of the
relevant Borrowing Date with the same effect as if made on and as of such date,
both immediately before and after giving effect to the Loans to be made on such
date (except to the extent any such representation or warranty is expressly
stated to have been made as of a specific date, in which case such
representation or warranty shall be true and correct as of such date); and
(c) No Default or Event of Default shall have occurred and be continuing
on such date, both immediately before and after giving effect to the Loans to be
made on such date.
Each giving of a Notice of Borrowing, and the consummation of each
Borrowing, shall be deemed to constitute a representation by the Borrower that
the statements contained in subsections (b) and (c) above are true, both as of
the date of such notice or request and as of the relevant Borrowing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to induce the Lenders to extend the credit contemplated hereby,
the Borrower represents and warrants to the Administrative Agent and the Lenders
as follows:
III.1. Corporate Organization and Power. Each of the Borrower and its
--------------------------------
Subsidiaries
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(i) is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, (ii) has the full corporate
power and authority to execute, deliver and perform the Credit Documents to
which it is or will be a party, to own and hold its property and to engage in
its business as presently conducted, and (iii) is duly qualified to do business
as a foreign corporation and is in good standing in each jurisdiction where the
nature of its business or the ownership of its properties requires it to be so
qualified.
III.2. Authorization; Enforceability. The Borrower has taken all
-----------------------------
necessary corporate action to execute, deliver and perform each of the Credit
Documents to which it is or will be a party, and has, or on the Amendment
Effective Date (or any later date of execution and delivery) will have, validly
executed and delivered each of the Credit Documents to which it is or will be a
party. This Agreement constitutes, and each of the other Credit Documents upon
execution and delivery by the Borrower will constitute, the legal, valid and
binding obligation of the Borrower, enforceable against it in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally or by general equitable principles.
III.3. No Violation. The execution, delivery and performance by the
------------
Borrower of this Agreement and each of the other Credit Documents, and
compliance by it with the terms hereof and thereof, do not and will not (i)
violate any provision of its certificate of incorporation or bylaws or
contravene any other Requirement of Law applicable to it, (ii) conflict with,
result in a breach of or constitute (with notice, lapse of time or both) a
default under any material indenture, agreement or other instrument to which it
is a party, by which it or any of its properties is bound or to which it is
subject, or (iii) result in or require the creation or imposition of any Lien
upon any of its properties or assets. No Subsidiary is subject to any
restriction or encumbrance on its ability to make dividend payments or other
distributions in respect of its capital stock, to make loans or advances to the
Borrower or any other Subsidiary, or to transfer any of its assets or properties
to the Borrower or any other Subsidiary, in each case other than such
restrictions or encumbrances existing under or by reason of the Credit Documents
or applicable Requirements of Law.
III.4. Governmental Authorization; Permits. (a) No consent, approval,
-----------------------------------
authorization or other action by, notice to, or registration or filing with, any
Governmental Authority or other Person is or will be required as a condition to
or otherwise in connection with the due execution, delivery and performance by
the Borrower of this Agreement or any of the other Credit Documents or the
legality, validity or enforceability hereof or thereof.
(b) Each of the Borrower and its Subsidiaries has, and is in good standing
with respect to, all governmental approvals, licenses, permits and
authorizations necessary to conduct its business as presently conducted and to
own or lease and operate its properties, except for those the failure to obtain
which would not be reasonably likely, individually or in the aggregate, to have
a Material Adverse Effect.
(c) SCHEDULE 4.4 lists with respect to each Insurance Subsidiary, as of
the Amendment Effective Date, all of the jurisdictions in which such Insurance
Subsidiary holds licenses (including, without limitation, licenses or
certificates of authority from relevant Insurance Regulatory Authorities),
permits or authorizations to transact insurance and
-35-
reinsurance business (collectively, the "Licenses"), indicates the line or lines
of insurance in which each such Insurance Subsidiary is permitted to be engaged
with respect to each License therein listed, and attaches copies of all Licenses
in the States of Alabama, Hawaii and Texas. To the knowledge of the Borrower,
except as set forth on SCHEDULE 4.4, (i) no such License is the subject of a
proceeding for suspension, revocation or limitation or any similar proceedings,
(ii) there is no sustainable basis for such a suspension, revocation or
limitation, and (iii) no such suspension, revocation or limitation is threatened
by any relevant Insurance Regulatory Authority, that, in each instance under
(i), (ii) and (iii) above, would be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect. No Insurance Subsidiary transacts
any insurance business, directly or indirectly, in any jurisdiction other than
those listed on SCHEDULE 4.4, where such business requires any license, permit
or other authorization of an Insurance Regulatory Authority of such
jurisdiction.
III.5. Litigation. There are no actions, investigations, suits or
----------
proceedings pending or, to the knowledge of the Borrower, threatened, at law, in
equity or in arbitration, before any court, other Governmental Authority or
other Person, (i) against or affecting the Borrower, any of its Subsidiaries or
any of their respective properties that would, if adversely determined, be
reasonably likely to have a Material Adverse Effect, or (ii) with respect to
this Agreement or any of the other Credit Documents.
III.6. Taxes. Each of the Borrower and its Subsidiaries has timely filed
-----
all federal, state and local tax returns and reports required to be filed by it
and has paid all taxes, assessments, fees and other charges levied upon it or
upon its properties that are shown thereon as due and payable, other than those
that are being contested in good faith and by proper proceedings and for which
adequate reserves have been established in accordance with Generally Accepted
Accounting Principles. Such returns accurately reflect in all material respects
all liability for taxes of the Borrower and its Subsidiaries for the periods
covered thereby. There is no ongoing audit or examination or, to the knowledge
of the Borrower, other investigation by any Governmental Authority of the tax
liability of the Borrower or any of its Subsidiaries, and there is no unresolved
claim by any Governmental Authority concerning the tax liability of the Borrower
or any of its Subsidiaries for any period for which tax returns have been or
were required to have been filed, other than claims for which adequate reserves
have been established in accordance with Generally Accepted Accounting
Principles. Neither the Borrower nor any of its Subsidiaries has waived or
extended or has been requested to waive or extend the statute of limitations
relating to the payment of any taxes.
III.7. Subsidiaries. SCHEDULE 4.7 sets forth a list, as of the Amendment
------------
Effective Date, of all of the Subsidiaries of the Borrower and, as to each such
Subsidiary, the percentage ownership (direct and indirect) of the Borrower in
each class of its capital stock and each direct owner thereof. All of the
issued and outstanding shares of capital stock of VFIC are directly owned and
held by the Borrower.
III.8. Full Disclosure. All factual information heretofore or
---------------
contemporaneously furnished to the Administrative Agent or any Lender in writing
by or on behalf of the Borrower or any of its Subsidiaries for purposes of or in
connection with this Agreement and the transactions contemplated hereby is, and
all other such factual information hereafter furnished to the Administrative
Agent or any Lender in writing by or on behalf of the
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Borrower or any of its Subsidiaries will be, true and accurate in all material
respects on the date as of which such information is dated or certified (or, if
such information has been amended or supplemented, on the date as of which any
such amendment or supplement is dated or certified) and not made incomplete by
omitting to state a material fact necessary to make the statements contained
therein, in light of the circumstances under which such information was
provided, not misleading.
III.9. Margin Regulations. Neither the Borrower nor any of its
------------------
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
Margin Stock. No proceeds of the Loans will be used, directly or indirectly, to
purchase or carry any Margin Stock (except for purchases by the Borrower of
outstanding shares of its capital stock made in compliance with the applicable
provisions of Regulations G, T, U and X), to extend credit for such purpose or
for any other purpose that would violate or be inconsistent with Regulations G,
T, U or X or any provision of the Exchange Act.
III.10. No Material Adverse Change. There has been no Material Adverse
--------------------------
Change since December 31, 1995, and there exists no event, condition or state of
facts that could reasonably be expected to result in a Material Adverse Change.
III.11. Financial Matters. (a) The Borrower has heretofore furnished to
-----------------
the Administrative Agent copies of (i) the audited consolidated balance sheets
of the Borrower and its Subsidiaries as of December 31, 1995, 1994, and 1993,
and the related statements of income, stockholders' equity and cash flows for
the fiscal years then ended, together with the opinion of KPMG Peat Marwick
thereon, and (ii) the unaudited consolidated balance sheet of the Borrower and
its Subsidiaries as of September 30, 1996, and the related statements of income,
stockholders' equity and cash flows for the nine-month period then ended. Such
financial statements have been prepared in accordance with Generally Accepted
Accounting Principles (subject, with respect to the unaudited financial
statements, to the absence of notes required by Generally Accepted Accounting
Principles and to normal year-end audit adjustments) and present fairly the
financial condition of the Borrower and its Subsidiaries on a consolidated basis
as of the respective dates thereof and the consolidated results of operations of
the Borrower and its Subsidiaries for the respective periods then ended. Except
as fully reflected in the most recent financial statements referred to above and
the notes thereto, there are no material liabilities or obligations with respect
to the Borrower or any of its Subsidiaries of any nature whatsoever (whether
absolute, contingent or otherwise and whether or not due).
(b) The Borrower has heretofore furnished to the Administrative Agent
copies of the Annual Statements of each of the Insurance Subsidiaries as of
December 31, 1996, 1995, 1994 and 1993, and for the fiscal years then ended,
each as filed with the relevant Insurance Regulatory Authority (collectively,
the "Historical Statutory Statements"). The Historical Statutory Statements
(including, without limitation, the provisions made therein for investments and
the valuation thereof, reserves, policy and contract claims and statutory
liabilities) have been prepared in accordance with Statutory Accounting
Principles (except as may be reflected in the notes thereto and subject, with
respect to the Quarterly Statements, to the absence of notes required by
Statutory Accounting Principles and to normal year-end adjustments), were in
compliance with applicable Requirements of Law when filed and present
-37-
fairly the financial condition of the respective Insurance Subsidiaries covered
thereby as of the respective dates thereof and the results of operations,
changes in capital and surplus and cash flow of the respective Insurance
Subsidiaries covered thereby for the respective periods then ended. Except for
liabilities and obligations disclosed or provided for in the Historical
Statutory Statements (including, without limitation, reserves, policy and
contract claims and statutory liabilities), no Insurance Subsidiary had, as of
the date of its respective Historical Statutory Statements, any material
liabilities or obligations of any nature whatsoever (whether absolute,
contingent or otherwise and whether or not due) that, in accordance with
Statutory Accounting Principles, would have been required to have been disclosed
or provided for in such Historical Statutory Statements. All books of account of
each Insurance Subsidiary fully and fairly disclose all of its material
transactions, properties, assets, investments, liabilities and obligations, are
in its possession and are true, correct and complete in all material respects.
(c) Each of the Borrower and its Subsidiaries, after giving effect to the
consummation of the transactions contemplated hereby, (i) will have capital
sufficient to carry on its businesses as conducted and as proposed to be
conducted, (ii) will have assets with a fair saleable value, determined on a
going concern basis, (y) not less than the amount required to pay the probable
liability on its existing debts as they become absolute and matured and (z)
greater than the total amount of its liabilities (including identified
contingent liabilities, valued at the amount that can reasonably be expected to
become absolute and matured), and (iii) will not intend to, and will not believe
that it will, incur debts or liabilities beyond its ability to pay such debts
and liabilities as they mature.
III.12. Ownership of Properties. Each of the Borrower and its
-----------------------
Subsidiaries (i) has good and marketable title to all real property owned by it,
(ii) holds interests as lessee under valid leases in full force and effect with
respect to all material leased real and personal property used in connection
with its business, and (iii) has good title to all of its other properties and
assets reflected in the most recent financial statements referred to in SECTION
4.11(A) (except as sold or otherwise disposed of since the date thereof in the
ordinary course of business), in each case under (i), (ii) and (iii) above free
and clear of all Liens other than Permitted Liens.
III.13. ERISA. Each Plan is and has been administered in compliance in
-----
all material respects with all applicable Requirements of Law, including,
without limitation, the applicable provisions of ERISA and the Internal Revenue
Code. No ERISA Event has occurred and is continuing or, to the knowledge of the
Borrower, is reasonably expected to occur with respect to any Plan, in either
case that would be reasonably likely, individually or in the aggregate, to have
a Material Adverse Effect. No Plan has any Unfunded Pension Liability, and
neither the Borrower nor any ERISA Affiliate has engaged in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA, in either instance where
the same would be reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect. Neither the Borrower nor any ERISA Affiliate is
required to contribute to or has, or has at any time had, any liability to a
Multiemployer Plan.
III.14. Environmental Matters. (a) No Hazardous Substances are or have
---------------------
been generated, used, located, released, treated, disposed of or stored by the
Borrower or any of its Subsidiaries or, to the knowledge of the Borrower, by any
other Person or otherwise, in, on or under any portion of any real property,
leased or owned, of the Borrower or any of its
-38-
Subsidiaries, except in material compliance with all applicable Environmental
Laws, and no portion of any such real property or, to the knowledge of the
Borrower, any other real property at any time leased, owned or operated by the
Borrower or any of its Subsidiaries, has been contaminated by any Hazardous
Substance; and no portion of any real property, leased or owned, of the Borrower
or any of its Subsidiaries has been or, to the knowledge of the Borrower, is
presently the subject of an environmental audit, assessment or remedial action.
(b) To the knowledge of the Borrower, (i) no portion of any real property,
leased or owned, of the Borrower or any of its Subsidiaries has been used as or
for a mine, a landfill, a dump or other disposal facility, a gasoline service
station, or (other than for petroleum substances stored in the ordinary course
of business) a petroleum products storage facility, (ii) no portion of such real
property or any other real property at any time leased, owned or operated by the
Borrower or any of its Subsidiaries has, pursuant to any Environmental Law, been
placed on the "National Priorities List" or "CERCLIS List" (or any similar
federal, state or local list) of sites subject to possible environmental
problems, and (iii) there are not and have never been any underground storage
tanks situated on any real property, leased or owned, of the Borrower or any of
its Subsidiaries.
(c) All activities and operations of the Borrower and its Subsidiaries are
in compliance with the requirements of all applicable Environmental Laws, except
to the extent the failure so to comply, individually or in the aggregate, would
not be reasonably likely to have a Material Adverse Effect. Neither the
Borrower nor any of its Subsidiaries is involved in any suit, action or
proceeding, or has received any notice, complaint or other request for
information from any Governmental Authority or other Person, with respect to any
actual or alleged Environmental Claims that, if adversely determined, would be
reasonably likely, individually or in the aggregate, to have a Material Adverse
Effect; and, to the knowledge of the Borrower, there are no threatened actions,
suits, proceedings or investigations with respect to any such Environmental
Claims, nor any basis therefor.
III.15. Compliance With Laws. Each of the Borrower and its Subsidiaries
--------------------
has timely filed all material reports, documents and other materials required to
be filed by it under all applicable Requirements of Law with any Governmental
Authority, has retained all material records and documents required to be
retained by it under all applicable Requirements of Law, and is otherwise in
compliance with all applicable Requirements of Law in respect of the conduct of
its business and the ownership and operation of its properties, except for such
Requirements of Law the failure to comply with which, individually or in the
aggregate, would not be reasonably likely to have a Material Adverse Effect.
III.16. Regulated Industries. Neither the Borrower nor any of its
--------------------
Subsidiaries is (i) an "investment company," a company "controlled" by an
"investment company," or an "investment advisor," within the meaning of the
Investment Company Act of 1940, as amended, or (ii) a "holding company," a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
III.17. Insurance. The assets, properties and business of the Borrower
---------
and its Subsidiaries are insured against such hazards and liabilities, under
such coverages and in such
-39-
amounts, as are customarily maintained by prudent companies similarly situated
and under policies issued by insurers of recognized responsibility. No notice of
any pending or threatened cancellation or material premium increase has been
received by the Borrower or any of its Subsidiaries with respect to any such
policies, and the Borrower and each of its Subsidiaries are in substantial
compliance with all conditions contained therein.
ARTICLE IV
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, until the termination of the
Commitments and the payment in full of all principal and interest with respect
to the Loans together with all other amounts then due and owing hereunder:
IV.1. GAAP Financial Statements. The Borrower will deliver to each
-------------------------
Lender:
(a) As soon as available and in any event within sixty (60) days after the
end of each of the first three fiscal quarters of each fiscal year, beginning
with the fiscal quarter ended March 31, 1997, unaudited consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries as of the end
of such fiscal quarter and unaudited consolidated and consolidating statements
of income, stockholders' equity and cash flows for the Borrower and its
Subsidiaries for the fiscal quarter then ended and for that portion of the
fiscal year then ended, in each case setting forth comparative consolidated
figures as of the end of and for the corresponding period in the preceding
fiscal year, all prepared in accordance with Generally Accepted Accounting
Principles (subject to the absence of notes required by Generally Accepted
Accounting Principles and subject to normal year-end audit adjustments) applied
on a basis consistent with that of the preceding quarter or containing
disclosure of the effect on the financial condition or results of operations of
any change in the application of accounting principles and practices during such
quarter; and
(b) As soon as available and in any event within 120 days after the end of
each fiscal year, beginning with the fiscal year ended December 31, 1996, (i) an
audited consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of such fiscal year and audited consolidated statements of income,
stockholders' equity and cash flows for the Borrower and its Subsidiaries for
the fiscal year then ended, including the applicable notes, in each case setting
forth comparative figures as of the end of and for the preceding fiscal year,
certified by the independent certified public accounting firm regularly retained
by the Borrower or another independent certified public accounting firm of
recognized national standing reasonably acceptable to the Required Lenders,
together with (y) a report thereon by such accountants that is not qualified as
to going concern or scope of audit and to the effect that such financial
statements present fairly the consolidated financial condition and results of
operations of the Borrower and its Subsidiaries as of the dates and for the
periods indicated in accordance with generally accepted accounting principles
applied on a basis consistent with that of the preceding year or containing
disclosure of the effect on the financial position or results of operations of
any change in the application of accounting principles and practices during such
year, and (z) a report by such accountants to the effect that, based on and in
connection with
-40-
their examination of the financial statements of the Borrower and its
Subsidiaries, they obtained no knowledge of the occurrence or existence of any
Default or Event of Default relating to accounting or financial reporting
matters, or a statement specifying the nature and period of existence of any
such Default or Event of Default disclosed by their audit; provided, however,
-------- -------
that such accountants shall not be liable by reason of the failure to obtain
knowledge of any Default or Event of Default that would not be disclosed or
revealed in the course of their audit examination, and (ii) an unaudited
consolidating balance sheet of the Borrower and its Subsidiaries as of the end
of such fiscal year and unaudited consolidating statements of income,
stockholders' equity and cash flows for the Borrower and its Subsidiaries for
the fiscal year then ended, all in reasonable detail.
IV.2. Statutory Financial Statements. The Borrower will deliver to each
------------------------------
Lender:
(a) As soon as available and in any event within fifty (50) days after the
end of each of the first three fiscal quarters of each fiscal year, beginning
with the fiscal quarter ending March 31, 1997, a Quarterly Statement of each
Insurance Subsidiary as of the end of such fiscal quarter and for that portion
of the fiscal year then ended, in the form filed with the relevant Insurance
Regulatory Authority, prepared in accordance with Statutory Accounting
Principles applied on a basis consistent with that of the preceding quarter or
containing disclosure of the effect on the financial condition or results of
operations of any change in the application of accounting principles and
practices during such quarter; and
(b) As soon as available and in any event within sixty-five (65) days
after the end of each fiscal year, beginning with the fiscal year ending
December 31, 1997, an Annual Statement of each Insurance Subsidiary as of the
end of such fiscal year and for the fiscal year then ended, in the form filed
with the relevant Insurance Regulatory Authority, prepared in accordance with
Statutory Accounting Principles applied on a basis consistent with that of the
preceding year or containing disclosure of the effect on the financial condition
or results of operations of any change in the application of accounting
principles and practices during such year;
(c) As soon as available and in any event within 135 days after the end of
each fiscal year, beginning with the fiscal year ended December 31, 1996, an
unaudited consolidated balance sheet of the Borrower and its Insurance
Subsidiaries as of the end of such fiscal year and unaudited consolidated
statements of income, stockholders' equity and cash flows for the Borrower and
its Insurance Subsidiaries for the fiscal year then ended, in each case setting
forth comparative consolidated figures as of the end of and for the preceding
fiscal year, all prepared in accordance with Statutory Accounting Principles
applied on a basis consistent with that of the preceding year or containing
disclosure of the effect on the financial condition or results of operations of
any change in the application of accounting principles and practices during such
year; and
(d) As soon as available and in any event within 155 days after the end of
each fiscal year, beginning with the fiscal year ended December 31, 1996 (but
only if and to the extent required by the applicable Insurance Regulatory
Authority with regard to any Insurance Subsidiary), a certification by the
independent certified public accounting firm referred to in SECTION 5.1(B) as to
the Annual Statement of each such Insurance Subsidiary as of the end of such
fiscal year and for the fiscal year then ended, together with a report thereon
by such
-41-
accountants that is not qualified as to going concern or scope of audit
and to the effect that such financial statements present fairly the consolidated
financial condition and results of operations of such Insurance Subsidiary as of
the date and for the period indicated in accordance with statutory accounting
principles applied on a basis consistent with that of the preceding year or
containing disclosure of the effect on the financial position or results of
operations of any change in the application of accounting principles and
practices during such year.
IV.3. Other Business and Financial Information. The Borrower will deliver
----------------------------------------
to each Lender:
(a) Concurrently with each delivery of the financial statements described
in SECTIONS 5.1 and 5.2, a Compliance Certificate in the form of EXHIBIT D-1 (in
the case of the financial statements described in SECTION 5.1) or EXHIBIT D-2
(in the case of the financial statements described in SECTION 5.2) with respect
to the period covered by the financial statements then being delivered, executed
by the chief financial officer, vice president - finance or treasurer of the
Borrower, together, in the case of the financial statements described in SECTION
5.1, with a Covenant Compliance Worksheet reflecting the computation of the
financial covenants set forth in SECTIONS 6.1, 6.2 and 6.3 as of the last day of
the period covered by such financial statements, and in the case of the
financial statements described in SECTION 5.2, with a Covenant Compliance
Worksheet reflecting the computation of the financial covenants set forth in
SECTION 6.4 as of the last day of the period covered by such financial
statements;
(b) Promptly upon filing with the relevant Insurance Regulatory Authority
and in any event within ninety (90) days after the end of each fiscal year,
beginning with the fiscal year ended December 31, 1997, a copy of each Insurance
Subsidiary's "Statement of Actuarial Opinion" (or equivalent information should
the relevant Insurance Regulatory Authority not require such a statement) as to
the adequacy of such Insurance Subsidiary's loss reserves for such fiscal year,
together with a copy of its management discussion and analysis in connection
therewith, each in the format prescribed by the applicable insurance laws of
such Insurance Subsidiary's jurisdiction of domicile;
(c) Promptly upon the sending, filing or receipt thereof, copies of (i)
all financial statements, reports, notices and proxy statements that the
Borrower or any of its Subsidiaries shall send or make available generally to
its shareholders, (ii) all reports (other than earnings press releases) on Form
10-Q, Form 10-K or Form 8-K (or their successor forms) or registration
statements and prospectuses (other than on Form S-8 or its successor form) that
the Borrower or any of its Subsidiaries shall render to or file with the
Securities and Exchange Commission, the National Association of Securities
Dealers, Inc. or any national securities exchange, (iii) all reports on Form A
or Form B (or their successor forms) that any Insurance Subsidiary shall file
with any Insurance Regulatory Authority, (iv) all significant reports on
examination or similar significant reports, financial examination reports or
market conduct examination reports by the NAIC or any Insurance Regulatory
Authority or other Governmental Authority with respect to any Insurance
Subsidiary's insurance business, and (v) all significant filings made under
applicable state insurance holding company acts by the Borrower or any of its
Subsidiaries, including, without limitation, filings seeking approval of
transactions with Affiliates;
(d) Promptly upon (and in any event within five (5) Business Days after)
obtaining
-42-
knowledge thereof, written notice of any of the following:
(i) the occurrence of any Default or Event of Default, together
with a written statement of the chief executive officer, chief financial
officer or vice president - finance of the Borrower specifying the nature
of such Default or Event of Default, the period of existence thereof and
the action that the Borrower has taken and proposes to take with respect
thereto;
(ii) the institution or threatened institution of any action,
suit, investigation or proceeding against or affecting the Borrower or any
of its Subsidiaries, including any such investigation or proceeding by any
Insurance Regulatory Authority or other Governmental Authority (other than
routine periodic inquiries, investigations or reviews), that would, if
adversely determined, be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect, and any material development
in any litigation or other proceeding previously reported pursuant to
SECTION 4.5 or this SECTION 5.3(D)(II);
(iii) the receipt by the Borrower or any of its Subsidiaries from
any Insurance Regulatory Authority or other Governmental Authority of (i)
any notice asserting any failure by the Borrower or any of its Subsidiaries
to be in compliance with applicable Requirements of Law or that threatens
the taking of any action against the Borrower or such Subsidiary or sets
forth circumstances that, if taken or adversely determined, would be
reasonably likely to have a Material Adverse Effect, or (ii) any notice of
any actual or threatened suspension, limitation or revocation of, failure
to renew, or imposition of any restraining order, escrow or impoundment of
funds in connection with, any license, permit, accreditation or
authorization of the Borrower or any of its Subsidiaries, where such action
would be reasonably likely to have a Material Adverse Effect;
(iv) the occurrence of any ERISA Event, together with (i) a
written statement of the chief executive officer, chief financial officer
or vice president - finance of the Borrower specifying the details of such
ERISA Event and the action that the Borrower has taken and proposes to take
with respect thereto, (ii) a copy of any notice with respect to such ERISA
Event that may be required to be filed with the PBGC and (iii) a copy of
any notice delivered by the PBGC to the Borrower or such ERISA Affiliate
with respect to such ERISA Event;
(v) the occurrence of any decrease in (y) the rating given by
either Standard & Poor's or Xxxxx'x with respect to the Borrower's senior
publicly traded Indebtedness or (z) the rating given to any Insurance
Subsidiary by A.M. Best & Company; and
(vi) any other matter or event that has, or would be reasonably
likely to have, a Material Adverse Effect, together with a written
statement of the chief executive officer, chief financial officer or vice
president -finance of the Borrower setting forth the nature and period of
existence thereof and the action that the Borrower has taken and proposes
to take with respect thereto;
-43-
(e) Within five (5) Business Days after request therefor by any Lender, if
theretofore prepared and delivered to the Borrower, or within ninety (90) days
after request therefor by the Required Lenders from time to time (but not more
than once per year), if not theretofore prepared and delivered to the Borrower,
in either case at the Borrower's expense, an actuarial review and valuation
statement of, and opinion as to the adequacy of, each Insurance Subsidiary's
loss and loss adjustment expense reserve positions as of the end of such year
with respect to the insurance business then in force, and covering such other
subjects as are customary in actuarial reviews, prepared by KPMG Peat Marwick or
another independent actuarial firm reasonably acceptable to the Required
Lenders, together with a favorable review letter thereon by the Borrower's
regularly retained independent certified public accountants, all in form and
substance satisfactory to the Required Lenders; and
(f) As promptly as reasonably possible, such other information about the
business, condition (financial or otherwise), operations or properties of the
Borrower or any of its Subsidiaries as the Administrative Agent or any Lender
may from time to time reasonably request.
IV.4. Corporate Existence; Franchises; Maintenance of Properties. The
----------------------------------------------------------
Borrower will, and will cause each of its Subsidiaries to, (i) maintain and
preserve in full force and effect its corporate existence, except as expressly
permitted otherwise by SECTION 7.1, (ii) obtain, maintain and preserve in full
force and effect all other rights, franchises, licenses, permits,
certifications, approvals and authorizations required by Governmental
Authorities and necessary to the ownership, occupation or use of its properties
or the conduct of its business, except to the extent the failure to do so would
not be reasonably likely to have a Material Adverse Effect, and (iii) keep all
material properties in good working order and condition (normal wear and tear
excepted) and from time to time make all necessary repairs to and renewals and
replacements of such properties, except to the extent that any of such
properties are obsolete or are being replaced.
IV.5. Compliance with Laws. The Borrower will, and will cause each of its
--------------------
Subsidiaries to, comply in all respects with all Requirements of Law applicable
in respect of the conduct of its business and the ownership and operation of its
properties, except to the extent the failure so to comply would not be
reasonably likely to have a Material Adverse Effect.
IV.6. Payment of Obligations. The Borrower will, and will cause each of
----------------------
its Subsidiaries to, (i) pay all liabilities and obligations as and when due
(subject to any applicable subordination provisions), except to the extent
failure to do so would not be reasonably likely to have a Material Adverse
Effect, and (ii) pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it, upon its income or profits or upon any of its
properties, prior to the date on which penalties would attach thereto, and all
lawful claims that, if unpaid, might become a Lien upon any of the properties of
the Borrower or any of its Subsidiaries; provided, however, that neither the
-------- -------
Borrower nor any of its Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim that is being contested in good faith and by
proper proceedings and as to which the Borrower or such Subsidiary is
maintaining adequate reserves with respect thereto in accordance with Generally
Accepted Accounting Principles.
-44-
IV.7. Insurance. The Borrower will, and will cause each of its
---------
Subsidiaries to, maintain with financially sound and reputable insurance
companies insurance with respect to its assets, properties and business, against
such hazards and liabilities, of such types and in such amounts, as is
customarily maintained by companies in the same or similar businesses similarly
situated; provided that the Borrower and its Subsidiaries may self-insure
--------
against risks consistent with customary industry practices for companies in the
same or similar businesses, of similar size and with similar risk parameters.
IV.8. Maintenance of Books and Records; Inspection. The Borrower will,
--------------------------------------------
and will cause each of its Subsidiaries to, (i) maintain adequate books,
accounts and records, in which full, true and correct entries shall be made of
all financial transactions in relation to its business and properties, and
prepare all financial statements required under this Agreement, in each case in
accordance with Generally Accepted Accounting Principles or Statutory Accounting
Principles, as applicable, and in compliance with the requirements of any
Governmental Authority having jurisdiction over it, and (ii) permit employees or
agents of the Administrative Agent or any Lender to inspect its properties and
examine or audit its books, records, working papers and accounts and make copies
and memoranda of them, and to discuss its affairs, finances and accounts with
its officers and employees and, upon notice to the Borrower, the independent
public accountants of the Borrower and its Subsidiaries (and by this provision
the Borrower authorizes such accountants to discuss the finances and affairs of
the Borrower and its Subsidiaries), all at such times and from time to time,
upon reasonable notice and during business hours, as may be reasonably
requested.
IV.9. Dividends. The Borrower will take all action necessary to cause its
---------
Subsidiaries to make such dividends, distributions or other payments to the
Borrower as shall be necessary for the Borrower to make payments of the
principal of and interest on the Loans in accordance with the terms of this
Agreement. In the event the approval of any Governmental Authority or other
Person is required in order for any such Subsidiary to make any such dividends,
distributions or other payments to the Borrower, or for the Borrower to make any
such principal or interest payments, the Borrower will forthwith exercise its
best efforts and take all actions permitted by law and necessary to obtain such
approval.
IV.10. Further Assurances. The Borrower will, and will cause each of its
------------------
Subsidiaries to, make, execute, endorse, acknowledge and deliver any amendments,
modifications or supplements hereto and restatements hereof and any other
agreements, instruments or documents, and take any and all such other actions,
as may from time to time be reasonably requested by the Administrative Agent or
the Required Lenders to effect, confirm or further assure or protect and
preserve the interests, rights and remedies of the Administrative Agent and the
Lenders under this Agreement and the other Credit Documents.
-45-
ARTICLE V
FINANCIAL COVENANTS
The Borrower covenants and agrees that, until the termination of the
Commitments and the payment in full of all principal and interest with respect
to the Loans together with all other amounts then due and owing hereunder:
V.1. Capitalization Ratio. The Borrower will not permit the Capitalization
--------------------
Ratio to be greater than 0.425 to 1.0 as of the last day of any fiscal quarter,
beginning with the fiscal quarter ended December 31, 1996.
V.2. Consolidated Net Worth. The Borrower will not permit Consolidated Net
----------------------
Worth:
(i) As of the last day of the fiscal quarter ended December 31,
1996, to be less than the aggregate of (i) $250,000,000, plus (ii) 50% of
----
the aggregate of Consolidated Net Income for such fiscal quarter (provided
--------
that Consolidated Net Income for such fiscal quarter shall be taken into
account for purposes of this calculation only if positive), minus (iii) the
-----
aggregate of all amounts paid by the Borrower as dividends or distributions
in respect of its equity securities at any time during such fiscal quarter;
and
(ii) As of the last day of any fiscal quarter ending thereafter,
to be less than the aggregate of (i) $350,000,000, plus (ii) 50% of the
----
aggregate of Consolidated Net Income for each fiscal quarter ending after
September 30, 1996 up to and including the fiscal quarter then ending
(provided that Consolidated Net Income for any such fiscal quarter shall be
--------
taken into account for purposes of this calculation only if positive),
minus (iii) the aggregate of all amounts paid by the Borrower as dividends
-----
or distributions in respect of its equity securities at any time after
September 30, 1996 up to and including the last day of the fiscal quarter
then ending.
V.3. Fixed Charge Coverage Ratio. The Borrower will not permit the Fixed
---------------------------
Charge Coverage Ratio to be less than 3.0 to 1.0 as of the last day of any
fiscal quarter, beginning with the fiscal quarter ended December 31, 1996;
provided, however, that the provisions of this SECTION 6.3 shall not be
-------- -------
satisfied as of the last day of any fiscal quarter unless, in addition to the
foregoing requirement with respect to the Fixed Charge Coverage Ratio, (i) the
aggregate (without duplication) of the maximum amount that is or would be
permitted by the Insurance Regulatory Authority of the jurisdiction of domicile
of each Insurance Subsidiary under applicable Requirements of Law (without the
necessity of any consent, approval or other action of such Insurance Regulatory
Authority involving the granting of permission or the exercise of discretion by
such Insurance Regulatory Authority), to be paid as dividends to the Borrower by
the Insurance Subsidiaries in respect of the period of four consecutive fiscal
quarters ending on such date as if such period were a fiscal year (whether or
not any such dividends are actually paid), exceeds (ii) the aggregate (without
duplication) of all scheduled principal and interest in respect of Indebtedness
of the Borrower and its Subsidiaries paid or accrued by the Borrower and its
Subsidiaries during such period.
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V.4. Risk-Based Capital. The Borrower will not permit "total adjusted
------------------
capital" (within the meaning of the Risk-Based Capital for Insurers Model Act as
promulgated by the NAIC as of the Original Credit Agreement Date (the "Model
Act")) of VFIC at any time from and after the Amendment Effective Date to be
less than 150% of the applicable "Company Action Level RBC" (within the meaning
of the Model Act) for VFIC at such time.
ARTICLE VI
NEGATIVE COVENANTS
The Borrower covenants and agrees that, until the termination of the
Commitments and the payment in full of all principal and interest with respect
to the Loans together with all other amounts then due and owing hereunder:
VI.1. Merger; Consolidation. The Borrower will not, and will not permit
---------------------
or cause any of its Significant Subsidiaries to, liquidate, wind up or dissolve,
or enter into any consolidation, merger or other combination, or agree to do any
of the foregoing; provided, however, that the Borrower or any Significant
-------- -------
Subsidiary may merge into or consolidate with any other Person so long as (y)
the surviving corporation is the Borrower or a Wholly Owned Subsidiary (and in
any event, if the Borrower is a party to such merger or consolidation, the
surviving corporation shall be the Borrower) and (z) immediately after giving
effect thereto, no Default or Event of Default would exist.
VI.2. Indebtedness. The Borrower will not create, incur, assume or suffer
------------
to exist, and will not permit or cause any of its Subsidiaries to create, incur,
or knowingly assume or suffer to exist, any Indebtedness that ranks senior in
any respect to the Indebtedness under this Agreement (or any portion thereof) as
to payment or performance or as to dividends or distributions upon bankruptcy,
insolvency, liquidation or winding-up.
VI.3. Liens. The Borrower will not, and will not permit or cause any of
-----
its Subsidiaries to, directly or indirectly, make, create, incur, assume or
suffer to exist, or enter into or suffer to exist any agreement or restriction
that prohibits or conditions the creation, incurrence or assumption of, any Lien
upon or with respect to any part of its property or assets, whether now owned or
hereafter acquired, or agree to do any of the foregoing, other than the
following (collectively, "Permitted Liens"):
(i) Liens in existence on the Amendment Effective Date and set
forth on SCHEDULE 7.3;
(ii) Liens imposed by law, such as Liens of carriers,
warehousemen, mechanics, materialmen and landlords, and other similar Liens
incurred in the ordinary course of business for sums not constituting
borrowed money that are not overdue for a period of more than thirty (30)
days or that are being contested in good faith by appropriate proceedings
and for which adequate reserves have been established in accordance with
Generally Accepted Accounting Principles;
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(iii) Liens (other than any Lien imposed by ERISA, the creation or
incurrence of which would result in an Event of Default under SECTION
8.1(I)) incurred in the ordinary course of business in connection with
worker's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure the performance of letters
of credit, bids, tenders, statutory obligations, surety and appeal bonds,
leases, government contracts and other similar obligations (other than
obligations for borrowed money) entered into in the ordinary course of
business;
(iv) Liens for taxes, assessments or other governmental charges
or statutory obligations that are not delinquent or remain payable without
any penalty or that are being contested in good faith by appropriate
proceedings and for which adequate reserves have been established in
accordance with Generally Accepted Accounting Principles;
(v) Liens in connection with pledges and deposits made pursuant
to statutory and regulatory requirements of Insurance Regulatory
Authorities by an Insurance Subsidiary in the ordinary course of its
business, for the purpose of securing regulatory capital or satisfying
other financial responsibility requirements;
(vi) Liens upon cash and United States government and agency
securities of the Borrower and its Subsidiaries, securing obligations
incurred in connection with reverse repurchase transactions and other
similar investment management transactions of such types and in such
amounts as are customary for companies similar to the Borrower in size and
lines of business and that are entered into by the Borrower and its
Subsidiaries in the ordinary course of business;
(vii) Purchase money Liens upon real or personal property used by
the Borrower or any of its Subsidiaries in the ordinary course of its
business, securing Indebtedness incurred solely to pay all or a portion of
the purchase price thereof (including in connection with capital leases,
and including mortgages or deeds of trust upon real property and
improvements thereon), provided that the aggregate principal amount at any
--------
time outstanding of all Indebtedness secured by such Liens does not exceed
an amount equal to 5% of the value of the total assets of the Borrower and
its Subsidiaries at such time, determined on a consolidated basis in
accordance with Generally Accepted Accounting Principles as of the date of
the financial statements of the Borrower and its Subsidiaries most recently
delivered under SECTION 5.1 prior to such time (or, with regard to
determinations at any time prior to the initial delivery of financial
statements under SECTION 5.1, as of the date of the most recent financial
statements referred to in SECTION 4.11(A)), and provided further that any
-------- -------
such Lien (i) shall attach to such property concurrently with or within ten
(10) days after the acquisition thereof by the Borrower or such Subsidiary,
(ii) shall not exceed the lesser of (y) the fair market value of such
property or (z) the cost thereof to the Borrower or such Subsidiary and
(iii) shall not encumber any other property of the Borrower or any of its
Subsidiaries;
(viii) Liens on Borrower Margin Stock, to the extent the fair
market value
-48-
thereof exceeds 25% of the fair market value of the assets of the Borrower
and its Subsidiaries (including Borrower Margin Stock);
(ix) Any attachment or judgment Lien not constituting an Event of
Default under SECTION 8.1(H) that is being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established in accordance with Generally Accepted Accounting Principles;
(x) With respect to any real property occupied by the Borrower
or any of its Subsidiaries, all easements, rights of way, licenses and
similar encumbrances on title that do not materially impair the use of such
property for its intended purposes; and
(xi) Liens in favor of the trustee or agent under any agreement or
indenture relating to Indebtedness of the Borrower and its Subsidiaries
permitted under this Agreement, covering sums required to be deposited with
such trustee or agent thereunder.
VI.4. Disposition of Assets. The Borrower will not, and will not permit
---------------------
or cause any of its Subsidiaries to, sell, assign, lease, convey, transfer or
otherwise dispose of (whether in one or a series of transactions) all or any
portion of its assets, business or properties, or enter into any arrangement
with any Person providing for the lease by the Borrower or any Subsidiary as
lessee of any asset that has been sold or transferred by the Borrower or such
Subsidiary to such Person, or agree to do any of the foregoing, except for:
(i) sales of Investments by the Insurance Subsidiaries in the
ordinary course of business;
(ii) the sale or exchange of used or obsolete equipment to the
extent (y) the proceeds of such sale are applied towards, or such equipment
is exchanged for, similar replacement equipment or (z) such equipment is no
longer necessary for the operations of the Borrower or its applicable
Subsidiary in the ordinary course of business;
(iii) the sale, lease or other disposition of assets by a
Subsidiary of the Borrower to the Borrower or to another Wholly Owned
Subsidiary, to the extent permitted by applicable Requirements of Law and
each relevant Insurance Regulatory Authority, provided that (x) immediately
--------
after giving effect thereto, no Default or Event of Default would exist,
(y) in no event shall the Borrower contribute, sell or otherwise transfer,
or permit VFIC to issue or sell, any of the capital stock of VFIC to any
other Subsidiary, and (z) such sale or disposition would not adversely
affect the ability of any Insurance Subsidiary party thereto to pay
dividends or otherwise make distributions to its parent;
(iv) the sale or other disposition of any Borrower Margin Stock
to the extent the fair market value thereof exceeds 25% of the fair market
value of the assets of the Borrower and its Subsidiaries (including
Borrower Margin Stock), provided that fair value is received in exchange
--------
therefor; and
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(v) the sale or disposition of assets outside the ordinary course
of business, provided that (w) the net proceeds from any such sale or
--------
disposition do not exceed an amount equal to the least of the following:
(1) 10% of the total assets of the Borrower and its Subsidiaries on a
consolidated basis, (2) 10% of the total revenues of the Borrower and its
Subsidiaries on a consolidated basis, and (3) 10% of the total net earnings
of the Borrower and its Subsidiaries on a consolidated basis, in each case
as determined as of the date of the financial statements of the Borrower
and its Subsidiaries most recently delivered under SECTION 5.1 prior to
such time (or, with regard to determinations at any time prior to the
initial delivery of financial statements under SECTION 5.1, as of the date
of the most recent financial statements referred to in SECTION 4.11(A)),
(x) immediately after giving effect thereto, the Borrower would be in
compliance with the provisions of SECTION 6.2, such compliance determined
on a pro forma basis in accordance with Generally Accepted Accounting
--- -----
Principles as if such sale or disposition had been consummated on the last
day of the then most recently ended fiscal quarter, (y) immediately after
giving effect thereto, no Default or Event of Default would exist, and (z)
in no event shall the Borrower or any of its Subsidiaries sell or otherwise
dispose of any of the capital stock or other ownership interests of VFIC or
any other Significant Subsidiary.
VI.5. Transactions with Affiliates. The Borrower will not, and will not
----------------------------
permit or cause any of its Subsidiaries to, enter into any transaction with any
officer, director, stockholder or other Affiliate of the Borrower or any
Subsidiary, except in the ordinary course of its business and upon fair and
reasonable terms that are no less favorable to it than would obtain in a
comparable arm's length transaction with a Person other than an Affiliate of the
Borrower or such Subsidiary; provided, however, that nothing contained in this
-------- -------
Section shall prohibit:
(i) transactions between and among the Borrower and its Wholly
Owned Subsidiaries;
(ii) transactions under incentive compensation plans, stock
option plans and other employee benefit plans, and loans and advances from
the Borrower or any of its Subsidiaries to its officers, in each case that
have been approved by the board of directors of the Borrower or any of its
Subsidiaries; and
(iii) the payment by the Borrower of reasonable and customary fees
to members of its board of directors.
VI.6. Lines of Business. The Borrower will not, and will not permit or
-----------------
cause any of its Subsidiaries to, engage to any substantial degree in any
business other than the lines of property and casualty insurance business and
other businesses engaged in by the Borrower and its Subsidiaries on the date
hereof or a business reasonably related thereto.
VI.7. Fiscal Year. The Borrower will not, and will not permit or cause
-----------
any of its Subsidiaries to, change the ending date of its fiscal year to a date
other than December 31 unless (i) the Borrower shall have given the Lenders
written notice of its intention to change such ending date at least sixty (60)
days prior to the effective date thereof and (ii) prior to such effective date
this Agreement shall have been amended to make any changes in the financial
-50-
covenants and other terms and conditions to the extent necessary, in the
reasonable determination of the Required Lenders, to reflect the new fiscal year
ending date.
VI.8. Accounting Changes. The Borrower will not, and will not permit or
------------------
cause any of its Subsidiaries to, make or permit any material change in its
accounting policies or reporting practices, except as may be required or
permitted by Generally Accepted Accounting Principles or Statutory Accounting
Principles, as applicable.
ARTICLE VII
EVENTS OF DEFAULT
VII.1. Events of Default. The occurrence of any one or more of the
-----------------
following events shall constitute an "Event of Default":
(a) The Borrower shall fail to pay any principal of or interest on any
Loan, any fee or any other Obligation when due;
(b) The Borrower shall fail to observe, perform or comply with any
condition, covenant or agreement contained in any of SECTIONS 2.12, 5.3(D)(I) or
5.4(I), ARTICLE VI, or SECTIONS 7.1 through 7.4, inclusive;
(c) The Borrower or any of its Subsidiaries shall fail to observe, perform
or comply with any condition, covenant or agreement contained in this Agreement
or any of the other Credit Documents other than those enumerated in subsections
(a) and (b) above, and such failure shall continue unremedied for any grace
period specifically applicable thereto or, if no such grace period is
applicable, for a period of thirty (30) days after the Borrower acquires
knowledge thereof;
(d) Any representation or warranty made or deemed made by or on behalf of
the Borrower or any of its Subsidiaries in this Agreement, any of the other
Credit Documents or in any certificate, instrument, report or other document
furnished in connection herewith or therewith or in connection with the
transactions contemplated hereby or thereby shall prove to have been false or
misleading in any material respect as of the time made, deemed made or
furnished;
(e) The Borrower or any of its Subsidiaries shall (i) fail to pay when due
(whether by scheduled maturity, acceleration or otherwise and after giving
effect to any applicable grace period) any principal of or interest on any
Indebtedness (other than the Indebtedness incurred pursuant to this Agreement)
having an aggregate principal amount of at least $1,000,000; or (ii) fail to
observe, perform or comply with any condition, covenant or agreement contained
in any agreement or instrument evidencing or relating to any such Indebtedness,
or any other event shall occur or condition exist in respect thereof, and the
effect of such failure, event or condition is to cause, or permit the holder or
holders of such Indebtedness (or a trustee or agent on its or their behalf) to
cause (with the giving of notice, lapse of time, or both), such Indebtedness to
become due, or to be prepaid, redeemed, purchased or defeased, prior to its
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stated maturity;
(f) The Borrower or any of its Significant Subsidiaries shall (i) file a
voluntary petition or commence a voluntary case seeking liquidation, winding-up,
reorganization, dissolution, arrangement, readjustment of debts or any other
relief under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to controvert in a timely and appropriate manner, any
petition or case of the type described in subsection (g) below, (iii) apply for
or consent to the appointment of or taking possession by a custodian, trustee,
receiver or similar official for or of itself or all or a substantial part of
its properties or assets, (iv) fail generally, or admit in writing its
inability, to pay its debts generally as they become due, (v) make a general
assignment for the benefit of creditors or (vi) take any corporate action to
authorize or approve any of the foregoing;
(g) Any involuntary petition or case shall be filed or commenced against
the Borrower or any of its Significant Subsidiaries seeking liquidation,
winding-up, reorganization, dissolution, arrangement, readjustment of debts, the
appointment of a custodian, trustee, receiver or similar official for it or all
or a substantial part of its properties or any other relief under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, and such petition or case shall continue undismissed and
unstayed for a period of sixty (60) days; or an order, judgment or decree
approving or ordering any of the foregoing shall be entered in any such
proceeding;
(h) Any one or more money judgments, writs or warrants of attachment,
executions or similar processes involving an aggregate amount (exclusive of
amounts fully bonded or covered by insurance as to which the surety or insurer,
as the case may be, has acknowledged its liability in writing) in excess of
$5,000,000 shall be entered or filed against the Borrower or any of its
Subsidiaries or any of their respective properties, and (i) the same is not
dismissed, stayed or discharged within sixty (60) days or is not otherwise being
appropriately contested in good faith and in a manner reasonably satisfactory to
the Required Lenders, or (ii) the same is not dismissed, stayed or discharged
within five (5) days prior to any proposed sale of assets of the Borrower or any
Subsidiary pursuant thereto, or (iii) any action shall be legally taken by a
judgment creditor to levy upon assets of the Borrower or any Subsidiary to
enforce the same;
(i) Any ERISA Event shall occur or exist with respect to any Plan or
Multiemployer Plan and, as a result thereof, together with all other ERISA
Events then existing, there shall exist a reasonable likelihood of liability to
any one or more Plans or Multiemployer Plans or to the PBGC (or to any
combination thereof) in excess of $1,000,000 with respect to the Borrower or any
ERISA Affiliate;
(j) Any Insurance Regulatory Authority or other Governmental Authority
having jurisdiction shall issue any order of conservation, supervision,
rehabilitation or liquidation or any other order of similar effect in respect of
any Insurance Subsidiary, and such action, individually or in the aggregate,
would be reasonably likely to have a Material Adverse Effect;
(k) Any one or more licenses, permits, accreditations or authorizations of
the Borrower or any of its Subsidiaries shall be suspended, limited or
terminated or shall not be
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renewed, or any other action shall be taken, by any Governmental Authority in
response to any alleged failure by the Borrower or any of its Subsidiaries to be
in compliance with applicable Requirements of Law, and such action, individually
or in the aggregate, would be reasonably likely to have a Material Adverse
Effect; or
(l) Any of the following shall occur: (i) any Person or group of Persons
acting in concert as a partnership or other group (other than Torchmark) shall,
as a result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise, have become, after the date hereof, the
"beneficial owner" (within the meaning of such term under Rule 13d-3 under the
Exchange Act) of securities of the Borrower representing 30% or more of the
combined voting power of the then outstanding securities of the Borrower
ordinarily (and apart from rights accruing under special circumstances) having
the right to vote in the election of directors; (ii) the Board of Directors of
the Borrower shall cease to consist of a majority of the individuals who
constituted the Board of Directors of the Borrower as of the date hereof or who
shall have become a member thereof subsequent to the date hereof after having
been nominated, or otherwise approved in writing, by at least a majority of
individuals who constituted the Board of Directors of the Borrower as of the
date hereof (or their replacements approved as herein required); or (iii) the
Borrower shall cease to own directly 100% of the issued and outstanding capital
stock of VFIC or its successor by merger or consolidation as permitted hereunder
(including, without limitation, as a result of the contribution, sale or
transfer by the Borrower, or the issuance or sale by VFIC, of any capital stock
of VFIC to any one or more other Subsidiaries of the Borrower).
VII.2. Remedies: Termination of Commitments, Acceleration, etc. Upon and
-------------------------------------------------------
at any time after the occurrence and during the continuance of any Event of
Default, the Administrative Agent shall at the direction, or may with the
consent, of the Required Lenders, take any or all of the following actions at
the same or different times:
(a) Declare the Facility A Commitments and/or the Facility B Commitments to
be terminated, whereupon the same shall terminate (provided that, upon the
--------
occurrence of an Event of Default pursuant to SECTION 8.1(F) or SECTION 8.1(G),
all of the Commitments shall automatically be terminated);
(b) Declare all or any part of the outstanding principal amount of the
Loans to be immediately due and payable, whereupon the principal amount so
declared to be immediately due and payable, together with all interest accrued
thereon and all other amounts payable under this Agreement, the Notes and the
other Credit Documents, shall become immediately due and payable without
presentment, demand, protest, notice of intent to accelerate or other notice or
legal process of any kind, all of which are hereby knowingly and expressly
waived by the Borrower (provided that, upon the occurrence of an Event of
--------
Default pursuant to SECTION 8.1(F) or SECTION 8.1(G), all of the outstanding
principal amount of the Loans and all other amounts described in this subsection
(b) shall automatically become immediately due and payable without presentment,
demand, protest, notice of intent to accelerate or other notice or legal process
of any kind, all of which are hereby knowingly and expressly waived by the
Borrower); and
(c) Exercise all rights and remedies available to it under this Agreement,
the other
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Credit Documents and applicable law.
VII.3. Remedies: Set-Off. In addition to all other rights and remedies
-----------------
available under the Credit Documents or applicable law or otherwise, upon and at
any time after the occurrence and during the continuance of any Event of
Default, each Lender may, and each is hereby authorized by the Borrower, at any
such time and from time to time, to the fullest extent permitted by applicable
law, without presentment, demand, protest or other notice of any kind, all of
which are hereby knowingly and expressly waived by the Borrower, to set off and
to apply any and all deposits (general or special, time or demand, provisional
or final) and any other property at any time held (including at any branches or
agencies, wherever located), and any other indebtedness at any time owing, by
such Lender to or for the credit or the account of the Borrower against any or
all of the Obligations to such Lender now or hereafter existing, whether or not
such Obligations may be contingent or unmatured, the Borrower hereby granting to
each Lender a continuing security interest in and Lien upon all such deposits
and other property as security for such Obligations. Each Lender agrees to
notify the Borrower promptly after any such set-off and application; provided,
--------
however, that the failure to give such notice shall not affect the validity of
-------
such set-off and application.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
VIII.1. Appointment. Each Lender hereby irrevocably appoints and
-----------
authorizes First Union to act as Administrative Agent hereunder and under the
other Credit Documents and to take such actions as agent on its behalf hereunder
and under the other Credit Documents, and to exercise such powers and to perform
such duties, as are specifically delegated to the Administrative Agent by the
terms hereof or thereof, together with such other powers and duties as are
reasonably incidental thereto.
VIII.2. Nature of Duties. The Administrative Agent shall have no duties
----------------
or responsibilities other than those expressly set forth in this Agreement and
the other Credit Documents. The Administrative Agent shall not have, by reason
of this Agreement or any other Credit Document, a fiduciary relationship in
respect of any Lender; and nothing in this Agreement or any other Credit
Document, express or implied, is intended to or shall be so construed as to
impose upon the Administrative Agent any obligations or liabilities in respect
of this Agreement or any other Credit Document except as expressly set forth
herein or therein. The Administrative Agent may execute any of its duties under
this Agreement or any other Credit Document by or through agents or attorneys-
in-fact and shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact that it selects with reasonable care. The
Administrative Agent shall be entitled to consult with legal counsel,
independent public accountants and other experts selected by it with respect to
all matters pertaining to this Agreement and the other Credit Documents and its
duties hereunder and thereunder and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts. The Lenders hereby acknowledge that the
Administrative Agent shall not be under any duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Credit Document
-54-
unless it shall be requested in writing to do so by the Required Lenders (or,
where a higher percentage of the Lenders is expressly required hereunder, such
Lenders).
VIII.3. Exculpatory Provisions. Neither the Administrative Agent nor any
----------------------
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action taken or omitted to be taken by it or such
Person under or in connection with the Credit Documents, except for its or such
Person's own gross negligence or willful misconduct, (ii) responsible in any
manner to any Lender for any recitals, statements, information, representations
or warranties herein or in any other Credit Document or in any document,
instrument, certificate, report or other writing delivered in connection
herewith or therewith, for the execution, effectiveness, genuineness, validity,
enforceability or sufficiency of this Agreement or any other Credit Document, or
for the financial condition of the Borrower, its Subsidiaries or any other
Person, or (iii) required to ascertain or make any inquiry concerning the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Credit Document or the existence or possible existence of
any Default or Event of Default, or to inspect the properties, books or records
of the Borrower or any of its Subsidiaries.
VIII.4. Reliance by Administrative Agent. The Administrative Agent shall
--------------------------------
be entitled to rely, and shall be fully protected in relying, upon any notice,
statement, consent or other communication (including, without limitation, any
thereof by telephone, telecopy, telex, telegram or cable) believed by it in good
faith to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons. The Administrative Agent may deem and treat each
Lender as the owner of its interest hereunder for all purposes hereof unless and
until a written notice of the assignment, negotiation or transfer thereof shall
have been given to the Administrative Agent in accordance with the provisions of
this Agreement. The Administrative Agent shall be entitled to refrain from
taking or omitting to take any action in connection with this Agreement or any
other Credit Document (i) if such action or omission would, in the reasonable
opinion of the Administrative Agent, violate any applicable law or any provision
of this Agreement or any other Credit Document or (ii) unless and until it shall
have received such advice or concurrence of the Required Lenders (or, where a
higher percentage of the Lenders is expressly required hereunder, such Lenders)
as it deems appropriate or it shall first have been indemnified to its
satisfaction by the Lenders against any and all liability and expense (other
than liability and expense arising from its own gross negligence or willful
misconduct) that may be incurred by it by reason of taking, continuing to take
or omitting to take any such action. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent's acting or refraining from acting hereunder
or under any other Credit Document in accordance with the instructions of the
Required Lenders (or, where a higher percentage of the Lenders is expressly
required hereunder, such Lenders), and such instructions and any action taken or
failure to act pursuant thereto shall be binding upon all of the Lenders
(including all subsequent Lenders).
VIII.5. Non-Reliance on Administrative Agent and Other Lenders. 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 representation or warranty to it and that no act by the Administrative
Agent or any such Person hereafter taken, including any review of the affairs of
the Borrower and its Subsidiaries, shall be deemed to constitute any
-55-
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that (i) it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
properties, financial and other condition and creditworthiness of the Borrower
and its Subsidiaries and made its own decision to enter into this Agreement and
extend credit to the Borrower hereunder, and (ii) it will, independently and
without reliance upon the Administrative Agent 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 analysis, appraisals and decisions in taking or
not taking action hereunder and under the other Credit Documents and to make
such investigation as it deems necessary to inform itself as to the business,
prospects, operations, properties, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries. Except as expressly
provided in this Agreement and the other Credit Documents, the Administrative
Agent shall have no duty or responsibility, either initially or on a continuing
basis, to provide any Lender with any credit or other information concerning the
business, prospects, operations, properties, financial or other condition or
creditworthiness of the Borrower, its Subsidiaries or any other Person that may
at any time come into the possession of the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
VIII.6. Notice of Default. The Administrative Agent shall not be deemed
-----------------
to have knowledge or notice of the occurrence of any Default or Event of Default
unless the Administrative Agent shall have received written notice from the
Borrower or a Lender referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." In the
event that the Administrative Agent receives such a notice, the Administrative
Agent will give notice thereof to the Lenders as soon as reasonably practicable;
provided, however, that if any such notice has also been furnished to the
-------- -------
Lenders, the Administrative Agent shall have no obligation to notify the Lenders
with respect thereto. The Administrative Agent shall (subject to SECTIONS 9.4
and 10.6) take such action with respect to such Default or Event of Default as
shall reasonably be directed by the Required Lenders; provided that, unless and
--------
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
VIII.7. Indemnification. To the extent the Administrative Agent is not
---------------
reimbursed by or on behalf of the Borrower, and without limiting the obligation
of the Borrower to do so, the Lenders agree (i) to indemnify the Administrative
Agent and its officers, directors, employees, agents, attorneys-in-fact and
Affiliates, ratably in proportion to their respective percentages as used in
determining the Required Lenders as of the date of determination, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including, without limitation,
attorneys' fees and expenses) or disbursements of any kind or nature whatsoever
that may at any time (including at any time following the repayment in full of
the Loans and the termination of the Commitments) be imposed on, incurred by or
asserted against the Administrative Agent in any way relating to or arising out
of this Agreement or any other Credit Document or any documents contemplated by
or referred to herein or the transactions contemplated hereby or thereby or any
action taken or
-56-
omitted by the Administrative Agent under or in connection with any of the
foregoing, and (ii) to reimburse the Administrative Agent upon demand, ratably
in proportion to their respective percentages as used in determining the
Required Lenders as of the date of determination, for any expenses incurred by
the Administrative Agent in connection with the preparation, negotiation,
execution, delivery, administration, amendment, modification, waiver or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
or any of the other Credit Documents (including, without limitation, reasonable
attorneys' fees and expenses and compensation of agents and employees paid for
services rendered on behalf of the Lenders); provided, however, that no Lender
-------- -------
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent resulting from the gross negligence or willful misconduct of the
party to be indemnified.
VIII.8. The Administrative Agent in its Individual Capacity. With respect
---------------------------------------------------
to its Commitments, the Loans made by it and the Note or Notes issued to it, the
Administrative Agent in its individual capacity and not as Administrative Agent
shall have the same rights and powers under the Credit Documents as any other
Lender and may exercise the same as though it were not performing the agency
duties specified herein; and the terms "Lenders," "Required Lenders," "holders
of Notes" and any similar terms shall, unless the context clearly otherwise
indicates, include the Administrative Agent in its individual capacity. The
Administrative Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with the Borrower, any of its Subsidiaries or any of their respective
Affiliates as if the Administrative Agent were not performing the agency duties
specified herein, and may accept fees and other consideration from any of them
for services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.
VIII.9. Successor Administrative Agent. The Administrative Agent may
------------------------------
resign at any time by giving thirty (30) days' prior written notice to the
Borrower and the Lenders. Upon any such notice of resignation, the Required
Lenders will, with the prior written consent of the Borrower (which consent
shall not be unreasonably withheld), appoint from among the Lenders a successor
to the Administrative Agent (provided that the Borrower's consent shall not be
--------
required in the event a Default or Event of Default shall have occurred and be
continuing). If no successor to the Administrative Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within such thirty-day period, then the retiring Administrative Agent may, on
behalf of the Lenders and after consulting with the Lenders and the Borrower,
appoint a successor Administrative Agent from among the Lenders. Upon the
acceptance of any appointment as Administrative Agent by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder and under the
other Credit Documents. After any retiring Administrative Agent's resignation
as Administrative Agent, the provisions of this Article shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent. If no successor to the Administrative Agent has accepted
appointment as Administrative Agent by the thirtieth (30th) day following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless
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thereupon become effective, and the Lenders shall thereafter perform all of the
duties of the Administrative Agent hereunder and under the other Credit
Documents until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided for hereinabove.
VIII.10. Documentation Agent. Notwithstanding any other provision of this
-------------------
Agreement or any of the other Credit Documents, the Documentation Agent is named
as such for recognition purposes only, and in its capacity as such shall have no
powers, rights, duties, responsibilities or liabilities with respect to this
Agreement and the other Credit Documents and the transactions contemplated
hereby and thereby.
ARTICLE IX
MISCELLANEOUS
IX.1. Fees and Expenses. The Borrower agrees (i) whether or not the
-----------------
transactions contemplated by this Agreement shall be consummated, to pay upon
demand all reasonable out-of-pocket costs and expenses of the Administrative
Agent (including, without limitation, the reasonable fees and expenses of
counsel to the Administrative Agent) in connection with the preparation,
negotiation, execution, delivery and syndication of this Agreement and the other
Credit Documents, and any amendment, modification or waiver hereof or thereof or
consent with respect hereto or thereto, (ii) to pay upon demand all reasonable
out-of-pocket costs and expenses of the Administrative Agent and each Lender
(including, without limitation, the reasonable fees and expenses of counsel to
the Administrative Agent or any Lender) in connection with (y) any refinancing
or restructuring of the credit arrangement provided under this Agreement,
whether in the nature of a "work-out," in any insolvency or bankruptcy
proceeding or otherwise and whether or not consummated, and (z) the enforcement,
attempted enforcement or preservation of any rights or remedies under this
Agreement or any of the other Credit Documents, whether in any action, suit or
proceeding (including any bankruptcy or insolvency proceeding) or otherwise, and
(iii) to pay and hold harmless the Administrative Agent and each Lender from and
against all liability for any intangibles, documentary, stamp or other similar
taxes, fees and excises, if any, including any interest and penalties, and any
finder's or brokerage fees, commissions and expenses (other than any fees,
commissions or expenses of finders or brokers engaged by the Administrative
Agent or any Lender), that may be payable in connection with the transactions
contemplated by this Agreement and the other Credit Documents.
IX.2. Indemnification. The Borrower agrees, whether or not the
---------------
transactions contemplated by this Agreement shall be consummated, to indemnify
and hold harmless the Administrative Agent and each Lender and each of their
respective directors, officers, employees, agents and Affiliates (each, an
"Indemnified Person") from and against any and all claims, losses, damages,
obligations, liabilities, penalties, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) of any kind or nature
whatsoever, whether direct, indirect or consequential (collectively,
"Indemnified Costs"), that may at any time be imposed on, incurred by or
asserted against any such Indemnified Person as a result of, arising from or in
any way relating to the preparation, execution, performance or
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enforcement of this Agreement or any of the other Credit Documents, any of the
transactions contemplated herein or therein or any transaction financed or to be
financed in whole or in part, directly or indirectly, with the proceeds of any
Loans, or any action, suit or proceeding (including any inquiry or
investigation) by any Person, whether threatened or initiated, related to any of
the foregoing, and in any case whether or not such Indemnified Person is a party
to any such action, proceeding or suit or a subject of any such inquiry or
investigation; provided, however, that no Indemnified Person shall have the
-------- -------
right to be indemnified hereunder for any Indemnified Costs to the extent
resulting from the gross negligence or willful misconduct of such Indemnified
Person. All of the foregoing Indemnified Costs of any Indemnified Person shall
be paid or reimbursed by the Borrower, as and when incurred and upon demand.
IX.3. Governing Law; Consent to Jurisdiction. THIS AGREEMENT AND THE OTHER
--------------------------------------
CREDIT DOCUMENTS HAVE BEEN EXECUTED, DELIVERED AND ACCEPTED IN, AND SHALL BE
DEEMED TO HAVE BEEN MADE IN, NORTH CAROLINA AND SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA (WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF). THE
BORROWER HEREBY CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE COURT
WITHIN MECKLENBURG COUNTY, NORTH CAROLINA OR ANY FEDERAL COURT LOCATED WITHIN
THE WESTERN DISTRICT OF THE STATE OF NORTH CAROLINA FOR ANY PROCEEDING
INSTITUTED HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS, OR ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, OR
ANY PROCEEDING TO WHICH THE ADMINISTRATIVE AGENT OR ANY LENDER OR THE BORROWER
IS A PARTY, INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN CONNECTION
WITH, ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER OR THE BORROWER.
THE BORROWER IRREVOCABLY AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF
APPEAL) BY ANY JUDGMENT RENDERED OR RELIEF GRANTED THEREBY AND FURTHER WAIVES
ANY OBJECTION THAT IT MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE
OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY SUCH PROCEEDING. NOTHING IN THIS
--------------------
SECTION SHALL AFFECT THE RIGHT OF ANY PARTY TO BRING ANY ACTION OR PROCEEDING
AGAINST ANY OTHER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
The parties hereto agree that this Agreement and the other Credit Documents
have been and will be made and entered into within the State of North Carolina
and that the Loans and the other transactions contemplated hereby and thereby
have been and will be made and consummated in the State of North Carolina.
Furthermore, the parties hereto believe that, inasmuch as this Agreement and the
transactions contemplated hereby have been and will be entered into and
consummated outside the State of Alabama, such transactions constitute
transactions in interstate commerce, so that neither the Administrative Agent
nor any Lender is or will be required, solely by entering into this Agreement
and consummating the transactions contemplated hereby and holding any Note, to
qualify to do business as a foreign corporation within the State of Alabama.
Notwithstanding the foregoing, however, the Borrower hereby irrevocably waives
all rights that it may have to raise, in any action brought by the
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Administrative Agent or any Lender to enforce its rights hereunder, under the
Notes or under any of the other Credit Documents, any defense that is based upon
the failure of the Administrative Agent or any Lender to qualify to do business
as a foreign corporation in the State of Alabama, including, but not limited to,
any defenses based upon (S) 232 of the Alabama Constitution of 1901, (S) 10-2B-
15.02 of the Code of Alabama (1975) or (S) 40-14-4 of the Code of Alabama
(1975), or any successor provisions thereof. The foregoing waiver is made
knowingly and voluntarily and is a material inducement for the Administrative
Agent and the Lenders to enter into this Agreement and to consummate the
transactions contemplated hereby.
IX.4. Arbitration; Preservation and Limitation of Remedies. (a) Upon
----------------------------------------------------
demand of any party hereto, whether made before or after institution of any
judicial proceeding, any dispute, claim or controversy arising out of, connected
with or relating to this Agreement or any other Credit Document ("Disputes")
between or among the Borrower, the Administrative Agent and the Lenders, or any
of them, shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include, without
limitation, tort claims, counterclaims, claims brought as class actions, claims
arising from documents executed in the future, or claims arising out of or
connected with the transactions contemplated by this Agreement and the other
Credit Documents. Arbitration shall be conducted under and governed by the
Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules") of the
American Arbitration Association (the "AAA"), as in effect from time to time,
and Title 9 of the U.S. Code, as amended. All arbitration hearings shall be
conducted in the city in which the principal office of the Administrative Agent
is located. The expedited procedures set forth in Rule 51 et seq. of the
-- ---
Arbitration Rules shall be applicable to claims of less than $1,000,000. All
applicable statutes of limitation shall apply to any Dispute. A judgment upon
the award may be entered in any court having jurisdiction. The panel from which
all arbitrators are selected shall be comprised of licensed attorneys. The
single arbitrator selected for expedited procedure shall be a retired judge from
the highest court of general jurisdiction, state or federal, of the state where
the hearing will be conducted. Notwithstanding the foregoing, this arbitration
provision does not apply to Disputes under or related to Hedge Agreements.
(b) Notwithstanding the preceding binding arbitration provisions, the
parties hereto agree to preserve, without diminution, certain remedies that any
party hereto may employ or exercise freely, either alone, in conjunction with or
during a Dispute. Any party hereto shall have the right to proceed in any court
of proper jurisdiction or by self-help to exercise or prosecute the following
remedies, as applicable: (i) all rights of self-help, including peaceful
occupation of real property and collection of rents, set-off, and peaceful
possession of personal property; (ii) obtaining provisional or ancillary
remedies, including injunctive relief, sequestration, garnishment, attachment,
appointment of a receiver and filing an involuntary bankruptcy proceeding; and
(iii) when applicable, a judgment by confession of judgment. Preservation of
these remedies does not limit the power of an arbitrator to grant similar
remedies that may be requested by a party in a Dispute. The parties hereto
agree that no party shall have a remedy of punitive or exemplary damages against
any other party in any Dispute, and each party hereby waives any right or claim
to punitive or exemplary damages that it has now or that may arise in the future
in connection with any Dispute, whether such Dispute is resolved by arbitration
or judicially.
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IX.5. Notices. All notices and other communications provided for hereunder
-------
shall be in writing (including telegraphic, telex, facsimile transmission or
cable communication) and mailed, telegraphed, telexed, telecopied, cabled or
delivered to the party to be notified at the following addresses:
(a) if to the Borrower, to Vesta Insurance Group, Inc., 0000 Xxxxx
Xxx Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxx,
Telecopy No. (000) 000-0000, with a copy to Vesta Insurance Group, Inc.,
0000 Xxxxx Xxx Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxxxx X.
Xxxxxxxx, Telecopy No. (000) 000-0000;
(b) if to the Administrative Agent, to First Union National Bank of
North Carolina, One First Xxxxx Xxxxxx, XX-00, 000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attention: Syndication Agency
Services, Telecopy No. (000) 000-0000; and
(c) if to any Lender, to it at the address for notices set forth on
its signature page hereto (or if to any Lender not a party hereto as of the
date hereof, at the address for notices set forth in its Assignment and
Acceptance);
or in each case, to such other address as any party may designate for itself by
like notice to all other parties hereto. All such notices and communications
shall be deemed to have been given (i) if mailed as provided above by any method
other than overnight delivery service, on the third Business Day after deposit
in the mails, (ii) if mailed by overnight delivery service, telegraphed,
telexed, telecopied or cabled, when delivered for overnight delivery, delivered
to the telegraph company, confirmed by telex answerback, transmitted by
telecopier or delivered to the cable company, respectively, or (iii) if
delivered by hand, upon delivery; provided that notices and communications to
--------
the Administrative Agent shall not be effective until received by the
Administrative Agent.
IX.6. Amendments, Waivers, etc. No amendment, modification, waiver or
------------------------
discharge or termination of, or consent to any departure by the Borrower from,
any provision of this Agreement or any other Credit Document, shall be effective
unless in a writing signed by the Required Lenders (or by the Administrative
Agent at the direction or with the consent of the Required Lenders), and then
the same shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment,
-------- -------
modification, waiver, discharge, termination or consent shall:
(a) unless agreed to by each Lender holding or owed Obligations directly
affected thereby, (i) reduce or forgive the principal amount of, or rate of
interest on, any Loan, or reduce or forgive any fees or other Obligations (other
than fees payable to the Administrative Agent for its own account), or (ii)
extend any date (including the Facility A Maturity Date or the Facility B
Maturity Date) fixed for the payment of any principal of or interest on any Loan
(other than additional interest payable under SECTION 2.6(B) during the
continuance of an Event of Default), any fees (other than fees payable to the
Administrative Agent for its own account) or any other Obligations;
(b) unless agreed to by all of the Lenders, (i) increase or extend any
Commitment
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of any Lender (it being understood that a waiver of any Event of Default, if
agreed to by the requisite Lenders hereunder, shall not constitute such an
increase or extension), (ii) change the percentage of the aggregate Commitments
or of the aggregate unpaid principal amount of the Loans, or the number or
percentage of Lenders, that shall be required for the Lenders or any of them to
take or approve, or direct the Administrative Agent to take or approve, any
action hereunder (including as set forth in the definition of "Required
Lenders"), or (iii) change any provision of SECTION 2.13 or this SECTION 10.6;
and
(c) unless agreed to by the Administrative Agent in addition to the
Lenders required as provided hereinabove to take such action, affect the rights
or obligations of the Administrative Agent hereunder or under any of the other
Credit Documents;
and provided further that (i) if any amendment, modification, waiver or consent
-------- -------
would adversely affect the holders of Loans of a particular Class (the "affected
Class") relative to holders of Loans of the other Class, then such amendment,
modification, waiver or consent shall require the consent of Lenders holding
more than sixty-six and two-thirds percent (66-2/3%) of the aggregate
outstanding principal amount of all Loans of the affected Class, and (ii) the
Fee Letter and any Hedge Agreement to which any Lender is a party may be amended
or modified, and any rights thereunder waived, in a writing signed by the
parties thereto.
IX.7. Assignments, Participations. (a) Each Lender may assign to one or
---------------------------
more other Eligible Assignees (each, an "Assignee") all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of either of its Commitments, the outstanding Loans made by it and
the Note or Notes held by it); provided, however, that (i) any such assignment
-------- -------
(other than an assignment to a Lender or an Affiliate of a Lender) shall not be
made without the prior written consent of the Administrative Agent and the
Borrower (to be evidenced by their counterexecution of the relevant Assignment
and Acceptance), which consent shall not be unreasonably withheld, (ii) except
in the case of an assignment to a Lender or an Affiliate of a Lender, no such
assignment with regard to either Facility shall be in an aggregate principal
amount (determined as of the date of the Assignment and Acceptance with respect
to each such assignment) less than the lesser of (y) the entire Commitment of
such Lender under such Facility immediately prior to such assignment or (z)
$5,000,000, and (iii) the parties to each such assignment will execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or Notes subject
to such assignment, and will pay a nonrefundable processing fee of $3,000 to the
Administrative Agent for its own account. Upon such execution, delivery,
acceptance and recording of the Assignment and Acceptance, from and after the
effective date specified therein, which effective date shall be at least five
Business Days after the execution thereof (unless the Administrative Agent shall
otherwise agree), (A) the Assignee thereunder shall be a party hereto and, to
the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, shall have the rights and
obligations of the assigning Lender hereunder with respect thereto and (B) the
assigning Lender shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights (other than rights under the provisions of this Agreement and the other
Credit Documents relating to indemnification or payment of fees, costs and
expenses, to the extent such rights relate to the time prior to the effective
date of such Assignment and Acceptance) and be released from its obligations
under
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this Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of such assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto). The terms and
provisions of each Assignment and Acceptance shall, upon the effectiveness
thereof, be incorporated into and made a part of this Agreement, and the
covenants, agreements and obligations of each Lender set forth therein shall be
deemed made to and for the benefit of the Administrative Agent and the other
parties hereto as if set forth at length herein.
(b) The Administrative Agent will maintain at its address for notices
referred to herein a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitments of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower and
each Lender at any reasonable time and from time to time upon reasonable prior
notice.
(c) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an Assignee and counterexecuted by the
Borrower (if required), together with any Note or Notes subject to such
assignment and the processing fee referred to in subsection (a) above, the
Administrative Agent will (i) accept such Assignment and Acceptance, (ii) on the
effective date thereof, record the information contained therein in the Register
and (iii) give notice thereof to the Borrower and the Lenders. Within five (5)
Business Days after its receipt of such notice, the Borrower, at its own
expense, will execute and deliver to the Administrative Agent in exchange for
the surrendered Note or Notes a new Note or Notes to the order of such Assignee
(and, to the extent the assigning Lender has retained any portion of its Loans
and/or Commitments hereunder, to the order of the assigning Lender), prepared in
accordance with the applicable provisions of SECTION 2.3 as necessary to
reflect, after giving effect to the assignment, the Commitments of the Assignee
and (to the extent of any retained interests) the assigning Lender, dated the
date of the replaced Note or Notes and otherwise in substantially the form of
EXHIBITS A-1 and A-2, as applicable. The Administrative Agent will return
cancelled Notes to the Borrower.
(d) Each Lender may, without the consent of the Borrower, the
Administrative Agent or any other Lender, sell to one or more other Persons
(each, a "Participant") participations in any portion comprising less than all
of its rights and obligations under this Agreement (including, without
limitation, a portion of either of its Commitments, the outstanding Loans made
by it and the Note or Notes held by it); provided, however, that (i) such
-------- -------
Lender's obligations under this Agreement shall remain unchanged and such Lender
shall remain solely responsible for the performance of such obligations, (ii)
any such participation shall be in an amount of not less than $3,000,000, but no
Lender shall sell any participation that, when taken together with all other
participations, if any, sold by such Lender, covers all of such Lender's rights
and obligations under this Agreement, (iii) 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 no Lender shall permit any Participant to have any voting rights
or any right
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to control the vote of such Lender with respect to any amendment, modification,
waiver, consent or other action hereunder or under any other Credit Document
(except as to actions that would (x) reduce or forgive the principal amount of,
or rate of interest on, any Loan, or reduce or forgive any fees or other
Obligations, (y) extend any date (including the Facility A Maturity Date or the
Facility B Maturity Date) fixed for the payment of any principal of or interest
on any Loan, any fees or any other Obligations, or (z) increase any Commitment
of any Lender), and (iv) no Participant shall have any rights under this
Agreement or any of the other Credit Documents, each Participant's rights
against the granting Lender in respect of any participation to be those set
forth in the participation agreement, and all amounts payable by the Borrower
hereunder shall be determined as if such Lender had not granted such
participation. Notwithstanding the foregoing, each Participant shall have the
rights of a Lender for purposes of SECTIONS 2.14(A), 2.14(B), 2.15, 2.16 and
8.3, and shall be entitled to the benefits thereto, to the extent that the
Lender granting such participation would be entitled to such benefits if the
participation had not been made, provided that no Participant shall be entitled
--------
to receive any greater amount pursuant to any of such Sections than the Lender
granting such participation would have been entitled to receive in respect of
the amount of the participation made by such Lender to such Participant had such
participation not been made.
(e) Nothing in this Agreement shall be construed to prohibit any Lender
from pledging or assigning all or any portion of its rights and interest
hereunder or under any Note to any Federal Reserve Bank as security for
borrowings therefrom; provided, however, that no such pledge or assignment shall
-------- -------
release a Lender from any of its obligations hereunder.
(f) Assignments and participations pursuant to this SECTION 10.7 need not
be pro rata as among the Facilities.
(g) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section, disclose to the
Assignee or Participant or proposed Assignee or Participant any information
relating to the Borrower and its Subsidiaries furnished to it by or on behalf of
any other party hereto, provided that such Assignee or Participant or proposed
--------
Assignee or Participant agrees in writing to keep such information confidential
to the same extent required of the Lenders under SECTION 10.13.
IX.8. No Waiver. The rights and remedies of the Administrative Agent and
---------
the Lenders expressly set forth in this Agreement and the other Credit Documents
are cumulative and in addition to, and not exclusive of, all other rights and
remedies available at law, in equity or otherwise. No failure or delay on the
part of the Administrative Agent or any Lender in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, power or privilege or be
construed to be a waiver of any Default or Event of Default. No course of
dealing between any of the Borrower and the Administrative Agent or the Lenders
or their agents or employees shall be effective to amend, modify or discharge
any provision of this Agreement or any other Credit Document or to constitute a
waiver of any Default or Event of Default. No notice to or demand upon the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the right
of the Administrative Agent or any Lender to exercise any right or remedy or
take any other or further action in any
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circumstances without notice or demand.
IX.9. Successors and Assigns. This Agreement shall be binding upon, inure
----------------------
to the benefit of and be enforceable by the respective successors and assigns of
the parties hereto, and all references herein to any party shall be deemed to
include its successors and assigns; provided, however, that (i) the Borrower
-------- -------
shall not sell, assign or transfer any of its rights, interests, duties or
obligations under this Agreement or any other Credit Document without the prior
written consent of all of the Lenders and (ii) any Assignees shall have such
rights and obligations with respect to this Agreement and the other Credit
Documents as are provided for under and pursuant to the provisions of SECTION
10.7.
IX.10. Survival. All representations, warranties and agreements made by or
--------
on behalf of the Borrower or any of its Subsidiaries in this Agreement and in
the other Credit Documents shall survive the execution and delivery hereof or
thereof and the making and repayment of the Loans. In addition, notwithstanding
anything herein or under applicable law to the contrary, the provisions of this
Agreement and the other Credit Documents relating to indemnification or payment
of fees, costs and expenses, including, without limitation, the provisions of
SECTIONS 2.14(A), 2.14(B), 2.15, 2.16, 9.7, 10.1 and 10.2, shall survive the
payment in full of the Loans, the termination of the Commitments and any
termination of this Agreement or any of the other Credit Documents.
IX.11. Severability. To the extent any provision of this Agreement is
------------
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
IX.12. Construction. The headings of the various articles, sections and
------------
subsections of this Agreement have been inserted for convenience only and shall
not in any way affect the meaning or construction of any of the provisions
hereof. Except as otherwise expressly provided herein and in the other Credit
Documents, in the event of any inconsistency or conflict between any provision
of this Agreement and any provision of any of the other Credit Documents, the
provision of this Agreement shall control.
IX.13. Confidentiality. Each Lender agrees to keep confidential, pursuant
---------------
to its customary procedures for handling confidential information of a similar
nature and in accordance with safe and sound banking practices, all nonpublic
information provided to it by or on behalf of the Borrower or any of its
Subsidiaries in connection with this Agreement or any other Credit Document;
provided, however, that any Lender may disclose such information (i) to its
-------- -------
directors, employees and agents and to its auditors, counsel and other
professional advisors, (ii) at the demand or request of any bank regulatory
authority, court or other Governmental Authority having or asserting
jurisdiction over such Lender, as may be required pursuant to subpoena or other
legal process, or otherwise in order to comply with any applicable Requirement
of Law, (iii) in connection with any proceeding to enforce its rights hereunder
or under any other Credit Document or any other litigation or proceeding related
hereto or to which it is a party, (iv) to the Administrative Agent or any other
Lender, (v) to the extent the same has become publicly available other than as a
result of a breach of this
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Agreement and (vi) pursuant to and in accordance with the provisions of SECTION
10.7(G).
IX.14. Counterparts. This Agreement may be executed in any number of
------------
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. This Agreement shall
become effective upon the execution of a counterpart hereof by each of the
parties hereto and receipt by the Administrative Agent and the Borrower of
written or telephonic notification of such execution and authorization of
delivery thereof.
IX.15. Entire Agreement. THIS AGREEMENT AND THE OTHER DOCUMENTS AND
----------------
INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION HEREWITH (A) EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND THERETO RELATING TO
THE SUBJECT MATTER HEREOF AND THEREOF, (B) SUPERSEDE ANY AND ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS OF SUCH PERSONS, ORAL OR WRITTEN, RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF, INCLUDING, WITHOUT LIMITATION, THE COMMITMENT
LETTER FROM FIRST UNION TO THE BORROWER DATED MARCH 18, 1997, BUT SPECIFICALLY
EXCLUDING THE FEE LETTER, AND (C) MAY NOT BE AMENDED, SUPPLEMENTED, CONTRADICTED
OR OTHERWISE MODIFIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
IX.16. Effect of Amendment and Restatement. This Agreement amends and
-----------------------------------
restates the Original Credit Agreement in its entirety; provided, however, that
-------- -------
the provisions of the Original Credit Agreement and the other Credit Documents
relating to indemnification or payment of fees, costs and expenses for the
benefit of the Administrative Agent and the Lenders (in each case, as defined in
the Original Credit Agreement), including, without limitation, the provisions of
SECTIONS 2.14(A), 2.14(B), 2.15, 2.16, 9.7, 10.1 and 10.2 of the Original Credit
Agreement, shall survive the effectiveness of this Agreement and the amendment
and restatement of the Original Credit Agreement effected hereby. Upon the
effectiveness of this Agreement, (i) all Existing Loans (if any) shall be deemed
to be Facility A Loans hereunder, shall be evidenced by the Facility A Notes and
shall be entitled to all of the benefits of this Agreement and the other Credit
Documents, and (ii) all other Credit Documents, instruments, certificates,
financial statements and other documents executed or delivered by or on behalf
of the Borrower or any of its Subsidiaries pursuant to the Original Credit
Agreement at any time prior to the effectiveness of this Agreement shall be
deemed to have been executed or delivered pursuant to this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
VESTA INSURANCE GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Title: Vice President - Finance
(signatures continued)
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ADMINISTRATIVE AGENT:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Administrative
Agent and as a Lender
Facility A Commitment: By: /s/ Xxxx X. Xxxxxxxxx
---------------------------------------
$20,000,000
Title: Senior Vice President
Facility B Commitment:
$20,000,000
Instructions for wire transfers to the
Administrative Agent:
First Union National Bank of North
Carolina
ABA Routing Xx. 000000000
Xxxxxxxxx, Xxxxx Xxxxxxxx
General Ledger No. 465906, RC No. 5007
Attention: Syndication Agency Services
Re: Vesta Insurance Group, Inc.
Address for notices (as a Lender):
First Union National Bank of
North Carolina
Financial Institutions Group
Xxx Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx, Xx.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
First Union National Bank of
North Carolina
Financial Institutions Group
Xxx Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx, Xx.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
-00-
XXXXXXXXXXXXX XXXXX:
SOUTHTRUST BANK OF ALABAMA, NATIONAL
ASSOCIATION
Facility A Commitment: By: /s/ W. Xxxxxxx Xxxxxxx
-------------------------------------
$20,000,000
Title: Commercial Loan Officer
Facility B Commitment:
$20,000,000
Address for notices:
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
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OTHER LENDERS:
ABN AMRO BANK N.V., NEW YORK BRANCH
Facility A Commitment: By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
$15,000,000
Title: Vice President
Facility B Commitment:
$15,000,000
By: /s/ Xxxxx X. Xxxxxxxxxx
---------------------------------------
Title: Vice President
Address for notices:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
-70-
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
Facility A Commitment: By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
$15,000,000
Title: Vice President
Facility B Commitment:
$15,000,000
Address for notices:
1251 Avenue of the Americas
00xx Xxxxx, Xxxxxxxx Xxxxxxx Xxxxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
1251 Avenue of the Americas
00xx Xxxxx, Xxxxxxxx Xxxxxxx Xxxxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
-71-
THE FIRST NATIONAL BANK OF CHICAGO
Facility A Commitment: By: /s/ Xxxxxxxxx X. Xxxxxxxx
------------------------------------
$15,000,000
Title: Vice President
Facility B Commitment:
$15,000,000
Address for notices:
Insurance Companies Division
One First Xxxxxxxx Xxxxx, Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
Insurance Companies Division
One First Xxxxxxxx Xxxxx, Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
-00-
XXXXXXXX XXXX XX XXXXXXX, N.A.
Facility A Commitment: By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
$15,000,000
Title: Vice President
Facility B Commitment:
$15,000,000
Address for notices:
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-73-
Exhibit B-1 to Amended and Restated
Credit Agreement
First Union National Bank
of North Carolina, as
Administrative Agent
Vesta Insurance Group, Inc.
April 8, 1997 / $200,000,000
___________________________________
FORM OF
NOTICE OF BORROWING
[Date]
First Union National Bank of
North Carolina, as
Administrative Agent
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, Vesta Insurance Group, Inc. (the "Borrower"), refers
to the Amended and Restated Credit Agreement, dated as of April 8, 1997, among
the Borrower, certain banks and other financial institutions from time to time
parties thereto (the "Lenders"), SouthTrust Bank of Alabama, National
Association, as Documentation Agent, and you, as Administrative Agent for the
Lenders (as amended, modified or supplemented from time to time, the "Credit
Agreement," the terms defined therein being used herein as therein defined),
and, pursuant to SECTION 2.2(B) of the Credit Agreement, hereby gives you, as
Administrative Agent, irrevocable notice that the Borrower requests a Borrowing
under the Credit Agreement, and to that end sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by SECTION
2.2(B) of the Credit Agreement:
(i) The aggregate principal amount of the Proposed Borrowing is
$_______________./1/
(ii) The Loans comprising the Proposed Borrowing shall be
[Facility A Loans] [Facility B Loans] and shall be initially made as
[Base Rate Loans] [LIBOR Loans]./2/
_______________________
/1/Shall be an amount not less than $1,000,000 or, if greater, an integral
multiple of $500,000 in excess thereof (in the case of Base Rate Loans), or
$3,000,000 or, if greater, an integral multiple of $1,000,000 in excess thereof
(in the case of LIBOR Loans).
/2/Select the applicable Class and Type of Loans.
(iii) The Proposed Borrowing is requested to be made on
______________ (the "Borrowing Date")./3/
[(iv) The initial Interest Period for the LIBOR Loans comprising
the Proposed Borrowing shall be [one/two/three months].]/4/
[(v) The Borrower's senior unsecured long-term publicly traded
Indebtedness without third party credit enhancement is presently rated
_______ by Xxxxx'x and _______ by Standard & Poor's, and as a result
of such ratings the Margin Percentage initially applicable to the
LIBOR Loans comprising the Proposed Borrowing shall be _____%.]/5/
The Borrower hereby certifies that the following statements are true
on and as of the date hereof and will be true on and as of the Borrowing Date:
(A) Each of the representations and warranties contained in
ARTICLE IV of the Credit Agreement and in the other Credit Documents is and
will be true and correct on and as of each such date, with the same effect
as if made on and as of each such date, both immediately before and after
giving effect to the Proposed Borrowing and to the application of the
proceeds therefrom (except to the extent any such representation or
warranty is expressly stated to have been made as of a specific date, in
which case such representation or warranty shall be true and correct as of
such date);
(B) No Default or Event of Default has occurred and is
continuing or would result from the Proposed Borrowing or from the
application of the proceeds therefrom; and
(C) After giving effect to the Proposed Borrowing, the
aggregate principal amount of Facility A Loans outstanding will not exceed
the aggregate Facility A Commitments and the aggregate principal amount of
Facility B Loans outstanding will not exceed the aggregate Facility B
Commitments.
Very truly yours,
VESTA INSURANCE GROUP, INC.
By: ______________________________________
Title: ___________________________________
________________________
/3/Shall be a Business Day at least one Business Day after the date hereof
(in the case of Base Rate Loans) or at least three Business Days after the date
hereof (in the case of LIBOR Loans).
/4/Include this clause in the case of a Proposed Borrowing comprised of
LIBOR Loans, and select the applicable Interest Period.
/5/Include this clause in the case of a Proposed Borrowing comprised of
LIBOR Loans, and insert the applicable ratings and the applicable Margin
Percentage as set forth in the table contained in the definition of "Margin
Percentage" in the Credit Agreement.
-2-
Exhibit B-2 to Amended and Restated
Credit Agreement
First Union National Bank
of North Carolina, as
Administrative Agent
Vesta Insurance Group, Inc.
April 8, 1997 / $200,000,000
___________________________________
FORM OF
NOTICE OF CONVERSION/CONTINUATION
[Date]
First Union National Bank of
North Carolina, as
Administrative Agent
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, Vesta Insurance Group, Inc. (the "Borrower"), refers
to the Amended and Restated Credit Agreement, dated as of April 8, 1997, among
the Borrower, certain banks and other financial institutions from time to time
parties thereto (the "Lenders"), SouthTrust Bank of Alabama, National
Association, as Documentation Agent, and you, as Administrative Agent for the
Lenders (as amended, modified or supplemented from time to time, the "Credit
Agreement," the terms defined therein being used herein as therein defined),
and, pursuant to SECTION 2.9(B) of the Credit Agreement, hereby gives you, as
Administrative Agent, irrevocable notice that the Borrower requests a
[conversion] [continuation]/"/ of Loans under the Credit Agreement, and to that
end sets forth below the information relating to such [conversion]
[continuation] (the "Proposed [Conversion] [Continuation]") as required by
SECTION 2.9(B) of the Credit Agreement:
____________________
/6/Insert "conversion" or "continuation" throughout the notice, as
applicable.
(i) The Proposed [Conversion] [Continuation] is requested to be
made on _______________./7/
_____________________
/7/Shall be a Business Day at least one Business Day after the date hereof
(in the case of any conversion of LIBOR Loans into Base Rate Loans) or at least
three Business Days after the date hereof (in the case of any conversion of Base
Rate Loans into, or continuation of, LIBOR Loans), and additionally, in the case
of any conversion of LIBOR Loans into Base Rate Loans, or continuation of LIBOR
Loans, shall be the last day of the Interest Period applicable to such LIBOR
Loans.
-2-
(ii) The Proposed [Conversion] [Continuation] involves
$____________/8/ in aggregate principal amount of [Facility A Loans]
[Facility B Loans]/9/ made pursuant to a Borrowing on
________________,/10/ which Loans are presently maintained as [Base
Rate] [LIBOR] Loans and are proposed hereby to be [converted into Base
Rate Loans] [converted into LIBOR Loans] [continued as LIBOR
Loans]./11/
[(iii) The initial Interest Period for the Loans being [converted
into] [continued as] LIBOR Loans pursuant to the Proposed [Conversion]
[Continuation] shall be [one/two/three months].]/12/
[(iv) The Borrower's senior unsecured long-term publicly traded
Indebtedness without third party credit enhancement is presently rated
_______ by Xxxxx'x and _______ by Standard & Poor's, and as a result
of such ratings the Margin Percentage initially applicable to the
Loans being [converted into] [continued as] LIBOR Loans pursuant to
the Proposed [Conversion] [Continuation] shall be _____%.]/13/
The Borrower hereby certifies that the following statement is true both on
and as of the date hereof and will be true on and as of the effective date of
the Proposed [Conversion] [Continuation]: no Default or Event of Default has
occurred and is continuing or would result from the Proposed [Conversion]
[Continuation].
Very truly yours,
VESTA INSURANCE GROUP, INC.
By: ______________________________
____________________
/8/Shall be an amount not less than $1,000,000 or, if greater, an integral
multiple of $500,000 in excess thereof (in the case of any conversion of LIBOR
Loans into Base Rate Loans) or $3,000,000 or, if greater, an integral multiple
of $1,000,000 in excess thereof (in the case of any conversion of Base Rate
Loans into, or continuation of, LIBOR Loans).
/9/Select the applicable Class of Loans.
/10/Insert the applicable Borrowing Date for the Loans being converted or
continued.
/11Complete with the applicable bracketed language.
/12/Include this clause in the case of a Proposed Conversion or
Continuation involving a conversion of Base Rate Loans into, or continuation of,
LIBOR Loans, and select the applicable Interest Period.
/13/Include this clause in the case of a Proposed Conversion or
Continuation involving a conversion of Base Rate Loans into, or continuation of,
LIBOR Loans, and insert the applicable ratings and the applicable Margin
Percentage as set forth in the table contained in the definition of "Margin
Percentage" in the Credit Agreement.
-3-
Title: _____________________________
-4-
Exhibit C to Amended and Restated
Credit Agreement
First Union National Bank
of North Carolina, as
Administrative Agent
Vesta Insurance Group, Inc.
April 8, 1997 / $200,000,000
______________________________
FORM OF
ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE (this "Assignment and Acceptance") is made
this _____ day of ____________, ____, by and between _________________________
(the "Assignor") and __________________________ (the "Assignee"). Reference is
made to the Amended and Restated Credit Agreement, dated as of April 8, 1997 (as
amended, modified or supplemented from time to time, the "Credit Agreement"),
among Vesta Insurance Group, Inc. (the "Borrower"), certain banks and other
financial institutions from time to time parties thereto (the "Lenders"),
SouthTrust Bank of Alabama, National Association, as Documentation Agent, and
First Union National Bank of North Carolina, as Administrative Agent for the
Lenders (the "Administrative Agent"). Unless otherwise defined herein,
capitalized terms used herein without definition shall have the meanings given
to them in the Credit Agreement.
The Assignor and the Assignee hereby agree as follows:
1. Assignment and Assumption. Subject to the terms and conditions hereof,
-------------------------
the Assignor hereby sells and assigns to the Assignee, and the Assignee hereby
purchases and assumes from the Assignor, without recourse to the Assignor and,
except as expressly provided herein, without representation or warranty by the
Assignor, the interest or interests as of the Effective Date (as hereinafter
defined) in and to all of the Assignor's rights and obligations under the Credit
Agreement and the other Credit Documents (in its capacity as a Lender
thereunder) with respect to each Class of Loans represented by the percentage
interest or interests specified with regard to such Class in Item 4(a) of Annex
--------- -----
I (each such assigned interest, an "Assigned Share"), including, without
-
limitation, (i) in the case of Facility A Loans, the relevant Assigned Share of
all rights and obligations of the Assignor with respect to its Facility A
Commitment and its outstanding Facility A Loans, and (ii) in the case of
Facility B Loans, the relevant Assigned Share of all rights and obligations of
the Assignor with respect to its Facility B Commitment and its outstanding
Facility B Loans.
2. The Assignor. The Assignor (i) represents and warrants that it is the
------------
legal and beneficial owner of each interest being assigned by it hereunder, that
each such interest is free and clear of any adverse claim, that as of the date
hereof the amount of its Commitments and outstanding Loans of each Class with
regard to which an interest is being assigned hereunder is as set forth in Item
----
4 of Annex I, and that after giving effect to the assignment provided for herein
- -------
the respective Commitments of the Assignor and the Assignee to provide Loans of
such Class will be as set forth in Item 4(a) of Annex I, (ii) except as set
--------- -------
forth in clause (i) above, 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, any other Credit Document or
any other instrument or document furnished pursuant thereto or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Agreement, any other Credit Document or any other instrument or document
furnished
pursuant thereto, and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any of
its Subsidiaries or the performance or observance by the Borrower or any of its
Subsidiaries of any of their respective obligations under the Credit Agreement,
any other Credit Document or any other instrument or document furnished pursuant
thereto.
3. The Assignee. The Assignee (i) represents and warrants that it is
------------
legally authorized to enter into this Assignment and Acceptance, (ii) confirms
that it has received a copy of the Credit Agreement, together with copies of the
financial statements most recently required to have been delivered under SECTION
5.1 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 Assignment and Acceptance, (iii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Assignor or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement, (iv) confirms that it is an Eligible
Assignee, (v) appoints and authorizes the Administrative Agent to take such
actions as agent on its behalf under the Credit Agreement and the other Credit
Documents, and to exercise such powers and to perform such duties, as are
specifically delegated to the Administrative Agent by the terms thereof,
together with such other powers and duties as are reasonably incidental thereto,
and (vi) agrees that it will perform in accordance with their respective terms
all of the obligations that by the terms of the Credit Agreement are required to
be performed by it as a Lender. [To the extent legally entitled to do so, the
Assignee will deliver to the Administrative Agent, as and when required to be
delivered under the Credit Agreement, duly completed and executed originals of
the applicable tax withholding forms described in SECTION 2.15(D) of the Credit
Agreement]./3/
4. Effective Date. Following the execution of this Assignment and
--------------
Acceptance by the Assignor and the Assignee, an executed original hereof,
together with all attachments hereto, shall be delivered to each of the
Administrative Agent and the Borrower (and also to the Administrative Agent, the
processing fee referred to in SECTION 10.7(A) of the Credit Agreement). The
effective date of this Assignment and Acceptance (the "Effective Date") shall be
the earlier of (i) the date of acceptance hereof by the Administrative Agent and
the Borrower or (ii) the date, if any, designated as the Effective Date in Item
----
5 of Annex I (which date shall be not less than five (5) Business Days after the
- -------
date of execution hereof by the Assignor and the Assignee). As of the Effective
Date, (y) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, shall have the rights and
obligations of a Lender thereunder and under the other Credit Documents, and (z)
the Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights (other than rights under the provisions of the Credit
Agreement and the other Credit Documents relating to indemnification or payment
of fees, costs and expenses, to the extent such rights relate to the time prior
to the Effective Date) and be released from its obligations under the Credit
Agreement and the other Credit Documents.
5. Payments; Settlement. On or prior to the Effective Date, in
--------------------
consideration of the
__________________
/3/Insert if the Assignee is organized under the laws of a jurisdiction outside
the United States.
-2-
sale and assignment provided for herein and as a condition to the effectiveness
of this Assignment and Acceptance, the Assignee will pay to the Assignor an
amount (to be confirmed between the Assignor and the Assignee) that represents
the Assigned Share of the principal amount of the Loans of each relevant Class
made by the Assignor and outstanding on the Effective Date (together, if and to
the extent the Assignor and the Assignee so elect, with the Assigned Share of
any related accrued but unpaid interest, fees and other amounts). From and after
the Effective Date, the Administrative Agent will make all payments required to
be made by it under the Credit Agreement in respect of each interest assigned
hereunder (including, without limitation, all payments of principal, interest
and fees in respect of the Assigned Share of the Assignor's Commitments and
Loans assigned hereunder) directly to the Assignee. The Assignor and the
Assignee shall be responsible for making between themselves all appropriate
adjustments in payments due under the Credit Agreement in respect of the period
prior to the Effective Date. All payments required to be made hereunder or in
connection herewith shall be made in Dollars by wire transfer of immediately
available funds to the appropriate party at its address for payments designated
in Annex I.
-------
6. Governing Law. This Assignment and Acceptance shall be governed by,
-------------
and construed in accordance with, the internal laws of the State of North
Carolina (without regard to the conflicts of laws principles thereof).
7. Entire Agreement. This Assignment and Acceptance, together with the
----------------
Credit Agreement and the other Credit Documents, embody the entire agreement and
understanding between the parties hereto and supersede all prior agreements and
understandings of the parties, verbal or written, relating to the subject matter
hereof.
8. Successors and Assigns. This Assignment and Acceptance shall be
----------------------
binding upon, inure to the benefit of and be enforceable by the parties hereto
and their respective successors and assigns.
9. Counterparts. This Assignment and Acceptance may be executed in any
------------
number of counterparts and by different parties hereto on separate counterparts,
each of which, when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
-3-
IN WITNESS WHEREOF, the parties have caused this Assignment and Acceptance
to be executed by their duly authorized officers as of the date first above
written.
ASSIGNOR:
________________________________
By: ____________________________
Title: _________________________
ASSIGNEE:
________________________________
By: ____________________________
Title: _________________________
Accepted this _______ day of
______________, 19___:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as
Administrative Agent
By: ________________________________
Title: _____________________________
Consented and agreed to:
VESTA INSURANCE GROUP, INC.
By: ________________________________
Title: _____________________________
-4-
ANNEX I
-------
1. Borrower: Vesta Insurance Group, Inc.
2. Name and Date of Credit Agreement:
Amended and Restated Credit Agreement, dated as of April 8, 1997, among
Vesta Insurance Group, Inc., certain Lenders from time to time parties
thereto, SouthTrust Bank of Alabama, National Association, as Documentation
Agent, and First Union National Bank of North Carolina, as Administrative
Agent.
3. Date of Assignment and Acceptance: ________________, 19___.
4. Amounts:
Amount of
Aggregate for Assigned Assigned
Assignor Share /4/ Share
---------- --------- -------
(a) Facility A Commitment $___________ _____% $__________
(b) Facility A Loans/5/ $___________ _____% $__________
(c) Facility B Commitment $___________ _____% $__________
(b) Facility A Loans/6/ $___________ _____% $__________
5. Effective Date: ________________________/7/
6. Addresses for Payments:
Assignor: _________________________________
_________________________________
_________________________________
Attention: ______________________
Telephone: ______________________
Telecopy: _______________________
____________________
/4/Percentage taken to up to ten decimal places, if necessary.
/5/Insert outstanding amounts as of the date of the Assignment and
Acceptance.
/6/Insert outstanding amounts as of the date of the Assignment and
Acceptance.
/7/Shall be a date not less than five Business Days after the date of the
Assignment and Acceptance.
Reference: ______________________
Assignee: _________________________________
_________________________________
_________________________________
Attention: ______________________
Telephone: ______________________
Telecopy: _______________________
Reference: ______________________
7. Addresses for Notices:
Assignor: _________________________________
_________________________________
_________________________________
Attention: ______________________
Telephone: ______________________
Telecopy: _______________________
Assignee: _________________________________
_________________________________
_________________________________
Attention: ______________________
Telephone: ______________________
Telecopy: _______________________
8. Lending Office of Assignee:
_________________________________
_________________________________
_________________________________
Attention: ______________________
Telephone: ______________________
Telecopy: _______________________
Exhibit D-1 to Amended and Restated
Credit Agreement
First Union National Bank
of North Carolina, as
Administrative Agent
Vesta Insurance Group, Inc.
April 8, 1997 / $200,000,000
_________________________________
FORM OF
COMPLIANCE CERTIFICATE
(GAAP Financial Statements)
THIS CERTIFICATE is given pursuant to SECTION 5.3(A) of the Amended and
Restated Credit Agreement, dated as of April 8, 1997 (as amended, modified or
supplemented from time to time, the "Credit Agreement," the terms defined
therein being used herein as therein defined), among Vesta Insurance Group, Inc.
(the "Borrower"), certain banks and other financial institutions from time to
time parties thereto (the "Lenders"), SouthTrust Bank of Alabama, National
Association, as Documentation Agent, and First Union National Bank of North
Carolina, as Administrative Agent for the Lenders.
The undersigned hereby certifies that:
1. He is the duly elected [Chief Financial Officer] [Vice President-
Finance] [Treasurer] of the Borrower./1/
2. Enclosed with this Certificate are copies of the financial statements
of the Borrower and its Subsidiaries as of _____________, and for the [________-
month period] [year] then ended, required to be delivered under SECTION
[5.1(A)][5.1(B)] of the Credit Agreement. Such financial statements have been
prepared in accordance with Generally Accepted Accounting Principles [(subject
to the absence of notes required by Generally Accepted Accounting Principles and
subject to normal year-end audit adjustments)]/2/ and fairly present the
financial condition of the Borrower and its Subsidiaries on a consolidated basis
as of the date indicated and the results of operation of the Borrower and its
Subsidiaries on a consolidated basis for the period covered thereby.
3. The undersigned has reviewed the terms of the Credit Agreement and has
made, or caused to be made under the supervision of the undersigned, a review in
reasonable detail of the transactions and condition of the Borrower and its
Subsidiaries during the accounting period covered by such financial statements.
4. The examination described in paragraph 3 above did not disclose, and
the undersigned has no knowledge of the existence of, any Default or Event of
Default during or at the end of the accounting period covered by such financial
statements or as of the date of this Certificate. [, except as set forth below.
________________
/1/ Insert applicable bracketed language throughout the Certificate.
/2/ Insert in the case of quarterly financial statements.
Describe here or in a separate attachment any exceptions to paragraph 4
above by listing, in reasonable detail, the nature of the Default or Event of
Default, the period during which it existed and the action that the Borrower has
taken or proposes to take with respect thereto.]
5. Attached to this Certificate as Attachment A is a covenant compliance
worksheet reflecting the computation of the financial covenants set forth in
SECTIONS 6.1, 6.2 and 6.3 of the Credit Agreement as of the last day of the
period covered by the financial statements enclosed herewith.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the _______ day of _____________, ____.
VESTA INSURANCE GROUP, INC.
By: [signature of officer]
--------------------------------
Name: ______________________________
Title: _____________________________
ATTACHMENT A
COVENANT COMPLIANCE WORKSHEET
(GAAP Financial Statements)
--------------------------------------------------------------------------------
CAPITALIZATION RATIO
(SECTION 6.1 OF THE CREDIT AGREEMENT): NOT GREATER THAN 0.425 TO 1.0
--------------------------------------------------------------------------------
(1) Consolidated Indebtedness as of
the measurement date $==========
(2) Capitalization:
(a) Consolidated Indebtedness as of
the measurement date (from Line 1) $_________
(b) Consolidated Net Worth as of
the measurement date $_________
(c) Capitalization: Add Lines 2(a)
and 2(b) $==========
(3) Ratio of Consolidated Indebtedness
to Total Capitalization:
Divide Line 1 by Line 2(c)
: 1.0
==========
--------------------------------------------------------------------------------
-------------------------------------------------------------------------------
CONSOLIDATED NET WORTH
(SECTION 6.2 OF THE CREDIT AGREEMENT): NOT LESS THAN THE FOLLOWING:
-------------------------------------------------------------------------------
(1) Base for calculating Consolidated
Net Worth $350,000,000/3/
===========
(2) Consolidated Net Income for each
fiscal quarter (if positive) ending
after September 30, 1996 $_________
Multiplied by: 50%
Equals: Net income adjustment $==========
(3) Aggregate of all amounts paid by
the Borrower as dividends or distributions
in respect of its equity securities at any
time after September 30, 1996 up to and including
the last day of the fiscal quarter then ending ($==========)
(4) Required Consolidated Net Worth:
Add Lines 1 and 2 and subtract Line 3
$==========
(5) Actual Consolidated Net Worth as
of measurement date $==========
--------------------------------------------------------------------------------
_______________
/3/ $250,000,000 for the fiscal quarter ended December 31, 1996.
-------------------------------------------------------------------------------
FIXED CHARGE COVERAGE RATIO
(SECTION 6.3 OF THE CREDIT AGREEMENT): NOT LESS THAN 3.0 TO 1.0
-------------------------------------------------------------------------------
(1) Consolidated earnings before
interest and taxes for the
four-quarter period ending on
the date of determination (the
"Measurement Period"):
(a) Consolidated Net Income of the
Borrower and its Subsidiaries
for the Measurement Period $_______
(b) Consolidated Interest Expense for
the Measurement Period (to the extent
taken into account in the determination
of Consolidated Net Income) $_______
(c) Federal, state, local and other
income taxes paid or accrued by
the Borrower and its Subsidiaries
during the Measurement Period
(to the extent taken into account in the
determination of Consolidated Net Income) $_______
(d) Consolidated earnings before
interest and taxes:
Add Lines 1(a), 1(b) and 1(c) $=======
(2) Fixed Charges:
(a) Consolidated Interest Expense for
the Measurement Period $_______
(b) Aggregate amount of all dividends
and distributions made by the Borrower
in respect of its equity securities
during the Measurement Period $_______
(c) Aggregate amount of all amounts
paid by the Borrower to purchase,
redeem, retire or acquire
its equity securities during the
Measurement Period
(other than pursuant to employee
benefit plans) $_______
Minus lesser of:/4/
-----
25% of Consolidated Net Income ($_______)
5% of Consolidated Net Worth ($_______)
Equals: Repurchase adjustment $________
(d) Fixed Charges:
Add Lines 2(a), 2(b) and 2(c) $========
(3) Fixed Charge Coverage Ratio:
Divide Line 1(d) by Line 2(d) :1.0
========
(4) Amounts available for dividends
from Insurance Subsidiaries
in respect of the Measurement Period $_______
(5) Aggregate (without duplication) of
all scheduled principal and interest
in respect of Indebtedness paid or
accrued by the Borrower and its
Subsidiaries during the Measurement Period $_______
--------------------------------------------------------------------------------
_________
/4/ Insert the lesser of these two items, determined as of and for the
---
Measurement Period.
Exhibit D-2 to Amended and Restated
Credit Agreement
First Union National Bank
of North Carolina, as
Administrative Agent
Vesta Insurance Group, Inc.
April 8, 1997 / $200,000,000
_________________________________
FORM OF
COMPLIANCE CERTIFICATE
(Statutory Financial Statements)
THIS CERTIFICATE is given pursuant to SECTION 5.3(A) of the Amended and
Restated Credit Agreement, dated as of April 8, 1997 (as amended, modified or
supplemented from time to time, the "Credit Agreement," the terms defined
therein being used herein as therein defined), among Vesta Insurance Group, Inc.
(the "Borrower"), certain banks and other financial institutions from time to
time parties thereto (the "Lenders"), SouthTrust Bank of Alabama, National
Association, as Documentation Agent, and First Union National Bank of North
Carolina, as Administrative Agent for the Lenders.
The undersigned hereby certifies that:
1. He is the duly elected [Chief Financial Officer] [Vice President-
Finance] [Treasurer] of the Borrower./5/
2. Enclosed with this Certificate are copies of the financial statements
of the Borrower and its Subsidiaries as of _____________, and for the [________-
month period] [year] then ended, required to be delivered under SECTION
[5.2(A)][5.2(B)] of the Credit Agreement. Such financial statements have been
prepared in accordance with Statutory Accounting Principles and fairly present
the financial condition of the Borrower and its Subsidiaries on a consolidated
basis as of the date indicated and the results of operation of the Borrower and
its Subsidiaries on a consolidated basis for the period covered thereby.
3. Attached to this Certificate as Attachment A is a covenant compliance
worksheet reflecting the computation of the financial covenant set forth in
SECTION 6.4 of the Credit Agreement as of the last day of the period covered by
the financial statements enclosed herewith.
______________
/5/ Insert applicable bracketed language throughout the Certificate.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the _______ day of _____________, ____.
VESTA INSURANCE GROUP, INC.
By: [signature of officer]
--------------------------------
Name: ______________________________
Title: _____________________________
ATTACHMENT A
COVENANT COMPLIANCE WORKSHEET
(Statutory Financial Statements)
-------------------------------------------------------------------------------
RISK-BASED CAPITAL NOT LESS THAN 150% OF APPLICABLE
(SECTION 6.4 OF THE CREDIT AGREEMENT): COMPANY ACTION LEVEL RBC
-------------------------------------------------------------------------------
(1) Total adjusted capital of VFIC as
of the measurement date $_________
(2) Company Action Level RBC as of the
measurement date $_________
(3) Required total adjusted capital as
of the measurement date:
Multiply Line 1(b) by 150% $_________
--------------------------------------------------------------------------------
Schedule 4.7
Subsidiaries
Percentage owned
(directly or
indirectly)
Subsidiary Direct Owner by Borrower
---------- ------------ ------------
The Hawaiian Insurance & Guaranty
Company, Limited Vesta Fire Insurance Corporation 100%
J. Xxxxxx Xxxxxx, Inc. Vesta Insurance Group, Inc. 100%
J. Xxxxxx Xxxxxx of
Texas, Inc. Vesta Fire Insurance Corporation 100%
Liberty National Reinsurance
Company, Ltd. Vesta Insurance Group, Inc. 100%
Sheffield Insurance Corporation Vesta Fire Insurance Corporation 100%
Vesta Capital Trust I Vesta Insurance Group, Inc. 100%
Vesta Financial Corporation Vesta Fire Insurance Corporation 100%
Vesta Fire Insurance Company Vesta Insurance Group, Inc. 100%
Vesta Insurance Corporation Vesta Fire Insurance Corporation 100%
Vesta Lloyds Insurance Company Vesta Fire Insurance Corporation 100%
Vesta Management Corporation of Texas Vesta Insurance Group, Inc. 100%
Vesta County Mutual Vesta Management Corporation
Insurance Company of Texas (control pursuant to 100%
management contract)
Schedule 7.3
Liens
1. $6.6 million lien on corporate aircraft with Michigan National Bank.
