EXHIBIT 4
$45,000,000
CREDIT AGREEMENT
AMONG
AMERICAN MEDICAL SECURITY GROUP, INC.
as Borrower,
THE LENDERS NAMED HEREIN
and
LASALLE BANK NATIONAL ASSOCIATION,
as Agent and Swing Line Lender
DATED AS OF
March 24, 2000
TABLE OF CONTENTS
Page
I. DEFINITIONS...........................................................6
II. THE CREDITS..........................................................22
2.1. Commitment..................................................22
2.2. Required Payments; Termination..............................23
2.3. Ratable Loans...............................................23
2.4. Types of Advances...........................................23
2.5. Facility Fee; Reductions in Aggregate Commitment............23
2.6. Minimum Amount of Each Advance..............................23
2.7. Optional Principal Payments.................................23
2.8. Mandatory Commitment Reductions.............................24
2.9. Method of Selecting Types and Interest Periods
for New Advances..........................................24
2.10. Conversion and Continuation of Outstanding Advances.........25
2.11. The Swing Line Loans........................................26
2.12. Procedure for Swing Line Loans..............................26
2.13. Changes in Interest Rate, etc...............................28
2.14. Rates Applicable After Default..............................28
2.15. Method of Payment...........................................29
2.16. Noteless Agreement; Evidence of Indebtedness................29
2.17. Telephonic Notices..........................................29
2.18. Interest Payment Dates; Interest and Fee Basis..............30
2.19. Notification of Advances, Interest Rates, Prepayments
and Commitment Reductions.................................30
2.20. Lending Installations.......................................30
2.21. Non-Receipt of Funds by the Agent...........................30
III. YIELD PROTECTION; TAXES..............................................31
3.1. Yield Protection............................................31
3.2. Changes in Capital Adequacy Regulations.....................31
3.3. Availability of Types of Advances...........................32
3.4. Funding Indemnification.....................................32
3.5. Taxes.......................................................32
3.6. Lender Statements; Survival of Indemnity....................34
3.7. Substitution of Lender......................................34
IV. CONDITIONS PRECEDENT.................................................35
4.1. Effectiveness...............................................35
4.2. Each Advance and Swing Line Loan............................37
V. REPRESENTATIONS AND WARRANTIES.......................................38
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5.1. Existence and Standing......................................38
5.2. Authorization and Validity..................................38
5.3. No Conflict; Government Consent.............................38
5.4. Financial Statements........................................39
5.5. Material Adverse Change.....................................39
5.6. Taxes.......................................................39
5.7. Litigation and Contingent Obligations.......................39
5.8. Subsidiaries................................................40
5.9. ERISA.......................................................40
5.10. Accuracy of Information.....................................40
5.11. Federal Reserve Regulations.................................40
5.12. Material Agreements.........................................40
5.13. Compliance With Laws........................................40
5.14. Ownership of Properties.....................................41
5.15. Plan Assets; Prohibited Transactions........................41
5.16. Environmental Matters.......................................41
5.17. Investment Company Act......................................41
5.18. Public Utility Holding Company Act..........................41
5.19. Insurance...................................................41
5.20. Solvency....................................................41
5.21. Year 2000...................................................42
5.22. Insurance Licenses..........................................42
5.23. Reinsurance.................................................42
5.24. Reserves....................................................43
5.25. UWLIC Capital and Surplus...................................43
5.26. Defaults....................................................43
5.27. Certain Fees................................................43
5.28. Indebtedness................................................43
5.29. Employee Controversies......................................43
5.30. Dividends...................................................43
5.31. Security....................................................44
VI. COVENANTS............................................................44
6.1. Financial Reporting.........................................44
6.2. Use of Proceeds.............................................47
6.3. Notice of Default...........................................47
6.4. Conduct of Business.........................................47
6.5. Taxes.......................................................48
6.6. Insurance...................................................48
6.7. Compliance with Laws........................................48
6.8. Maintenance of Properties...................................48
6.9. Inspection..................................................48
6.10. Dividends...................................................49
6.11. Indebtedness................................................49
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6.12. Merger......................................................49
6.13. Sale of Assets..............................................50
6.14. Investments and Acquisitions................................50
6.15. Liens.......................................................52
6.16. Affiliates..................................................53
6.17. Other Indebtedness..........................................53
6.18 Contingent Obligations......................................53
6.19. Financial Covenants.........................................54
6.19.1. Fixed Charge Coverage Ratio......................54
6.19.2. Interest Coverage Ratio..........................54
6.19.3. Leverage Ratio...................................54
6.19.4. Consolidated Net Worth...........................54
6.19.5. Statutory Capital and Surplus....................54
6.19.6. Risk-Based Capital...............................54
6.20. Year 2000...................................................55
6.21. Reinsurance.................................................55
6.22. Tax Consolidation...........................................55
6.23. ERISA Compliance............................................55
6.24. Environmental Matters.......................................56
6.25. Change in Corporate Structure; Fiscal Year..................56
6.26. Inconsistent Agreements.....................................56
6.27. Capital Expenditures........................................56
6.27. Capital Expenditures........................................57
VII. DEFAULTS 57
VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES.......................59
8.1. Acceleration................................................59
8.2. Amendments..................................................60
8.3. Preservation of Rights......................................60
IX. GENERAL PROVISIONS...................................................61
9.1. Survival of Representations.................................61
9.2. Governmental Regulation.....................................61
9.3. Headings....................................................61
9.4. Entire Agreement............................................61
9.5. Several Obligations; Benefits of this Agreement.............61
9.6. Expenses; Indemnification...................................61
9.7. Numbers of Documents........................................62
9.8. Accounting..................................................62
9.9. Severability of Provisions..................................62
9.10. Nonliability of Lenders.....................................62
9.11. Confidentiality.............................................62
9.12. Nonreliance.................................................63
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9.13. Disclosure..................................................63
X. THE AGENT............................................................63
10.1. Appointment; Nature of Relationship.........................63
10.2. Powers......................................................63
10.3. General Immunity............................................64
10.4. No Responsibility for Loans, Recitals, etc..................64
10.5. Action on Instructions of Lenders...........................64
10.6. Employment of Agents and Counsel............................64
10.7. Reliance on Documents; Counsel..............................65
10.8. Agent's Reimbursement and Indemnification...................65
10.9. Notice of Default...........................................65
10.10. Rights as a Lender..........................................65
10.11. Lender Credit Decision......................................66
10.12. Successor Agent.............................................66
10.13. Agent's Fee.................................................66
10.14. Delegation to Affiliates....................................66
XI SETOFF; RATABLE PAYMENTS.............................................67
11.1. Setoff......................................................67
11.2. Ratable Payments............................................67
XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS....................67
12.1. Successors and Assigns......................................67
12.2. Participations..............................................68
12.2.1. Permitted Participants; Effect...................68
12.2.2. Voting Rights....................................68
12.2.3. Benefit of Setoff................................68
12.3. Assignments.................................................69
12.3.1. Permitted Assignments............................69
12.3.2. Effect; Effective Date...........................69
12.4. Dissemination of Information................................69
12.5. Tax Treatment...............................................70
XIII. NOTICES 70
13.1. Notices.....................................................70
13.2. Change of Address...........................................70
XIV. COUNTERPARTS.........................................................70
XV. CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.........71
15.1. CHOICE OF LAW...............................................71
15.2. CONSENT TO JURISDICTION.....................................71
15.3. WAIVER OF JURY TRIAL........................................71
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CREDIT AGREEMENT
This Credit Agreement, dated as of March 24, 2000, is among American
Medical Security Group, Inc., a Wisconsin corporation ("AMS"), the Lenders and
LaSalle Bank National Association ("LaSalle"), as Agent and as Swing Line
Lender.
R E C I T A L S:
A. The Lenders have agreed to make available to AMS a revolving credit
facility, and the Swing Line Lender has agreed to make available to AMS certain
Swing Line Loans, all upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which AMS or any of its
Subsidiaries (a) acquires any going business or all or substantially all of the
assets of any firm, corporation or limited liability company, or division
thereof, whether through purchase of assets, merger or otherwise or (b) directly
or indirectly acquires (in one transaction or as the most recent transaction in
a series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power) of the
outstanding ownership interests of a partnership or limited liability company.
"Advance" means a borrowing hereunder (or conversion or continuation
thereof) consisting of the aggregate amount of the several Revolving Loans made
on the same Borrowing Date (or date of conversion or continuation) by the
Lenders to AMS of the same Type and, in the case of Eurodollar Advances, for the
same Interest Period. The making of a Swing Line Loan shall not constitute an
Advance.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Affected Lender" is defined in Section 3.7.
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"Agent" means LaSalle in its capacity as contractual representative of the
Lenders pursuant to Article X, and not in its individual capacity as a Lender,
and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders, as reduced from time to time pursuant to the terms hereof.
"Agreement" means this credit agreement, as it may be amended or modified
and in effect from time to time.
"Agreement Accounting Principles" means GAAP as in effect from time to
time, applied in a manner consistent with those used in preparing the financial
statements referred to in Section 5.4(a) and (b).
"AMS" means American Medical Security Group, Inc., a Wisconsin corporation.
"Annual Statement" means the annual statutory financial statement of any
Insurance Subsidiary required to be filed with the insurance commissioner (or
similar authority) of its jurisdiction of incorporation, which statement shall
be in the form required by such Insurance Subsidiary's jurisdiction of
incorporation or, if no specific form is so required, in the form of financial
statements permitted by such insurance commissioner (or such similar authority)
to be used for filing annual statutory financial statements and shall contain
the type of information permitted by such insurance commissioner (or such
similar authority) to be disclosed therein, together with all exhibits or
schedules filed therewith
"Applicable Margin" means, with respect to Eurodollar Advances at any time,
the percentage rate per annum which is applicable at such time with respect to
Eurodollar Advances, determined by using the most recently calculated Leverage
Ratio, as set forth below:
Leverage Applicable
Ratio Margin
---------------------------- ----------------------------
Greater than or equal
to 0.30:1.0
and less than 0.35:1.0 200 b.p.
----------------------------- ----------------------------
Greater than or equal
to 0.25:1.0
and less than 0.30:1.0 175 b.p.
----------------------------- ----------------------------
Greater than or equal
to 0.25:1.0
and less than 0.20:1.0 150 b.p.
----------------------------- ----------------------------
Greater than or equal
to 0.20:1.0 125 b.p.
----------------------------- ----------------------------
The Applicable Margin shall be determined in accordance with the foregoing table
based on the then most recent annual or quarterly consolidated financial
statements of AMS and its
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Subsidiaries delivered pursuant to Section 6.1(a) or (b). Notwithstanding the
foregoing, until such time as AMS shall have achieved five consecutive quarters
of profitability after and including the fourth quarter of 1999, all Loans shall
be deemed to be Eurodollar Loans that shall accrue interest at the Eurodollar
Rate, with an Applicable Margin of 175 basis points (b.p.). Once AMS has
achieved five consecutive quarters of profitability after and including the
fourth quarter of 1999, adjustments, if any, to the Applicable Margin shall be
effective five days after the Agent shall have received the applicable
Financials. If AMS fails to deliver the Financials to the Agent at the time
required pursuant to Section 6.1, then the Applicable Margin shall be the
highest Applicable Margin set forth in the foregoing table until five days after
such Financials are so delivered.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Asset Disposition" means any sale, transfer or other disposition of any
asset of AMS or any Subsidiary in a single transaction or in a series of related
transactions, other than the sale of Investments in the ordinary course of
business by Insurance Subsidiaries.
"Authorized Officer" of a Person means any of the President, any Executive
Vice President or the chief financial officer of such Person, acting singly.
"Borrowing Date" means a date on which an Advance or a Swing Line Loan is
made hereunder.
"Borrowing Notice" is defined in Section 2.9.
"Business Day" means (a) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States dollars are carried on in the London interbank market and (b)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Chicago for the conduct of substantially all of their
commercial lending activities.
"Capital Expenditures" means, without duplication, any expenditures for any
purchase or other acquisition for value of any asset that is classified on a
consolidated balance sheet of AMS and its Subsidiaries prepared in accordance
with Agreement Accounting Principles as a fixed or capital asset excluding (a)
the cost of assets acquired under Capitalized Lease Obligations, (b)
expenditures of insurance proceeds to rebuild or replace any asset after a
casualty loss, and (c) leasehold improvement expenditures for which AMS or a
Subsidiary is reimbursed promptly by the lessor.
"Capitalized Lease" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
8
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalent Investments" means (a) short-term obligations of, or fully
guaranteed by, the United States of America, (b) commercial paper rated A-1 or
better by S&P or P-1 or better by Xxxxx'x, (c) demand deposit accounts
maintained in the ordinary course of business, and (d) certificates of deposit
issued by, and overnight repurchase agreements and time deposits with,
commercial banks (whether domestic or foreign) having capital and surplus in
excess of $100,000,000; provided, in each case that the same provides for
payment of both principal and interest (and not principal alone or interest
alone) and is not subject to any contingency regarding the payment of principal
or interest.
"Change in Control" means (a) Blue Cross and Blue Shield United of
Wisconsin shall cease to own beneficially and of record shares representing at
least 10% of the voting power of the issued and outstanding shares of capital
stock of AMS, free and clear of all Liens other than Permitted Liens, (b) the
acquisition by any Person, or two or more Persons acting in concert, of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934) or voting
control, directly or indirectly, of 25% or more of the outstanding shares of
voting stock of AMS; (c) AMS shall cease to own, free and clear of all Liens
other than Permitted Liens, 100% of the outstanding shares of voting stock of
Holdings on a fully diluted basis (other than pursuant to a merger of Holdings
with and into AMS in accordance with Section 6.12; (d) Holdings shall cease to
own, free and clear of all Liens other than Permitted Liens, 100% of the
outstanding shares of voting stock of UWLIC on a fully diluted basis; or (e)
during any period of 25 consecutive calendar months, commencing on the date of
this Agreement, the ceasing of those individuals (the "Continuing Directors")
who (i) were directors of AMS on the first day of each such period or (ii)
subsequently became directors of AMS and whose initial election or initial
nomination for election subsequent to that date was approved by a majority of
the Continuing Directors then on the board of directors of AMS to constitute a
majority of the board of directors of AMS.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to make
Loans not exceeding the amount set forth opposite its signature below or as set
forth in any Notice of Assignment relating to any assignment that has become
effective pursuant to Section 12.3.2, as such amount may be modified from time
to time pursuant to the terms hereof.
"Consolidated Indebtedness" means at any time the Indebtedness of AMS and
its Subsidiaries calculated on a consolidated basis as of such time that
consists of Indebtedness for borrowed money to any Lender or any other financial
institution including, without limitation, all Indebtedness shown as "Notes
Payable" on the consolidated financial statements of AMS and its Subsidiaries
delivered pursuant to Section 6.1(a) or (b).
9
"Consolidated Interest Expense" means, with reference to any period, the
interest expense of AMS and its Subsidiaries calculated on a consolidated basis
for such period.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of AMS and its Subsidiaries calculated on a consolidated basis
for such period.
"Consolidated Net Worth" means at any time the consolidated stockholders'
equity of AMS and its Subsidiaries calculated on a consolidated basis as of such
time, after appropriate deduction for any minority interests in Subsidiaries, in
accordance with GAAP, excluding treasury stock and also excluding unrealized net
losses and gains on assets held for sale pursuant to Statement of Financial
Accounting Standards ("SFAS") No. 115 and other accumulated comprehensive income
pursuant to SFAS No. 133.
"Consolidated Person" means, for the taxable year of reference, each Person
which is a member of the affiliated group of AMS if consolidated returns are or
shall be filed for such affiliated group for federal income tax purposes or any
combined or unitary group of which AMS, Holdings or UWLIC is a member for state
income tax purposes.
"Consolidated Total Capitalization" means at any time the sum of
Consolidated Indebtedness and Consolidated Net Worth, each calculated at such
time.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, but excluding Contingent Obligations in respect of insurance
policies issued in the ordinary course of business.
"Conversion/Continuation Notice" is defined in Section 2.10.
"Controlled Group" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with AMS or any of its
Subsidiaries, are treated as a single employer under Section 414 of the Code.
"Default" means an event described in Article VII.
"EBITDA" means, for any period, for AMS and its Subsidiaries on a
consolidated basis, determined in accordance with GAAP, the sum of (a) the net
income (or net loss) for such period, plus (b) all amounts treated as expenses
for depreciation and interest and the amortization of intangibles of any kind to
the extent included in the determination of such net income (or loss), plus (c)
all accrued taxes on or measured by income to the extent included in the
determination of such net income (or loss).
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"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to (a) the
protection of the environment, (b) the effect of the environment on human
health, (c) emissions, discharges or releases of pollutants, contaminants,
hazardous substances or wastes into surface water, ground water or land, or (d)
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which bears interest at the
applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the rate determined by the Agent to be the rate at
which LaSalle offers to place deposits in U.S. dollars with first-class banks in
the London interbank market at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, in the approximate
amount of such Eurodollar Advance and having a maturity approximately equal to
such Interest Period.
"Eurodollar Loan" means a Loan which bears interest at the applicable
Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (a) the quotient of (i) the Eurodollar Base
Rate applicable to such Interest Period, divided by (ii) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(b) the Applicable Margin. The Eurodollar Rate shall be rounded to the next
higher multiple of 1/16 of 1% if the rate is not such a multiple.
"Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (a) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (b) the jurisdiction in
which the Agent's or such Lender's principal executive office or such Lender's
applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another document
is specifically referenced.
"Existing Reinsurance Agreements" is defined in Section 5.23.
"Facility Termination Date" means March 24, 2005.
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"Federal Funds Effective Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor publication, "H.15(519)") on the preceding Business Day opposite
the caption "Federal Funds (Effective)"; or, if for any relevant day such rate
is not so published on any such preceding Business Day, the rate for such day
will be the arithmetic mean as determined by the Agent of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 A.M. (New York
City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
"Financial Contract" of a Person means (a) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (b) any agreements, devices or
arrangements providing for payments related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to, interest rate
exchange agreements, forward currency exchange agreements, interest rate cap or
collar protection agreements, forward rate currency or interest rate options.
"Fiscal Quarter" means one of the four three-month accounting periods
comprising a Fiscal Year.
"Fiscal Year" means the twelve-month accounting period ending December 31
of each year.
"Fixed Charge Coverage Ratio" means, as of any date of determination, the
ratio of (a) the sum of (i) AMS's EBITDA for such period minus (ii) the sum of
all amounts paid out as dividends or other dividend-like distributions by AMS or
any Subsidiary to any Person other than AMS or one or more of its Subsidiaries
during such period, to (b) the sum of (i) Consolidated Interest Expense for the
period of four Fiscal Quarters ending on such date, plus (ii) required payments
of principal of Consolidated Indebtedness made during such period, plus (iii)
the sum of all amounts paid by AMS and its Subsidiaries under any Operating
Lease during such period.
"Floating Rate" means, for any day, a rate of interest per annum equal to
the higher of (a) the Prime Rate for such day and (b) the sum of the Federal
Funds Effective Rate for such day plus 1/2% per annum.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate, including without limitation each Swing Line Loan.
"GAAP" shall mean generally accepted accounting principles in the United
States of America.
"Governmental Authority" means any government (foreign or domestic) or any
state or other political subdivision thereof or any governmental body, agency,
authority, department or
12
commission (including without limitation any board of insurance, insurance
department or insurance commission and any taxing authority or political
subdivision) or any instrumentality or officer thereof (including without
limitation any court or tribunal) exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and any
corporation, partnership or other entity directly or indirectly owned or
controlled by or subject to the control of any of the foregoing.
"Guaranty Agreement" means that certain Guaranty Agreement dated as of the
date hereof by Holdings in favor of the Agent and the Lenders, as the same may
be amended, supplemented or modified from time to time.
"Holdings" means American Medical Security Holdings, Inc., a Wisconsin
corporation.
"Indebtedness" of a Person means such Person's (a) obligations for borrowed
money, (b) obligations representing the deferred purchase price of Property or
services (other than accounts payable arising in the ordinary course of such
Person's business payable on terms customary in the trade), (c) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from Property now or hereafter owned or acquired by such Person, (d)
obligations which are evidenced by notes, acceptances, or other instruments, (e)
obligations of such Person to purchase securities or other property arising out
of or in connection with the sale of the same or substantially similar
securities or property, (f) Capitalized Lease Obligations, (g) Contingent
Obligations, (h) obligations for which such Person is obligated pursuant to or
in respect of a Letter of Credit, (i) Off-Balance Sheet Liabilities, (j)
obligations for which such person is obligated pursuant to or in respect of a
Sale and Leaseback Transaction, (k) Net Xxxx-to-Market Exposure of Rate Hedging
Agreements and other Financial Contracts, and (l) other obligations for borrowed
money or other financial accommodations which, in accordance with Agreement
Accounting Principles or SAP, as applicable, would be shown as a liability on
the consolidated balance sheet of such Person.
"Initial Closing Date" means March 24, 2000.
"Insurance Subsidiary" means any Subsidiary which is engaged in the
insurance business.
"Interest Coverage Ratio" means, as of any date of determination, the ratio
of (a) the sum of (i) AMS's EBITDA for such period minus (ii) the sum of all
amounts paid out as dividends or other dividend-like distributions by AMS or any
Subsidiary to any Person other than AMS or one or more of its Subsidiaries
during such period to (b) Consolidated Interest Expense for the period of four
Fiscal Quarters ending on such date.
"Interest Period" means, with respect to a Eurodollar Advance, a period of
one, two, three or six months commencing on a Business Day selected by AMS
pursuant to this Agreement. Such Interest Period shall end on the day which
corresponds numerically to such date one, two, three or six months thereafter;
provided, that if there is no such numerically corresponding day in such next,
second, third or sixth succeeding month, such Interest Period shall end on the
last Business Day of such next, second, third or sixth succeeding month;
provided, further, that
13
during the period specified in the proviso in Section 2.9, each Interest Period
shall be limited to a period of seven days. If an Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period shall
end on the next succeeding Business Day; provided, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Investment" of a Person means (a) any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; (b) any stocks, bonds, mutual
funds, partnership interests, notes, debentures or other securities owned by
such Person; (c) any deposit accounts and certificates of deposit owned by such
Person; and (d) any structured notes, derivative financial instruments and other
similar instruments or contracts owned by such Person.
"LaSalle" means LaSalle Bank National Association in its individual
capacity, and its successors.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement (including the Swing Line Lender) and their respective successors
and assigns.
"Lending Installation" means, with respect to a Lender or the Agent, the
office, branch, subsidiary or affiliate of such Lender or the Agent listed on
the signature pages hereof or on a Schedule or otherwise selected by such Lender
or the Agent pursuant to Section 2.20.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Leverage Ratio" means, as of any date of calculation, the ratio of (a)
Consolidated Indebtedness outstanding on such date to (b) Consolidated Total
Capitalization on such date.
"License" means any license, certificate of authority, permit or other
authorization which is required to be obtained from any Governmental Authority
in connection with the operation, ownership or transaction of insurance
business.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's loan made pursuant to
Article II (or any conversion or continuation thereof) in the form of a
Revolving Loan or a Swing Line Loan.
14
"Loans" means the Revolving Loans and the Swing Line Loans.
"Loan Documents" means this Agreement, any Notes issued pursuant to Section
2.11 or 2.16, the Guaranty Agreement, the Pledge Agreements and the other
documents and agreements contemplated hereby and executed by AMS or Holdings in
favor of the Agent or any Lender.
"Material Adverse Effect" means a material adverse effect on (a) the
business, Property, condition (financial or otherwise), operations, performance
or prospects of AMS and its Subsidiaries taken as a whole, (b) the ability of
AMS or Holdings to perform its obligations under the Loan Documents to which it
is a party, or (c) the validity or enforceability of any of the Loan Documents
or the rights or remedies of the Agent or the Lenders thereunder.
"Material Indebtedness" is defined in Section 7.5.
"Material Insurance Subsidiary" means an Insurance Subsidiary with a
Statutory Capital and Surplus of greater than $5,000,000.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which AMS or any member of the
Controlled Group is a party to which more than one employer is obligated to make
contributions.
"NAIC" means the National Association of Insurance Commissioners or any
successor thereto, or in lieu thereof, any other association, agency or other
organization performing advisory, coordination or other like functions among
insurance departments, insurance commissioners and similar Governmental
Authorities of the various states of the United States toward the promotion of
uniformity in the practices of such Governmental Authorities.
"Net Available Proceeds" means (a) with respect to any Asset Disposition,
the sum of cash or readily marketable cash equivalents received (including by
way of a cash generating sale or discounting of a note or account receivable)
therefrom, whether at the time of such disposition or subsequent thereto, or (b)
with respect to any sale or issuance of equity securities of AMS or any
Subsidiary, cash or readily marketable cash equivalents received therefrom,
whether at the time of disposition or subsequent thereto, net, in either case,
of all legal, tax and recording expenses, commissions and other fees and all
costs and expenses incurred and, in the case of an Asset Disposition, net of all
payments made by AMS or any Subsidiary on any Indebtedness which is secured by
such assets pursuant to a permitted Lien upon or with respect to such assets or
which must, by the terms of such Lien, in order to obtain a necessary consent to
such Asset Disposition, or by applicable law, be repaid out of the proceeds from
such Asset Disposition.
"Net Xxxx-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Hedging Agreements and other Financial
Contracts. "Unrealized losses" means the fair
15
market value of the cost to such Person of replacing such Rate Hedging Agreement
or Financial Contract as of the date of determination (assuming the Rate Hedging
Agreement or Financial Contract were to be terminated as of that date), and
"unrealized profits" means the fair market value of the gain to such Person of
replacing such Rate Hedging Agreement or Financial Contract as of the date of
determination (assuming such Rate Hedging Agreement or Financial Contract were
to be terminated as of that date).
"Non-U.S. Lender" is defined in Section 3.5(d).
"Non-Use Fee Rate" means, at any time, the percentage rate per annum at
which non-use fees are accruing on the unused amount of the Aggregate Commitment
at such time, determined by using the most recently calculated Leverage Ratio,
as set forth below:
----------------------------- ----------------------------
Leverage Non-Use
Ratio Fee Rate
----------------------------- -----------------------------
Greater than or equal
to 0.30:1.0
and less than 0.35:1.0 0.40%
----------------------------- -----------------------------
Greater than or equal
to 0.25:1.0
and less than 0.30:1.0 0.35%
----------------------------- -----------------------------
Greater than or equal
to 0.25:1.0
and less than 0.20:1.0 0.30%
----------------------------- -----------------------------
Greater than or equal
to 0.20:1.0 0.25%
----------------------------- -----------------------------
The Non-Use Fee Rate shall be determined in accordance with the foregoing table
based on the then most recent annual or quarterly consolidated financial
statements of AMS and its Subsidiaries delivered pursuant to Section 6.1(a) or
(b). Notwithstanding the foregoing, until such time as AMS shall have achieved
five consecutive quarters of profitability after and including the fourth
quarter of 1999, the Non-Use Fee Rate shall be equal to 0.35%. Once AMS has
achieved five consecutive quarters of profitability after and including the
fourth quarter of 1999, adjustments, if any, to the Non-Use Fee Rate shall be
effective five days after the Agent shall have received the applicable
Financials. If AMS fails to deliver the Financials to the Agent at the time
required pursuant to Section 6.1, then the Non-Use Fee Rate shall be the highest
Non-Use Fee Rate set forth in the foregoing table until five days after such
Financials are so delivered.
"Notes" means, collectively any Revolving Notes and Swing Line Notes then
issued at the request of the applicable Lender.
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Loans, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations
16
of AMS to the Lenders or to any Lender, the Agent or any indemnified party
arising under the Loan Documents and any Rate Hedging Obligations or foreign
exchange contracts of AMS owing to the Agent or any Lender.
"Off-Balance Sheet Liability" of a Person means (a) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (b) any liability under any Sale and Leaseback
Transaction which does not create a liability on the balance sheet of such
Person, (c) any liability under any financing lease or so-called "synthetic
lease" transaction entered into by such Person, or (d) any obligation arising
with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
balance sheet of such Person, but excluding Operating Leases.
"Operating Lease" means any lease or other agreement conveying the right to
use of any personal property by AMS or any Subsidiary, as lessee, other than any
Capitalized Lease, that consists of computers and peripherals, telephones and
telephone systems and mainframe(s) and storage.
"Other Taxes" is defined in Section 3.5(b).
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each calendar month.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Liens" means Liens described in Section 6.15, paragraphs (a)
through (i).
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which AMS or any member of the Controlled Group may have any
liability.
"Pledge Agreements" means, collectively, (a) that certain Stock Pledge
Agreement dated as of the date hereof between AMS and the Agent, and (b) that
certain Stock Pledge Agreement dated as of the date hereof between Holdings and
the Agent, as either may be amended, supplemented or modified from time to time.
"Prime Rate" means, for any day, the rate of interest in effect for such
day as publicly announced from time to time by LaSalle as its prime rate
(whether or not such rate is actually charged by LaSalle). Any change in the
Prime Rate announced by LaSalle shall take effect at the opening of business on
the day specified in the public announcement of such change.
17
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Pro Rata Share" means, as to any Lender, (a) at any time at which the
Aggregate Commitment remains outstanding, the percentage equivalent (expressed
as a decimal rounded to the ninth decimal place) at such time of such Lender's
Commitment divided by the Aggregate Commitment, and (b) after the termination of
the Aggregate Commitment, the percentage equivalent (expressed as a decimal,
rounded to the ninth decimal place) at such time of the principal amount of such
Lender's outstanding Loans (other than Swing Line Loans) divided by the
aggregate principal amount of the outstanding Loans (other than Swing Line
Loans) of all of the Lenders.
"Purchasers" is defined in Section 12.3.1.
"Quarterly Statement" means the quarterly statutory financial statement of
any Insurance Subsidiary required to be filed with the insurance commissioner
(or similar authority) of its jurisdiction of incorporation or, if no specific
form is so required, in the form of financial statements permitted by such
insurance commissioner (or such similar authority) to be used for filing
quarterly statutory financial statements and shall contain the type of financial
information permitted by such insurance commissioner (or such similar authority)
to be disclosed therein, together with all exhibits or schedules filed
therewith.
"Rate Hedging Agreement" means an agreement, device or arrangement
providing for payments which are related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants.
"Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all Rate
Hedging Agreements, and (b) any and all cancellations, buy backs, reversals,
terminations or assignments of any Rate Hedging Agreement.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation T" means Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and shall include any successor or
other regulation or official interpretation of such Board of Governors relating
to the extension of credit by securities brokers and dealers for the purpose of
purchasing or carrying margin stocks applicable to such Persons.
18
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and shall include any successor or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by the specified lenders for the purpose of
purchasing or carrying margin stocks applicable to such Persons.
"Replacement Lender" is defined in Section 3.7.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event; provided, that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.
"Reports" is defined in Section 9.6.
"Required Lenders" means, during all times when the Lenders are comprised
of three (3) or fewer financial institutions, those Lenders in the aggregate
having at least one hundred percent (100%) of the Aggregate Commitment and,
during all times when the Lenders are comprised of four (4) or more financial
institutions, those Lenders in the aggregate having at least fifty-one percent
(51%) of the Aggregate Commitment; provided, however, that if the Aggregate
Commitment has been terminated during any period when the Lenders are comprised
of three (3) or fewer financial institutions, Required Lenders means Lenders in
the aggregate holding at least seventy-five percent (75%) of the aggregate
unpaid principal amount of the outstanding Revolving Loans and Swing Line Loans
(less the amount of any Swing Line Loans as to which participating interests
have been purchased by the Lenders pursuant to Section 2.12(d)), and provided,
further, that if the Aggregate Commitment has been terminated during any period
when the Lenders are comprised of four (4) or more financial institutions,
Required Lenders means Lenders in the aggregate holding at least fifty-one
percent (51%) of the aggregate unpaid principal amount of the outstanding
Revolving Loans and Swing Line Loans (less the amount of any Swing Line Loans as
to which participating interests have been purchased by the Lenders pursuant to
Section 2.12(d)).
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
19
"Revolving Note" means any promissory note issued at the request of a
Lender pursuant to Section 2.16 in the form of Exhibit C.
"Revolving Loan" is defined in Section 2.1.
"Risk Based Capital Act" means the Risk-Based Capital (RBC) for Life and/or
Health Insurers Model Act as in effect as the date of this Agreement.
"S&P" means Standard and Poor's Ratings Service, a division of The McGraw
Hill Companies, Inc.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"SAP" means, with respect to any Insurance Subsidiary, the statutory
accounting practices prescribed or permitted by the insurance commissioner (or
other similar authority) in the jurisdiction of such Person for the preparation
of annual statements and other financial reports by insurance companies of the
same type as such Person in effect from time to time, applied in a manner
consistent with those used in preparing the financial statements referred to in
Section 5.4(c) and (d).
"Schedule" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a Plan maintained by AMS or any member of the
Controlled Group for employees of AMS or any member of the Controlled Group.
"Statutory Capital and Surplus" means, with respect to any Insurance
Subsidiary at any time, the capital and surplus of such Insurance Subsidiary at
such time, as determined in accordance with SAP ("Liabilities, Surplus and Other
Funds" statement, Page 3, Column 1, Line 38 of the Annual Statement).
"Statutory Net Income" means, with respect to any Insurance Subsidiary for
any computation period, the net income earned by such Insurance Subsidiary
during such period, as determined in accordance with SAP ("Summary of
Operations" statement, Page 4, Column 1, Line 33 of the Annual Statement).
"Statutory Surplus" means, with respect to any Insurance Subsidiary at any
time, the surplus as regards policyholders of such Insurance Subsidiary at such
time, as determined in accordance with SAP ("Liabilities, Surplus and Other
Funds" statement, Page 3, Column 1, Line 37 of the Annual Statement).
20
"Subordinated Indebtedness" shall mean unsecured Indebtedness of AMS or any
of its Subsidiaries which has subordination terms, covenants, pricing and other
terms which have been approved in writing by the Required Lenders.
"Subsidiary" of a Person means (a) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(b) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of AMS.
"Substantial Portion" means, with respect to the Property of any Person,
Property which (a) represents more than 10% of the consolidated assets of such
Person as would be shown in the consolidated financial statements of such Person
as at the end of the Fiscal Quarter next preceding the date on which such
determination is made, or (b) is responsible for more than 10% of the
consolidated net revenues or of the consolidated net income of such Person as
reflected in the financial statements referred to in clause (a) above.
"Swing Line Commitment" means, at any time, the commitment of the Swing
Line Lender to make Swing Line Loans pursuant to Section 2.11.
"Swing Line Lender" means LaSalle, in its capacity as provider of the Swing
Line Loans.
"Swing Line Loan" means a Loan made by the Swing Line Lender.
"Swing Line Note" means a promissory note in substantially the form of
Exhibit D.
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or a Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the present value
of all vested and unvested accrued benefits under all Single Employer Plans
exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
21
"UWLIC" means United Wisconsin Life Insurance Company, a Wisconsin life
insurance company.
"Wholly-Owned Subsidiary" of a Person means (a) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (b) any partnership, limited liability company, association,
joint venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.
"Year 2000 Issues" means costs, problems and uncertainties associated with
the inability of certain computer applications to effectively handle data,
including dates on and after January 1, 2000, as such inability affects the
business, operations and financial condition of AMS and its Subsidiaries and of
AMS's and its Subsidiaries' material customers, suppliers and vendors.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms. References herein to particular columns,
lines or sections of any Person's Annual Statement shall be deemed, where
appropriate, to be references to the corresponding column, line or section of
such Person's Quarterly Statement, or if no such corresponding column, line or
section exists or if any report form changes, then to the corresponding item
referenced thereby. References herein to the Risk Based Capital Act shall be
deemed to be references to such act as in effect on the date of this Agreement;
provided, that the Agent, the Lenders and AMS agree to make mutually acceptable
modifications to Section 6.19.6 hereof following the request by any thereof upon
any modification to such act so as to equitably reflect such modifications in
order that the criteria for evaluating the Insurance Subsidiaries will be the
same after such modifications as if such modifications had not occurred. Each
accounting term used herein which is not otherwise defined herein shall be
defined in accordance with Agreement Accounting Principles unless otherwise
specified.
In the event that any changes in Agreement Accounting Principles and/or SAP
occur after the date of this Agreement and such changes result in a material
variation in the method of calculation of financial covenants or other terms of
this Agreement, then AMS, the Agent and the Lenders agree to amend such
provisions of this Agreement so as to equitably reflect such changes in order
that the criteria for evaluating AMS's financial condition will be the same
after such changes as if such changes had not occurred.
ARTICLE II
THE CREDITS
2.1. Commitment. (a) From and including the date of this Agreement and
prior to the Facility Termination Date, each Lender severally agrees, on the
terms and conditions set forth in this Agreement, to make Loans (each such Loan,
a "Revolving Loan") to AMS from time to time in amounts which, together with
such Lender's Pro Rata Share of any outstanding Swing Line Loans, shall not
exceed in the aggregate at any one time outstanding the amount of its
22
Commitment. Subject to the terms of this Agreement, AMS may borrow, repay and
reborrow Revolving Loans and Swing Line Loans at any time prior to the Facility
Termination Date. The Commitments to lend hereunder shall expire on the Facility
Termination Date.
(b) AMS hereby agrees that if at any time, as a result in reductions
in the Aggregate Commitment pursuant to Section 2.8 or otherwise, the
outstanding principal amount of the Loans exceeds the Aggregate Commitment,
AMS shall repay immediately its then outstanding Loans in such amount as
may be necessary to eliminate such excess.
2.2. Required Payments; Termination. Any outstanding Advances and all other
unpaid Obligations shall be paid in full by AMS on the Facility Termination
Date.
2.3. Ratable Loans. Each Advance hereunder shall consist of Revolving Loans
made from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment.
2.4. Types of Advances. The Advances may be Floating Rate Advances or
Eurodollar Advances, or a combination thereof, selected by AMS in accordance
with Sections 2.9 and 2.10.
2.5. Non-Use Fee; Reductions in Aggregate Commitment. AMS agrees to pay to
the Agent for the account of each Lender a non-use fee at a per annum rate equal
to the Non-Use Fee Rate times such Lender's Pro Rata Share (as adjusted from
time to time) of the daily average of the unused amount of the Aggregate
Commitment from the date hereof to and including the Facility Termination Date,
payable in arrears on the last day of each calendar quarter and on the Facility
Termination Date. For purposes of calculating usage hereunder for any particular
day, the Aggregate Commitment shall be deemed used to the extent of the
aggregate principal amount of all outstanding Revolving Loans and Swing Line
Loans on such day. AMS may permanently reduce the Aggregate Commitment in whole,
or in part ratably among the Lenders, in a minimum amount of $1,000,000 (and in
multiples of $500,000 if in excess thereof) upon at least three Business Days'
written notice to the Agent, which notice shall specify the amount of any such
reduction; provided, that the amount of the Aggregate Commitment may not be
reduced below the aggregate principal amount of the outstanding Advances and the
outstanding Swing Line Loans. All accrued non-use fees shall be payable on the
effective date of any termination or reduction of the obligations of the Lenders
to make Loans hereunder.
2.6. Minimum Amount of Each Advance. Each Advance shall be in the minimum
amount of $1,000,000 (and in multiples of $500,000 if in excess thereof);
provided, that any Floating Rate Advance may be in the amount of the unused
Aggregate Commitment.
2.7. Optional Principal Payments. AMS may from time to time pay, without
penalty or premium, all outstanding Advances or, in a minimum aggregate amount
of $1,000,000 or any integral multiple of $500,000 in excess thereof, any
portion of the outstanding Advances upon two Business Days' prior notice to the
Agent, subject, in the case of Eurodollar Advances, to the payment of any
funding indemnification amounts required by Section 3.4 but otherwise without
penalty or premium.
23
2.8. Mandatory Commitment Reductions. (a) The Aggregate Commitment shall be
automatically and permanently reduced to the following amounts on the following
dates:
Date Availability Reduction Aggregate Commitment
March 24, 2001 $ 5,000,000 $40,000,000
March 24, 2002 $ 5,000,000 $35,000,000
March 24, 2003 $ 10,000,000 $25,000,000
March 24, 2004 $ 10,000,000 $15,000,000
March 24, 2005 $ 15,000,000 $ 0
(b AMS shall make permanent reductions in the Aggregate Commitment in
amounts equal to the following:
(i) within 30 days after the receipt thereof by AMS or any
Subsidiary, an amount equal to 75% of the aggregate Net Available
Proceeds realized upon all Asset Dispositions of $1,000,000 or
greater in any Fiscal Year of AMS; provided, that no such
prepayment or commitment reduction shall be required (A) if such
amount is less than $1,000,000 in any Fiscal Year, or (B) as a
result of any Asset Disposition permitted pursuant to Section
6.13(a), (b) or (c) ; and
(ii) within 30 days after the receipt thereof by AMS or any
of its Subsidiaries an amount equal to 75% of the Net Available
Proceeds realized upon the sale by AMS or such Subsidiary of any
of its equity securities (including the reissuance of any
treasury stock).
(c) Any reduction in the Aggregate Commitment pursuant to this Section
2.8 or otherwise shall ratably reduce the Commitment of each Lender.
(d) At no time shall the Swing Line Commitment exceed the Aggregate
Commitment, and any reduction of the Aggregate Commitment which reduces the
Aggregate Commitment below the then-current amount of the Swing Line
Commitment shall result in an automatic corresponding reduction of the
Swing Line Commitment to the amount of the Aggregate Commitment, as so
reduced, without any action on the part of the Swing Line Lender. At no
time shall the Swing Line Commitment exceed the Commitment of the Swing
Line Lender, and any reduction of the Aggregate Commitment which reduces
the Commitment of the Swing Line Lender below the then-current amount of
the Swing Line Commitment shall result in an automatic corresponding
reduction of the Swing Line Commitment to the amount of the Commitment of
the Swing Line Lender, as so reduced, without any action on the part of the
Swing Line Lender.
2.9. Method of Selecting Types and Interest Periods for New Advances. AMS
shall select the Type of Advance and, in the case of each Eurodollar Advance,
the Interest Period
24
applicable thereto from time to time. AMS shall give the Agent irrevocable
notice (a "Borrowing Notice") not later than 11:00 a.m. (Chicago time) on the
Borrowing Date of each Floating Rate Advance and three Business Days before the
Borrowing Date for each Eurodollar Advance, specifying
(a) the Borrowing Date, which shall be a Business Day, of such
Advance,
(b) the aggregate amount of such Advance,
(c) the Type of Advance selected, and
(d) in the case of each Eurodollar Advance, the Interest Period
applicable thereto, which shall end on or prior to the Facility
Termination Date.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Revolving Loan or Loans in funds immediately available in
Chicago to the Agent at its address specified pursuant to Article XIII. The
Agent will make the funds so received from the Lenders available to AMS at the
Agent's aforesaid address.
2.10. Conversion and Continuation of Outstanding Advances. Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into Eurodollar Advances pursuant to this Section
2.10 or are repaid in accordance with Section 2.7. Each Eurodollar Advance shall
continue as a Eurodollar Advance until the end of the then applicable Interest
Period therefor, at which time such Eurodollar Advance shall be automatically
converted into a Floating Rate Advance unless (x) such Eurodollar Advance is or
was repaid in accordance with Section 2.7 or (y) AMS shall have given the Agent
a Conversion/Continuation Notice (as defined below) requesting that, at the end
of such Interest Period, such Eurodollar Advance continue as a Eurodollar
Advance for the same or another Interest Period. Subject to the terms of Section
2.6, AMS may elect from time to time to convert all or any part of a Floating
Rate Advance into a Eurodollar Advance. AMS shall give the Agent irrevocable
notice (a "Conversion/Continuation Notice") of each conversion of a Floating
Rate Advance into a Eurodollar Advance or continuation of a Eurodollar Advance
not later than 10:00 a.m. (Chicago time) at least three Business Days prior to
the date of the requested conversion or continuation, specifying:
(a) the requested date of such conversion or continuation, which
shall be a Business Day,
(b) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(c) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the
Interest Period applicable thereto.
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2.11. The Swing Line Loans. Subject to the terms and conditions hereof, the
Swing Line Lender agrees to make Swing Line Loans to AMS from time to time prior
to the Facility Termination Date in an aggregate principal amount at any one
time outstanding not to exceed $10,000,000 (the "Swing Line Commitment");
provided, that after giving effect to any such Swing Line Loan, the principal
amount outstanding of all Revolving Loans and Swing Line Loans at such time
would not exceed the Aggregate Commitment at such time; provided, further, that
the principal amount outstanding of the Swing Line Loans and of the Swing Line
Lender's Revolving Loans would not exceed the Swing Line Lender's Commitment.
Prior to the Facility Termination Date, AMS may use the Swing Line Commitment by
borrowing, prepaying the Swing Line Loans in whole or in part, and reborrowing,
all in accordance with the terms and conditions hereof. All Swing Line Loans
shall bear interest at the Floating Rate and shall not be entitled to be
converted into Loans that bear interest at any other rate. At the Swing Line
Lender's request, the Swing Line Loans shall be evidenced by a Swing Line Note
made payable thereto.
2.12. Procedure for Swing Line Loans. (a) AMS may borrow under the Swing
Line Commitment on any Business Day until the Facility Termination Date;
provided, that AMS shall give the Swing Line Lender irrevocable notice (which
notice must be received by the Swing Line Lender prior to 11:00 a.m. (Chicago
time)) specifying the amount of the requested Swing Line Loan, which shall be a
minimum amount of $250,000 or a whole multiple of $100,000 in excess thereof.
The proceeds of the Swing Line Loan will be made available by the Swing Line
Lender to AMS in immediately available funds at the office of the Swing Line
Lender by 1:00 p.m. (Chicago time) on the date of such notice. AMS may at any
time and from time to time, prepay the Swing Line Loans, in whole or in part,
without premium or penalty, by notifying the Swing Line Lender prior to 11:00
a.m. (Chicago time) on any Business Day of the date and amount of prepayment
with a copy to the Agent. If any such notice is given, the amount specified in
such notice shall be due and payable on the date specified therein. Partial
prepayments shall be in an aggregate principal amount of $250,000 or a whole
multiple of $100,000 in excess thereof. If any Swing Line Loan shall remain
outstanding at 11:00 a.m. (Chicago time) on the tenth (10th) day following the
date of such Swing Line Loan and if by such time on such tenth (10th) day the
Agent shall have received from AMS neither (i) a Borrowing Notice delivered by
AMS pursuant to Section 2.9 requesting that Revolving Loans be made to AMS
pursuant to Section 2.1 on such date in an amount at least equal to the
principal amount of such Swing Line Loan nor (ii) any other notice satisfactory
to the Agent indicating AMS's intent to repay with funds obtained from other
sources such Swing Line Loan ("Swing Line Repayment Notice") on or before such
tenth (10th) day, then on such tenth (10th) day the Swing Line Lender shall (and
on any previous Business Day the Swing Line Lender in its sole discretion may)
give notice of such Swing Line Loan to each Lender.
(b) If any Swing Line Loan shall remain outstanding at 11:00 a.m.
(Chicago time) on the thirtieth (30th) day following the date of such Swing
Line Loan and if by such time on such thirtieth (30th) day the Agent shall
not have received from AMS a Swing Line Repayment Notice with respect to
such Swing Line Loan, have received from AMS neither (i) a Borrowing Notice
delivered by AMS pursuant to Section 2.9 requesting that Revolving Loans be
made to AMS pursuant to Section 2.1 on such date in an amount at least
equal to the principal
26
amount of such Swing Line Loan nor (ii) any other notice satisfactory to
the Agent indicating AMS's intent to repay such Swing Line Loan on or
before such thirtieth (30th) day with funds obtained from other sources,
then on such thirtieth (30th) day the Swing Line Lender shall (and on any
previous Business Day the Swing Line Lender in its sole discretion may), on
behalf of AMS (which hereby irrevocably directs the Swing Line Lender to
act on its behalf) request the Agent to notify each Lender to make a
Floating Rate Loan in an amount equal to such Lender's Pro Rata Share of
(A) in the case of such a request which is required to be made, the amount
of the relevant Swing Line Loan, and (B) in the case of such a
discretionary request, the aggregate principal amount of the Swing Line
Loans outstanding on the date such notice is given, subject, in any event,
to each Lender's maximum Commitment and such Lender's Pro Rata Share of
accrued and unpaid interest. Unless any of the events described in Section
7.6 or 7.7 shall have occurred with respect to AMS (in which event the
procedures of paragraph (d) of this Section 2.12 shall apply) each Lender
shall make the proceeds of its Revolving Loan available to the Agent for
the account of the Swing Line Lender in funds immediately available prior
to 1:00 p.m. (Chicago time) on the Business Day next succeeding the date
such notice is given. The proceeds of such Revolving Loans shall be
immediately applied to repay the outstanding Swing Line Loans. Effective on
the day such Revolving Loans are made, the portion of the Swing Line Loans
so paid shall no longer be outstanding as Swing Line Loans and shall no
longer be due under the Swing Line Note. AMS shall pay to the Swing Line
Lender, promptly following the Swing Line Lender's demand, the amount of
its outstanding Swing Line Loans to the extent amounts received from
Lenders are not sufficient to repay in full such outstanding Swing Line
Loans.
(c) Notwithstanding anything herein to the contrary, the Swing Line
Lender (i) shall not be obligated to make any Swing Line Loan if the
conditions set forth in Article IV have not been satisfied and (ii) shall
not make any requested Swing Line Loan if, prior to 11:00 a.m. (Chicago
time) on the date of such requested Swing Line Loan, it has received a
written notice from the Agent or any Lender directing it not to make
further Swing Line Loans because one or more of the conditions specified in
Article IV are not then satisfied.
(d) If prior to the making of a Revolving Loan required to be made by
Section 2.12(b) a Default described in Section 7.6 or 7.7 shall have
occurred and be continuing with respect to AMS, each Lender will, on the
date such Revolving Loan was to have been made pursuant to the notice
described in Section 2.12(b), purchase an undivided participating interest
in the outstanding Swing Line Loans (including accrued interest thereon) in
an amount equal to its Pro Rata Share of the aggregate principal amount of
Swing Line Loans then outstanding, subject to such Lender's Commitment.
Each Lender will immediately transfer to the Agent for the benefit of the
Swing Line Lender, in immediately available funds, the amount of its
participation, subject to each such Lender's maximum Commitment and such
Lender's Pro Rata Share of accrued and unpaid interest.
(e) Whenever, at any time after a Lender has purchased a participating
interest in a Swing Line Loan, the Swing Line Lender receives any payment
on account thereof, the Swing Line Lender will distribute to the Agent for
delivery to each Lender its participating interest in such amount
(appropriately adjusted in the case of interest payments, to reflect the
27
period of time during which such Lender's participating interest was
outstaning and funded); provided, that in the event that such payment
received by the Swing Line Lender is required to be returned, such Lender
will return to the Agent for delivery to the Swing Line Lender any portion
thereof previously distributed by the Swing Line Lender to it.
(f) Other than each Lender's maximum Commitment and such Lender's Pro
Rata Share of accrued and unpaid interest, each Lender's obligation to make
the Revolving Loans referred to in Section 2.12(b) and to purchase
participating interests pursuant to Section 2.12(d) shall be absolute and
unconditional and shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defense or
other right which such Lender or AMS may have against the Swing Line
Lender, AMS or any other Person for any reason whatsoever, (ii) the
occurrence or continuance of a Default or an Unmatured Default, (iii) any
adverse change in the condition (financial or otherwise) of AMS or any
Subsidiary, (iv) any breach of this Agreement or any other Loan Document by
AMS, any Subsidiary or any other Lender, or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing.
2.13. Interest Rates and Changes in Rates, etc. Each Floating Rate Advance
shall bear interest on the outstanding principal amount thereof, for each day
from and including the date such Advance is made or is automatically converted
from a Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.10,
to but excluding the date it is paid or is converted into a Eurodollar Advance
pursuant to Section 2.10 hereof, at a rate per annum equal to the Floating Rate
for such day. Changes in the rate of interest on that portion of any Advance
maintained as a Floating Rate Advance will take effect simultaneously with each
change in the Floating Rate. Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined by the Agent as applicable to
such Eurodollar Advance based upon AMS's selections under Section 2.9 and 2.10
and otherwise in accordance with the terms hereof. No Interest Period may end
after the Facility Termination Date.
2.14. Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.9 or 2.10, during the continuance of a Default
or Unmatured Default the Required Lenders may, at their option, by notice to AMS
(which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued as a Eurodollar Advance. During the continuance of a
Default the Required Lenders may, at their option, by notice to AMS (which
notice may be revoked at the option of the Required Lenders notwithstanding any
provision of Section 8.2 requiring unanimous consent of the Lenders to changes
in interest rates), declare that each Loan shall bear interest at the then
applicable rate per annum in effect from time to time plus 2.00% per annum;
provided, that during the continuance of a Default under Section 7.6 or 7.7, the
interest rate set forth above shall be applicable to all Loans without any
election or action on the part of the Agent or any Lender.
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2.15. Method of Payment. All payments of the Obligations hereunder shall be
made, without setoff, deduction, or counterclaim, in immediately available funds
to the Agent at the Agent's address specified pursuant to Article XIII, or at
any other Lending Installation of the Agent specified in writing by the Agent to
AMS, by noon (local time) on the date when due and shall be applied ratably by
the Agent among the Lenders. Each payment delivered to the Agent for the account
of any Lender shall be delivered promptly by the Agent to such Lender in the
same type of funds that the Agent received at its address specified pursuant to
Article XIII or at any Lending Installation specified in a notice received by
the Agent from such Lender. The Agent is hereby authorized to charge the account
of AMS maintained with LaSalle for each payment of principal, interest and fees
payable thereby as it becomes due hereunder.
2.16. Noteless Agreement; Evidence of Indebtedness.
(a) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the Obligations of AMS to such Lender
resulting from each Loan made by such Lender from time to time, including
the amounts of principal and interest payable and paid to such Lender from
time to time hereunder.
(b) The Agent shall also maintain accounts in which it will record (i)
the amount of each Loan made hereunder, the Type thereof and the Interest
Period with respect thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from AMS to each Lender
hereunder and (iii) the amount of any sum received by the Agent hereunder
from AMS and each Lender's share thereof.
(c) The entries maintained in the accounts maintained pursuant to
paragraphs (a) and (b) above shall be prima facie evidence of the existence
and amounts of the Obligations therein recorded; provided, that the failure
of the Agent or any Lender to maintain such accounts or any error therein
shall not in any manner affect the obligation of AMS to repay the
Obligations in accordance with their terms.
(d) Each Lender's Commitment for Revolving Loans shall be evidenced by
a promissory note (a "Revolving Note"). In such event, AMS shall prepare,
execute and deliver to such Lender a Revolving Note payable to the order of
such Lender in a form supplied by the Agent. Thereafter, the Loans
evidenced by such Revolving Note and interest thereon shall at all times
(including after any assignment pursuant to Section 12.3) be represented by
one or more Revolving Notes payable to the order of the payee named therein
or any assignee pursuant to Section 12.3, except to the extent that any
such Lender or assignee subsequently returns any such Revolving Note for
cancellation and requests that such Revolving Loans once again be evidenced
as described in paragraphs (a) and (b) above.
2.17. Telephonic Notices. AMS hereby authorizes the Lenders and the Agent
to extend, convert or continue Advances, effect selections of Types of Advances
and to transfer funds, and the Swing Line Lender to make Swing Line Loans, based
in each case on telephonic notices made by any person or persons the Agent or
any Lender in good faith believes to be acting on behalf of AMS. AMS agrees to
deliver promptly to the Agent a written confirmation,
29
if such confirmation is requested by the Agent or any Lender, of each telephonic
notice signed by an Authorized Officer. If the written confirmation differs in
any material respect from the action taken by the Agent and the Lenders, the
records of the Agent and the Lenders shall govern absent manifest error.
2.18. Interest Payment Dates; Interest and Fee Basis. Interest accrued on
each Floating Rate Loan shall be payable in arrears on each Payment Date,
commencing with the first such date to occur after the date hereof and at
maturity. Interest accrued on each Eurodollar Loan shall be payable on the last
day of its applicable Interest Period, on any date on which the Eurodollar Loan
is prepaid, whether by acceleration or otherwise, and at maturity. Interest
accrued on each Eurodollar Loan having an Interest Period longer than three
months shall also be payable on the last day of each three-month interval during
such Interest Period. Interest and non-use fees shall be calculated for actual
days elapsed on the basis of a 360-day year. Interest shall be payable for the
day an Advance is made but not for the day of any payment on the amount paid if
payment is received prior to noon (local time) at the place of payment. If any
payment of principal of or interest on an Advance shall become due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and, in the case of a principal payment, such extension of time
shall be included in computing interest in connection with such payment.
2.19. Notification of Advances, Interest Rates, Prepayments and Commitment
Reductions. Promptly after receipt thereof, the Agent will notify each Lender of
the contents of each Aggregate Commitment reduction notice, Borrowing Notice,
Conversion/Continuation Notice, and repayment notice received by it hereunder.
The Agent will notify each Lender of the interest rate applicable to each
Eurodollar Advance promptly upon determination of such interest rate and will
give each Lender prompt notice of each change in the Floating Rate.
2.20. Lending Installations. Each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Loans and any Notes issued hereunder shall be deemed held
by each Lender for the benefit of such Lending Installation. Each Lender may, by
written notice to the Agent and AMS in accordance with Article XIII, designate
replacement or additional Lending Installations through which Loans will be made
by it and for whose account Loan payments are to be made.
2.21. Non-Receipt of Funds by the Agent. Unless AMS or a Lender, as the
case may be, notifies the Agent prior to the date on which it is scheduled to
make payment to the Agent of (a) in the case of a Lender, the proceeds of a Loan
or (b) in the case of AMS, a payment of principal, interest or fees to the Agent
for the account of the Lenders, that it does not intend to make such payment,
the Agent may assume that such payment has been made. The Agent may, but shall
not be obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. If such Lender or AMS, as the case
may be, has not in fact made such payment to the Agent, the recipient of such
payment shall, on demand by the Agent, repay to the Agent the amount so made
available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by
30
the Agent until the date the Agent recovers such amount at a rate per annum
equal to (x) in the case of payment by a Lender, the Federal Funds Effective
Rate for such day or (y) in the case of payment by AMS, the interest rate
applicable to the relevant Loan.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the Initial Closing Date, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(a) subjects any Lender or any applicable Lending Installation to any
Taxes, or changes the basis of taxation of payments (other than with
respect to Excluded Taxes) to any Lender in respect of its Eurodollar
Loans, or
(b) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender or
any applicable Lending Installation (other than reserves and assessments
taken into account in determining the interest rate applicable to
Eurodollar Advances), or
(c) imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation of making,
funding or maintaining its Eurodollar Loans or reduces any amount
receivable by any Lender or any applicable Lending Installation in
connection with its Eurodollar Loans, or requires any Lender or any
applicable Lending Installation to make any payment calculated by reference
to the amount of Eurodollar Loans held or interest received by it, by an
amount deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation of making or maintaining its Eurodollar Loans or
Commitment or to reduce the return received by such Lender or applicable Lending
Installation in connection with such Eurodollar Loans or Commitment, then,
within 15 days of demand by such Lender, AMS shall pay such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction in amount received.
3.2. Changes in Capital Adequacy Regulations. If a Lender determines the
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 15 days of demand by such
Lender, AMS shall pay such Lender the amount necessary to
31
compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender determines is attributable to this
Agreement, its Loans or its Commitment to make Loans hereunder (after taking
into account such Lender's policies as to capital adequacy); provided, that if
any Lender fails to notify AMS within 180 days after it obtains actual knowledge
of any event giving rise to the payment of additional amounts under this Section
3.2, then such Lender shall only be entitled to payment for additional amounts
incurred from and after the date which is 180 days prior to the date that such
Lender gives such notice. "Change" means (a) any change after the Initial
Closing Date in the Risk-Based Capital Guidelines or (b) any adoption of or
change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the force
of law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or any Lending Installation
or any corporation controlling any Lender. "Risk-Based Capital Guidelines" means
(x) the risk-based capital guidelines in effect in the United States on the date
of this Agreement, including transition rules, and (y) the corresponding capital
regulations promulgated by regulatory authorities outside the United States
implementing the July 1988 report of the Basle Committee on Banking Regulation
and Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (a) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (b) the interest rate applicable to a Type of Advance does not
accurately reflect the cost of making or maintaining such Advance, then the
Agent shall suspend the availability of the affected Type of Advance and require
any affected Eurodollar Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4.
3.4. Funding Indemnification. If any payment of a Eurodollar Advance occurs
on a date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise, or a Eurodollar Advance is not
made on the date specified by AMS for any reason other than default by the
Lenders, AMS will indemnify each Lender for any loss or cost incurred by it
resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain such Eurodollar
Advance.
3.5. Taxes.
(a) All payments by AMS to or for the account of any Lender or the
Agent hereunder or under any Note shall be made free and clear of and
without deduction for any and all Taxes. If AMS shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable
to additional sums payable under this Section 3.5) such Lender or the Agent
(as the case may be)
32
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) AMS shall make such deductions, (iii) AMS shall pay
the full amount deducted to the relevant authority in accordance with applicable
law and (iv) AMS shall furnish to the Agent the original copy of a receipt
evidencing payment thereof within 30 days after such payment is made.
(b) In addition, AMS hereby agrees to pay any present or future stamp
or documentary taxes and any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under any
Note or from the execution or delivery of, or otherwise with respect to,
this Agreement or any Note ("Other Taxes").
(c) AMS hereby agrees to indemnify the Agent and each Lender for the
full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed on amounts payable under this Section 3.5)
paid by the Agent or such Lender and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto. Payments
due under this indemnification shall be made within 30 days of the date the
Agent or such Lender makes demand therefor pursuant to Section 3.6.
(d) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees that
it will, not less than ten Business Days after the date of this Agreement,
(i) deliver to each of AMS and the Agent two duly completed copies of
United States Internal Revenue Service Form 1001 or 4224, certifying in
either case that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal
income taxes, and (ii) deliver to each of AMS and the Agent a United States
Internal Revenue Form W-8 or W-9, as the case may be, and certify that it
is entitled to an exemption from United States backup withholding tax. Each
Non-U.S. Lender further undertakes to deliver to each of AMS and the Agent
(x) renewals or additional copies of such form (or any successor form) on
or before the date that such form expires or becomes obsolete, and (y)
after the occurrence of any event requiring a change in the most recent
forms so delivered by it, such additional forms or amendments thereto as
may be reasonably requested by AMS or the Agent. All forms or amendments
described in the preceding sentence shall certify that such Lender is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent
such Lender from duly completing and delivering any such form or amendment
with respect to it and such Lender advises AMS and the Agent that it is not
capable of receiving payments without any deduction or withholding of
United States federal income tax.
(e) For any period during which a Non-U.S. Lender has failed to
provide AMS with an appropriate form pursuant to clause (d) above (unless
such failure is due to a change in treaty, law or regulation, or any change
in the interpretation or administration thereof by any governmental
authority, occurring subsequent to the date on which a form originally was
required to be provided), such Non-U.S. Lender shall not be entitled to
indemnification under
33
this Section 3.5 with respect to Taxes imposed by the United States;
provided, that, should a Non-U.S. Lender which is otherwise exempt from or
subject to a reduced rate of withholding tax become subject to Taxes
because of its failure to deliver a form required under clause (d) above,
AMS shall take such steps as such Non-U.S. Lender shall reasonably request
to assist such Non-U.S. Lender to recover such Taxes.
(f) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall
deliver to AMS (with a copy to the Agent), at the time or times prescribed
by applicable law, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made
without withholding or at a reduced rate.
3.6. Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of AMS to such Lender
under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of Eurodollar
Advances under Section 3.3, so long as such designation is not, in the judgment
of such Lender, disadvantageous to such Lender. Each Lender shall deliver a
written statement of such Lender to AMS (with a copy to the Agent) as to the
amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such written statement
shall set forth in reasonable detail the calculations upon which such Lender
determined such amount and shall be final, conclusive and binding on AMS in the
absence of manifest error. Determination of amounts payable under such Sections
in connection with a Eurodollar Loan shall be calculated as though each Lender
funded its Eurodollar Loan through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the
Eurodollar Rate applicable to such Loan, whether in fact that is the case or
not. Unless otherwise provided herein, the amount specified in the written
statement of any Lender shall be payable on demand after receipt by AMS of such
written statement. The obligations of AMS under Sections 3.1, 3.2, 3.4 and 3.5
shall survive payment of the Obligations and termination of this Agreement.
3.7. Substitution of Lender. Upon the receipt by AMS from any Lender (an
"Affected Lender") of a claim for compensation under Section 3.1, 3.2 or 3.5 or
a notice in accordance with Section 3.3 regarding the unavailability of a Type
of Advance, AMS may: (a) request the Affected Lender to use commercially
reasonable efforts to obtain a replacement bank or other entity satisfactory to
AMS to acquire and assume all or a ratable part of all of such Affected Lender's
Loans and Commitment at the face amount thereof (a "Replacement Lender"); (b)
request one or more of the other Lenders to acquire and assume all or part of
such Affected Lender's Loans and Commitment (which request each such other
Lender may decline or agree to in its sole discretion); or (c) designate a
Replacement Lender. Any such designation of a Replacement Lender under clause
(a) or (c) shall be subject to the prior written consent of the Agent (which
consent shall not unreasonably be withheld). Any transfer of Loans or Commitment
pursuant to this Section shall be made in accordance with Section 12.3 and
Section 3.4, if applicable.
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ARTICLE IV
CONDITIONS PRECEDENT
4.1. Effectiveness. This Agreement shall not be effective unless AMS shall
have furnished to the Agent with sufficient copies for the Lenders:
(a) Good Standing Certificates. Copies of a certificate of existence
(or its equivalent) for each of AMS, Holdings and UWLIC, each certified by
the appropriate governmental officer in its jurisdiction of incorporation.
(b) Resolutions. Copies, certified by the Secretary or Assistant
Secretary of each of AMS and Holdings of its Board of Directors'
resolutions authorizing the transactions described herein and the entry
into the Loan Documents to which AMS or Holdings, as applicable, is a party
and identifying by name and title the Authorized Officers of AMS or
Holdings authorized to sign the Loan Documents to which AMS or Holdings, as
applicable, is a party, and, in respect of AMS, to make borrowings
hereunder.
(c) Secretary's Certificate. Incumbency certificates, executed by the
Secretary or Assistant Secretary of each of AMS and Holdings, which shall
identify by name and title and bear the signatures of the Authorized
Officers identified in the resolutions of AMS or Holdings, respectively,
upon which certificates the Agent and the Lenders shall be entitled to rely
until informed of any change in writing by AMS.
(d) Officer's Certificate. A certificate, dated the date of this
Agreement, signed by an Authorized Officer of AMS, in form and substance
satisfactory to the Agent, to the effect that: (i) on such date (both
before and after giving effect to the making of the Loans hereunder, the
execution and delivery of the Guaranty Agreement and the Pledge Agreements
and the consummation of the other transactions contemplated hereby and by
the other Loan Documents (collectively, the "Closing Transactions")) no
Default or Unmatured Default has occurred and is continuing; (ii) no
injunction or temporary restraining order which would prohibit the making
of the Loans or the consummation of any of the Closing Transactions, or
other litigation which could reasonably be expected to have a Material
Adverse Effect, is pending or, to the best of such Person's knowledge,
threatened; (iii) all orders, consents, approvals, licenses, authorizations
or validations of, or filings, recordings or registrations with, or
exemptions by, any governmental or public body or authority, or any
subdivision thereof, required to make or consummate the Closing
Transactions have been or, prior to the time required, will have been,
obtained, given, filed or taken and are or will be in full force and effect
(or AMS or Holdings, as applicable, have obtained effective relief with
respect to the application thereof) and all applicable waiting periods have
expired; (iv) each of the representations and warranties set forth in
Article V of this Agreement is true and correct on and as of such date; (v)
since the date of the most recent Financial Statements (as hereinafter
defined) delivered to Agent, no event or change has occurred that has
caused or evidences a Material Adverse Effect; and (vi) the financial and
other information disclosed in AMS's 1999 year-end 10k financial statements
is not materially different than the information disclosed in AMS's press
release dated February 11, 2000, regarding such year-end information and
numbers.
35
(e) Legal Opinion. A written opinion of Xxxxxxx & Xxxxx, counsel to
AMS and the Guarantors, addressed to the Agent and the Lenders in form and
substance acceptable to the Agent and its counsel.
(f) Letters of Direction. Written money transfer instructions with
respect to the Loans in form and substance acceptable to the Agent and its
counsel addressed to the Agent and signed by an Authorized Officer,
together with such other related money transfer authorizations as the Agent
may have reasonably requested.
(g) Credit Agreement. Executed originals of this Agreement in form and
substance satisfactory to the Lenders.
(h) Notes. Executed originals of such Notes as may be requested by a
Lender pursuant to Section 2.11 or 2.16 payable to the order of each such
requesting Lender.
(i) Guaranty Agreement. An executed original of the Guaranty Agreement
in form and substance satisfactory to the Lenders.
(j) Pledge Agreements. Executed originals of the Pledge Agreements in
form and substance satisfactory to the Lenders together with:
(1) all of the pledged securities referred to therein, endorsed
in blank or together with undated stock powers executed in blank, as
appropriate;
(2) all regulatory approvals required in connection with the
initial pledge of the stock of each Material i Insurance Subsidiary
shall have been obtained and remain in full force and effect; and
(3) evidence that all other actions necessary or, in the
reasonable opinion of the Agent, desirable to perfect and protect the
security interests purported to be created by the Pledge Agreements
have been taken or will be taken promptly after the Initial Closing
Date.
(k) Other Loan Documents. Executed originals of such other Loan
Documents in form and substance satisfactory to the Lenders, together with
all schedules, exhibits, certificates, instruments, opinions, documents and
financial statements required to be delivered pursuant hereto and thereto,
also in form and substance satisfactory to the Lenders.
(l) Solvency Certificate. A written solvency certificate from the
chief financial officer of AMS in form and content satisfactory to the
Agent, dated the date of this Agreement, with respect to the value,
solvency and other factual information of, or relating to, as the case may
be, AMS and its Subsidiaries, taken as a whole, both before and after
giving effect to the Closing Transactions.
36
(m) Regulatory Matters. Receipt of any required regulatory approvals
from any Governmental Authority with respect to the Closing Transactions.
(n) Indebtedness. On the Initial Closing Date and after giving effect
to the consummation of the transactions described herein, the only
Indebtedness of AMS and its Subsidiaries shall consist of (a) the
Obligations incurred pursuant to the Loan Documents and (b) Indebtedness
reflected on Schedule 5.28 (other than Indebtedness in a principal amount
not exceeding $50,000 for a single item of Indebtedness and $100,000 in the
aggregate for all such Indebtedness listed).
(o) Payment of Fees and Expenses. All costs, fees and expenses
(including, without limitation, reasonable legal fees and expenses), and
all other compensation contemplated by this Agreement or the other Loan
Documents, due to the Agent shall have been paid to the extent due.
(p) Insurance. The Agent shall have received evidence of insurance
complying with the terms hereof for the business and properties of AMS and
its Subsidiaries, in form and substance reasonably satisfactory to the
Agent.
(q) Other. Such other documents as the Agent, any Lender or their
counsel may have reasonably requested including information regarding
litigation, tax, accounting, labor, insurance, pension liabilities (actual
or contingent), real estate leases, material contracts, debt agreements,
property ownership, and contingent liabilities of AMS and its Subsidiaries.
4.2. Each Advance and Swing Line Loan. The Lenders shall not be required to
make any Advance (other than an Advance that, after giving effect thereto and to
the application of the proceeds thereof, does not increase the aggregate amount
of outstanding Advances) and the Swing Line Lender shall not be required to make
any Swing Line Loan, unless on the applicable Borrowing Date:
(a) There exists no Default or Unmatured Default.
(b) The representations and warranties contained in Article V are
true and correct in all material respects as of such Borrowing
Date except to the extent any such representation or warranty is
stated to relate solely to an earlier date, in which case such
representation or warranty shall have been true and correct on
and as of such earlier date.
(c) All legal matters incident to the making of such Advance or Swing
Line Loan shall be satisfactory to the Lenders and their counsel.
Each Borrowing Notice with respect to each such Advance and each request
for a Swing Line Loan shall constitute a representation and warranty by AMS that
the conditions contained in Section 4.2(a) and (b) have been satisfied. Any
Lender may require a duly completed compliance certificate in substantially the
form of Exhibit A as a condition to making an Advance.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
AMS represents and warrants to the Lenders that, both before and after
giving effect to the Closing Transactions:
5.1. Existence and Standing. Each of AMS and each Subsidiary is a
corporation, partnership (in the case of Subsidiaries only) or limited liability
company duly and properly incorporated or organized, as the case may be, validly
existing and (to the extent such concept applies to such entity) in good
standing under the laws of its jurisdiction of incorporation or organization and
has all requisite authority to conduct its business in each jurisdiction in
which its business is conducted, except where the failure to be so qualified,
licensed or authorized could not reasonably be expected to have a Material
Adverse Effect.
5.2. Authorization and Validity. Each of AMS and Holdings has the power and
authority and legal right to execute and deliver the Loan Documents to which it
is a party and to perform its obligations thereunder. The execution and delivery
by AMS and Holdings of the Loan Documents to which it is a party and the
performance of its obligations thereunder have been duly authorized by proper
corporate proceedings, and the Loan Documents to which each such Person is a
party constitute legal, valid and binding obligations of such Person enforceable
against such Person in accordance with their terms, except as enforceability may
be limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution and delivery by
any of AMS or Holdings of the Loan Documents to which it is a party, the
consummation of the Closing Transactions nor compliance with the provisions of
the Loan Documents will, or at the relevant time did, violate (a) any law, rule,
regulation (including Regulations T, U and X), order, writ, judgment,
injunction, decree or award binding on AMS or any of its Subsidiaries, (b) AMS's
or any of its Subsidiaries' articles or certificate of incorporation,
partnership agreement, certificate of partnership, articles or certificate of
organization, by-laws, or operating or other management agreement, as the case
may be, or (c) the provisions of any indenture, instrument or agreement to which
AMS or any of its Subsidiaries is a party or is subject, or by which it, or its
Property, is bound, or conflict with or constitute a default thereunder, or
result in, or require, the creation or imposition of any Lien in, of or on the
Property of AMS or any Subsidiary pursuant to the terms of any such indenture,
instrument or agreement, except for any violation of any such law, rule,
regulation, order, writ, judgment, injunction, decree, award, indenture,
instrument or agreement that could not reasonably be expected to have a Material
Adverse Effect. Except as set forth in Schedule 5.3 hereto, no order, consent,
adjudication, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, or other action in respect of
any Governmental Authority, or any subdivision thereof, or any other Person
(including without limitation the stockholders of any Person) is required to be
obtained by AMS
38
or any Subsidiary in connection with the execution and delivery of the Loan
Documents, the borrowings under this Agreement, the payment and performance by
AMS of the Obligations, the execution and delivery of the Guaranty Agreement and
the Pledge Agreements or the legality, validity, binding effect or
enforceability of any of the Loan Documents or the consummation of any of the
Closing Transactions.
5.4. Financial Statements. AMS has heretofore furnished to the Agent and
each of the Lenders (a) the December 31, 1998 audited consolidated financial
statements of AMS and its Subsidiaries, (b) the unaudited consolidated financial
statements of AMS and its Subsidiaries through September 30, 1999, (c) the
December 31, 1998 audited Annual Statement of each Material Insurance Subsidiary
and (d) the September 30, 1999 Quarterly Statement of each Material Insurance
Subsidiary (collectively, the "Financial Statements"). Each of the Financial
Statements was prepared in accordance with GAAP or statutory accounting
practices, as applicable, and (in the case of the Financial Statements prepared
in accordance with GAAP) fairly presents the consolidated financial condition
and operations of AMS and its Subsidiaries at such dates and the consolidated
results of their operations for the respective periods then ended (except, in
the case of such unaudited statements, for normal year-end audit adjustments).
5.5. Material Adverse Change. Since September 30, 1999, there has been no
change in the business, Property, prospects, performance, condition (financial
or otherwise) or operations of AMS and its Subsidiaries which could reasonably
be expected to have a Material Adverse Effect.
5.6. Taxes. AMS and each of its Subsidiaries have filed all United States
federal tax returns and all other tax returns which are required to be filed and
have paid all taxes due pursuant to said returns or pursuant to any assessment
received by AMS or any such Subsidiary, except such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been provided in
accordance with Agreement Accounting Principles or SAP, as applicable, and as to
which no Lien exists. The United States income tax returns of AMS and its
Subsidiaries have been audited by the Internal Revenue Service through the
fiscal year ended December 31, 1987. No tax liens have been filed and no claims
are being asserted with respect to any such taxes. The charges, accruals and
reserves on the books of AMS and its Subsidiaries in respect of any taxes or
other governmental charges are in accordance with Agreement Accounting
Principles or SAP, as applicable.
5.7. Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting AMS or
any of its Subsidiaries which could reasonably be expected to have a Material
Adverse Effect or which seeks to prevent, enjoin or delay the making of any
Loans or the consummation of any other Closing Transaction. Other than any
liability incident to any litigation, arbitration or proceeding that could not
reasonably be expected to have a Material Adverse Effect, none of AMS or any of
its Subsidiaries has any material contingent obligations not provided for or
disclosed in the Financial Statements.
39
5.8. Subsidiaries. Schedule 5.8 contains an accurate list of all
Subsidiaries of AMS as of the date of this Agreement, setting forth their
respective jurisdictions of organization and the percentage of their respective
capital stock or other ownership interests owned by AMS or other Subsidiaries.
All of the issued and outstanding shares of capital stock or other ownership
interests of such Subsidiaries have been (to the extent such concepts are
relevant with respect to such ownership interests) duly authorized and issued
and are fully paid and non-assessable.
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans do not in
the aggregate exceed $250,000. Neither AMS nor any other member of the
Controlled Group maintains, or is obligated to contribute to, any Multiemployer
Plans. Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan, neither AMS nor any other member of the Controlled Group
has withdrawn from any Plan or initiated steps to do so, and no steps have been
taken to reorganize or terminate any Plan.
5.10. Accuracy of Information. No information, exhibit or report furnished
by AMS or any of its Subsidiaries to the Agent or to any Lender in connection
with the negotiation of, or compliance with, the Loan Documents contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein not misleading.
5.11. Federal Reserve Regulations. Neither AMS nor any of its Subsidiaries
is engaged, directly or indirectly, principally, or as one of its important
activities, in the business of extending, or arranging for the extension of,
credit for the purpose of purchasing or carrying Margin Stock. No part of the
proceeds of any Loan will be used in a manner which would violate, or result in
a violation of, Regulation T, Regulation U or Regulation X. Neither the making
of any Loan hereunder nor the use of the proceeds thereof will violate or be
inconsistent with the provisions of Regulation T, Regulation U or Regulation X.
Following the application of the proceeds of the Loans, less than 25% of the
value (as determined by any reasonable method) of the assets of AMS and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder taken as a whole have been, and will continue to be,
represented by Margin Stock.
5.12. Material Agreements. Neither AMS nor any Subsidiary is a party to any
agreement or instrument or subject to any charter or other corporate restriction
which could reasonably be expected to have a Material Adverse Effect. Neither
AMS nor any Subsidiary is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in (a)
any agreement to which it is a party, which default could reasonably be expected
to have a Material Adverse Effect or (b) any agreement or instrument evidencing
or governing any Material Indebtedness.
5.13. Compliance With Laws. AMS and its Subsidiaries have complied with all
applicable statutes, rules, regulations, orders and restrictions of any domestic
or foreign government or any instrumentality or agency thereof having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property except for any failure to
40
comply with any of the foregoing which could not reasonably be expected to have
a Material Adverse Effect.
5.14. Ownership of Properties. On the date of this Agreement, AMS and its
Subsidiaries have good title, free of all Liens other than Permitted Liens, to
all of the Property and assets reflected in AMS's most recent consolidated
financial statements provided to the Agent as owned by AMS and its Subsidiaries.
5.15. Plan Assets; Prohibited Transactions. AMS is not an entity deemed to
hold "plan assets" within the meaning of 29 C.F.R. ss. 2510.3-101 of an employee
benefit plan (as defined in Section 3(3) of ERISA) which is subject to Title I
of ERISA or any plan (within the meaning of Section 4975 of the Code), and
neither the execution of this Agreement nor the making of Loans hereunder gives
rise to a prohibited transaction within the meaning of Section 406 of ERISA or
Section 4975 of the Code.
5.16. Environmental Matters. In the ordinary course of its business, the
officers of AMS consider the effect of Environmental Laws on the business of AMS
and its Subsidiaries, in the course of which they identify and evaluate
potential risks and liabilities accruing to AMS due to Environmental Laws. On
the basis of this consideration, AMS has concluded that Environmental Laws
cannot reasonably be expected to have a Material Adverse Effect. Neither AMS nor
any of its Subsidiaries has received any notice to the effect that its
operations are not in material compliance with any of the requirements of
applicable Environmental Laws or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.
5.17. Investment Company Act. Neither AMS nor any Subsidiary is an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.18. Public Utility Holding Company Act. Neither AMS nor any Subsidiary is
a "holding company" or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
5.19. Insurance. AMS and its Subsidiaries maintain insurance on their
Property with such companies, in such amounts and covering such risks as is, in
each case, consistent with sound business practice.
5.20. Solvency. Immediately after the consummation of the Closing
Transactions and immediately following the making of each Loan, if any, made on
the date hereof and after giving effect to the application of the proceeds of
such Loans, (a) the fair value of the assets of AMS and its Subsidiaries on a
consolidated basis, at a fair valuation, will exceed the debts and liabilities,
subordinated, contingent or otherwise, of AMS and its Subsidiaries on a
consolidated
41
basis; (b) the present fair saleable value of the assets of AMS and its
Subsidiaries on a consolidated basis will be greater than the amount that will
be required to pay the probable liability of AMS and its Subsidiaries on a
consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (c) AMS and its Subsidiaries on a consolidated basis will be able to
pay their debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) AMS and its
Subsidiaries on a consolidated basis will not have unreasonably small capital
with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the date
hereof.
5.21. Year 2000. AMS has made a full and complete assessment of the Year
2000 Issues. Based on such assessment, AMS does not reasonably anticipate that
Year 2000 Issues will have a Material Adverse Effect.
5.22. Insurance Licenses. Schedule 5.22 hereto lists the jurisdiction of
domicile of each Material Insurance Subsidiary, the line or lines of insurance
in which each Material Insurance Subsidiary is engaged and the jurisdictions in
which each Material Insurance Subsidiary holds a License and is authorized to
transact insurance business, in each case as of the date of this Agreement. No
License, the loss of which could reasonably be expected to have a Material
Adverse Effect, is the subject of a proceeding for suspension or revocation. To
AMS's knowledge, there is no sustainable basis for such suspension or
revocation, and no such suspension or revocation has been threatened by any
Governmental Authority. To AMS's knowledge, no Material Insurance Subsidiary has
received written notice from any Governmental Authority that it is deemed to be
"commercially domiciled" for insurance regulatory purposes in any jurisdiction
other than that indicated on Schedule 5.22.
5.23. Reinsurance. Schedule 5.23 lists all ceded or assumed reinsurance
agreements to which any Material Insurance Subsidiary is, as of the date of this
Agreement, a party, which are currently in force, and under which there is
liability by either party to the agreement (collectively, the "Existing
Reinsurance Agreements"). Each of the Existing Reinsurance Agreements is in full
force and effect, is valid and binding in all material respects in accordance
with its terms, and, as of the date hereof, no Material Insurance Subsidiary
has, to AMS's knowledge, received notice (other than provisional notices of
cancellation received in the ordinary course of business) that any other party
to an in-force Existing Reinsurance Agreement will cancel or not renew such
agreement, which cancellation or nonrenewal could reasonably be expected to have
a Material Adverse Effect. AMS has no knowledge as of the date hereof that any
amount recoverable by any Material Insurance Subsidiary pursuant to any Existing
Reinsurance Agreement is not fully collectible in due course. To the knowledge
of AMS, no Material Insurance Subsidiary is in default in any material respect
as to any Existing Reinsurance Agreement. Except as disclosed in Schedule 5.23,
each Material Insurance Subsidiary is entitled to take full credit in its
statutory financial statements for ceded reinsurance under the Existing
Reinsurance Agreements pursuant to applicable insurance laws. Except as
disclosed in Schedule 5.23, there is no claim under any Existing Reinsurance
Agreement in excess of $100,000 which is disputed by any other party to such
agreement.
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5.24. Reserves. Except as set forth on Schedule 5.24, each reserve and
other material liability amount in respect of the insurance business, including,
without limitation, material reserve and other material liability amounts in
respect of insurance policies of each Material Insurance Subsidiary, established
or reflected in the SAP Financial Statements for the year ended December 31,
1998 of such Material Insurance Subsidiary, was determined in accordance with
generally accepted actuarial standards consistently applied, was fairly stated
in accordance with sound actuarial principles and was in compliance with the
requirements of the insurance laws, rules and regulations of its state of
domicile as of the date thereof. Each Material Insurance Subsidiary owns assets
that qualify as admitted assets under applicable law in an amount at least equal
to the sum of all such reserves and liability amounts and its minimum Statutory
Capital and Surplus as required by the insurance laws, rules and regulations of
its state of domicile.
5.25. UWLIC Capital and Surplus. As of the date of this Agreement, UWLIC
has a Statutory Capital and Surplus of at least $140,000,000.
5.26. Defaults. No Default or Unmatured Default has occurred and is
continuing.
5.27. Certain Fees. No broker's or finder's fee or commission was, is or
will be payable by AMS or any Subsidiary with respect to any of the transactions
contemplated by this Agreement or any other Closing Transaction. AMS hereby
agrees to indemnify the Agent and the Lenders against and agrees that it will
hold each of them harmless from any claim, demand or liability for broker's or
finder's fees or commissions alleged to have been incurred by AMS or any of its
Subsidiaries in connection with any of the transactions contemplated by this
Agreement or any other Closing Transaction and any expenses (including, without
limitation, attorneys' fees and time charges of attorneys for the Agent or any
Lender, which attorneys may be employees of the Agent or any Lender) arising in
connection with any such claim, demand or liability. No other similar fee or
commissions will be payable by AMS or any Subsidiary for any other services
rendered to AMS or any Subsidiary ancillary to any of the transactions
contemplated by this Agreement or any other Closing Transaction.
5.28. Indebtedness. Attached hereto as Schedule 5.28 is a complete and
correct list of all Indebtedness of AMS and its Subsidiaries outstanding on the
date of this Agreement (other than Indebtedness in a principal amount not
exceeding $50,000 for a single item of Indebtedness and $100,000 in the
aggregate for all such Indebtedness listed), showing the aggregate principal
amount which was outstanding on such date after giving effect to the Closing
Transactions.
5.29. Employee Controversies. There are no strikes, work stoppages or
controversies pending or threatened between AMS or any of its Subsidiaries and
any of its employees, other than employee grievances arising in the ordinary
course of business, which, in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
5.30. Dividends. No Insurance Subsidiary is subject to any regulatory
prohibition regarding the declaration or payment of dividends that is not
generally applicable to all insurance companies which are domiciled in the same
jurisdiction and are engaged in the same line of business as such Insurance
Subsidiary.
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5.31. Security. Each Pledge Agreement is effective to create and give the
Agent, for the benefit of the Lenders, as security for the repayment of the
obligations secured thereby, a legal, valid and perfected first priority Lien
upon and security interest in the capital stock pledged thereunder, which is
enforceable in accordance with the terms of such Pledge Agreement.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. AMS will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with GAAP, consistently applied, and furnish to the Lenders:
(a) As soon as practicable and in any event within 90 days after the
close of each of its Fiscal Years, an unqualified (except for
qualifications relating to changes in accounting principles or practices
reflecting changes in GAAP and required or approved by AMS's independent
certified public accountants) audit report certified by independent
certified public accountants acceptable to the Lenders, prepared in
accordance with Agreement Accounting Principles on a consolidated and
consolidating basis (consolidating statements need not be certified by such
accountants) for itself and its Subsidiaries, including balance sheets as
of the end of such period and related statements of income, retained
earnings and cash flows, accompanied by (i) any management letter prepared
by said accountants, (ii) a certificate of said accountants that, in the
course of their examination necessary for their certification of the
foregoing, they have obtained no knowledge of any Default or Unmatured
Default, or if, in the opinion of such accountants, any Default or
Unmatured Default shall exist, stating the nature and status thereof, and
(iii) a letter from said accountants addressed to the Lenders acknowledging
that the Lenders are extending credit in primary reliance on such financial
statements and authorizing such reliance.
(b) As soon as practicable and in any event within 60 days after the
close of each Fiscal Quarter, for itself and its Subsidiaries, consolidated
and consolidating unaudited balance sheets as at the close of each such
period and consolidated and consolidating statements of income, retained
earnings and cash flows for the period from the beginning of such fiscal
year to the end of such quarter, all prepared in accordance with Agreement
Accounting Principles and certified by its chief financial officer.
(c) (i) Upon the earlier of (A) fifteen days after the regulatory
filing date or (B) March 15 of each Fiscal Year of each Material Insurance
Subsidiary, copies of the unaudited Annual Statement of such Material
Insurance Subsidiary, certified by the chief financial officer of such
Material Insurance Subsidiary, all such statements to be prepared in
accordance with
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SAP consistently applied throughout the periods reflected therein and (ii)
no later than each June 15, copies of annual financial statements of such
Material Insurance Subsidiary, prepared in accordance with SAP, audited and
certified by independent certified public accountants of recognized
national standing.
(d) Upon the earlier of (i) ten (10) days after the regulatory filing
date or (ii) 60 days after the close of each of the first three Fiscal
Quarters of each Fiscal Year of each Material Insurance Subsidiary, copies
of the Quarterly Statement of each of the Material Insurance Subsidiaries,
certified by the chief financial officer of such Material Insurance
Subsidiary, all such statements to be prepared in accordance with SAP
consistently applied through the period reflected herein.
(e) Promptly and in any event within ten days after (i) learning
thereof, notification of any changes after the date hereof in the rating
given by A.M. Best & Co. in respect of any Insurance Subsidiary and (ii)
receipt thereof, copies of any ratings analysis by A.M. Best & Co. relating
to any Insurance Subsidiary.
(f) As soon as available and in any event within 90 days after the
close of each Fiscal Year, a "Statement of Actuarial Opinion" and
"Management Discussion and Analysis" including review of year-end loss
reserves for each Material Insurance Company (prepared in accordance with
SAP) for such Fiscal Year by an actuary reasonably acceptable to Agent (who
may be an employee of American Medical Security, Inc.) as filed with the
applicable regulatory insurance authority in compliance with the
requirements thereof (or a report containing equivalent information for any
Material Insurance Company not so required to file the foregoing with the
applicable regulatory insurance authority).
(g) Copies of any other actuarial certificates prepared with respect
to any Material Insurance Subsidiary, promptly after the receipt thereof.
(h) As soon as available, but in any event within 90 days after the
beginning of each Fiscal Year of AMS, a copy of the plan and forecast
(including a projected consolidated and consolidating balance sheet, income
statement and funds flow statement) of AMS and its Subsidiaries for such
Fiscal Year.
(i) Together with the financial statements required by clauses (a) and
(b) above, a compliance certificate in substantially the form of Exhibit A
signed by its chief financial officer showing the calculations necessary to
determine compliance with this Agreement and stating that no Default or
Unmatured Default exists, or if any Default or Unmatured Default exists,
stating the nature and status thereof.
(j) Within 270 days after the close of each Fiscal Year, a statement
of the Unfunded Liabilities of each Single Employer Plan, if any, certified
as correct by an actuary enrolled under ERISA.
45
(k) As soon as possible and in any event within 10 days after AMS
knows that any Reportable Event has occurred with respect to any Plan, a
statement, signed by the chief financial officer of AMS, describing said
Reportable Event and the action proposed to be taken with respect thereto,
and as soon as possible and in any event within ten (10) days after
learning thereof, notification of any Lien imposed by the PBGC or the IRS
on the assets of any member of the Controlled Group in respect of any Plan
maintained by any such member (or any other employee pension benefit plan
as to which any such member may be liable) which, together with all such
Liens, relates to liabilities in excess of ten percent of the net worth
(determined according to GAAP and without reduction for any reserve for
such liabilities) of AMS and its Subsidiaries.
(l) As soon as possible and in any event within 10 days after receipt
by AMS or any of its Subsidiaries, a copy of (i) any notice or claim to the
effect that AMS or any of its Subsidiaries is or may be liable to any
Person as a result of the release by AMS, any of its Subsidiaries or any
other Person of any toxic or hazardous waste or substance into the
environment, and (ii) any notice alleging any violation of any federal,
state or local environmental, health or safety law or regulation by AMS or
any of its Subsidiaries which could, in the case of either clause (i) or
(ii), reasonably be expected to have a Material Adverse Effect.
(m) Promptly upon the furnishing thereof to the shareholders of AMS
copies of all financial statements, reports and proxy statements so
furnished.
(n) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which
AMS or any of its Subsidiaries files with the Securities and Exchange
Commission, the National Association of Securities Dealers, any securities
exchange, the NAIC or any insurance commission or department or analogous
Governmental Authority (including without limitation, any filing made by
AMS or any Subsidiary pursuant to any insurance holding company act or
related rules or regulations), but excluding routine or non-material
filings with the NAIC, any insurance commissioner or department or
analogous Governmental Authority (such routine or non-material filings to
include, but not be limited to, (i) new or renewal applications for
licensure as a third party administrator, managing general agent, agent,
agency, adjuster, multiple employer trust, multiple employer welfare
arrangement, managed care organization, utilization review agent or any
related filing, (ii) Form B or Form C filings, (iii) Form D filings made in
the ordinary course of business, (iv) applications for a Certificate of
Authority to act as a foreign life, health or accident insurer, (v)
Secretary of State or County Clerk filings, or (vi) State Department of
Commerce or Department of Financial Institution filings including but not
limited to UCC filings or renewals.
(o) Promptly and in any event within ten (10) days after learning
thereof, notification of (i) any tax assessment, demand, notice of proposed
deficiency or notice of deficiency received by AMS or any other
Consolidated Person or (ii) the filing of any tax Lien or commencement of
any judicial proceeding by or against any such Consolidated Person, if any
such assessment, demand, notice, Lien or judicial proceeding (or all such
assessments, demands, notices, Liens and judicial proceedings, in the
aggregate) relates to tax liabilities in excess of ten percent (10%) of the
net worth (determined according to generally accepted accounting standards
46
and without reduction for any reserve for such liabilities) of AMS and its
Subsidiaries taken as a whole.
(p) Such other information (including, without limitation, the annual
Best's Advance Report Service report prepared with respect to each
Insurance Subsidiary rated by A.M. Best & Co.) as the Agent or any Lender
may from time to time reasonably request.
6.2. Use of Proceeds. AMS will, and will cause each Subsidiary to, use the
proceeds of the Loans to meet the general corporate needs of AMS and its
Subsidiaries and to repay in full the outstanding Indebtedness of AMS and its
Subsidiaries, and each of them, other than the Indebtedness reflected on
Schedule 5.28 (or Indebtedness in a principal amount not exceeding $50,000 for a
single item of Indebtedness and $100,000 in the aggregate for all such
Indebtedness) and approved by Agent. AMS will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Loans to purchase or carry any
"margin stock" (as defined in Regulation U) or to finance the Purchase of any
Person which has not been approved and recommended by the Board of Directors (or
functional equivalent thereof) of such Person.
6.3. Notice of Default. AMS will, and will cause each Subsidiary to, give
prompt notice in writing to the Lenders of (a) the occurrence of any Default or
Unmatured Default, (b) the occurrence of any other development, financial or
otherwise (including, without limitation, developments with respect to Year 2000
Issues), relating specifically to AMS or any of its Subsidiaries (and not of a
general economic or political nature) which could reasonably be expected to have
a Material Adverse Effect, (c) the receipt of any notice from any Governmental
Authority of the expiration without renewal, revocation or suspension of, or the
institution of any proceedings to revoke or suspend, any License now or
hereafter held by any Insurance Subsidiary which is required to conduct
insurance business in compliance with all applicable laws and regulations and
the expiration, revocation or suspension of which could reasonably be expected
to have a Material Adverse Effect, (d) the receipt of any notice from any
Governmental Authority of the institution of any disciplinary proceedings
against or in respect of any Insurance Subsidiary, or the issuance of any order,
the taking of any action or any request for an extraordinary audit for cause by
any Governmental Authority which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect, (e) any judicial or administrative
order limiting or controlling the insurance business of any Insurance Subsidiary
(and not the insurance industry generally) which has been issued or adopted and
which has had, or could reasonably be expected to have, a Material Adverse
Effect, or (f) the commencement of any litigation which could reasonably be
expected to create a Material Adverse Effect.
6.4. Conduct of Business. AMS will, and will cause each Subsidiary to, (a)
carry on and conduct its business only in substantially the same manner and in
substantially the same fields of enterprise as it is presently conducted, (b)
with respect to each Insurance Subsidiary, only engage in the life, accident and
health insurance business, (c) do all things necessary to remain duly
incorporated, validly existing and in good standing in its jurisdiction of
incorporation and its jurisdiction of domicile and maintain all requisite
authority to conduct its business in each other jurisdiction in which its
business is conducted, and (d) do all things necessary to renew, extend and
continue in effect all Licenses which may at any time and from
47
time to time be necessary for any Insurance Subsidiary to operate its insurance
business in compliance with all applicable laws and regulations; provided, that
any Insurance Subsidiary may withdraw from one or more states (other than its
state of domicile) as an admitted insurer if such withdrawal is determined by
such Insurance Subsidiary's Board of Directors to be in the best interest of
such Insurance Subsidiary and could not reasonably be expected to have a
Material Adverse Effect. No Material Insurance Subsidiary shall change its state
of domicile or incorporation without the prior written consent of the Required
Lenders, which shall not unreasonably be withheld or delayed. Each Wholly-Owned
Subsidiary in existence as of the date of this Agreement shall continue to be a
Wholly-Owned Subsidiary; provided, that all of the capital stock of any
Subsidiary (other than UWLIC) may be sold in compliance with Section 6.13
hereof.
6.5. Taxes. AMS will, and will cause each Subsidiary to, timely file
complete and correct United States federal and applicable foreign, state and
local tax returns required by law and pay when due all taxes, assessments and
governmental charges and levies upon it or its income, profits or Property,
except those which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside in accordance
with Agreement Accounting Principles.
6.6. Insurance. AMS will, and will cause each Subsidiary to, maintain with
financially sound and reputable insurance companies insurance on all their
Property in such amounts and covering such risks as is consistent with sound
business practice, and AMS will furnish to the Agent or any Lender upon request
full information as to the insurance carried.
6.7. Compliance with Laws. AMS will, and will cause each Subsidiary to,
comply with all laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject including, without limitation, all
Environmental Laws, the failure to comply with which could reasonably be
expected to have a Material Adverse Effect.
6.8. Maintenance of Properties. AMS will, and will cause each Subsidiary
to, do all things necessary to maintain, preserve, protect and keep its Property
in good repair, working order and condition, and make all necessary and proper
repairs, renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times.
6.9. Inspection. AMS will, and will cause each Subsidiary to, permit the
Agent and the Lenders, by their respective representatives and agents, to
inspect any of the Property, books and financial records of AMS and its
Subsidiaries, to examine and make copies of the books of accounts and other
financial records of AMS and its Subsidiaries, and to discuss the affairs,
finances and accounts of AMS and its Subsidiaries with, and to be advised as to
the same by, their respective officers at such reasonable times and intervals as
the Agent or any Lender may designate; provided, that so long as no Default or
Unmatured Default has occurred and is continuing, the Agent and the Lenders
shall provide advance notice of any inspection or examination. AMS will keep or
cause to be kept, and cause each Subsidiary to keep or cause to be kept,
appropriate records and books of account in which complete entries are to be
made
48
reflecting its and their business and financial transactions, such entries to be
made in accordance with Agreement Accounting Principles or SAP, as applicable,
consistently applied.
6.10. Dividends. AMS will not, nor will it permit any Subsidiary to,
declare or pay any dividends or make any distributions on its capital stock
(other than dividends payable in its own capital stock) or redeem, repurchase or
otherwise acquire or retire any of its capital stock at any time outstanding,
except that (i) any Subsidiary may declare and pay dividends to a Wholly-Owned
Subsidiary or to AMS, and (ii) AMS may repurchase its outstanding stock,
provided that any such repurchases after the date hereof shall not exceed
$7,200,000 in the aggregate.
6.11. Indebtedness. AMS will not, nor will it permit any Subsidiary to,
create, incur or suffer to exist any Indebtedness, except:
(a) the Loans;
(b) Indebtedness existing on the Initial Closing Date and described in
Schedule 5.28 and refinancings thereof or amendments or modifications
thereto which do not have the effect of increasing the principal amount
thereof or changing the amortization thereof (other than to extend the
same) and which are otherwise on terms and conditions no less favorable to
AMS, any Subsidiary, the Agent or any Lender than the terms of the
Indebtedness being refinanced, amended or modified;
(c) Indebtedness arising under Rate Hedging Agreements related to the
Loans;
(d) Contingent Obligations permitted pursuant to Section 6.18(a), (b),
(c) or (d);
(e) Indebtedness owing by AMS to any Wholly-Owned Subsidiary or by any
Wholly-Owned Subsidiary to AMS or any other Wholly-Owned Subsidiary, to the
extent such Indebtedness constitutes an Investment permitted under Section
6.14;
(f) additional Indebtedness including Capitalized Leases with an
aggregate principal outstanding not in excess of $7,000,000, of which not
more than $2,500,000 may consist of obligations for borrowed money; and
(g) Subordinated Indebtedness.
6.12. Merger. AMS will not, nor will it permit any Subsidiary to, merge or
consolidate with or into any other Person, except that (a) a Subsidiary may
merge into Holdings or a Wholly-Owned Subsidiary, (b) Holdings may merge into
AMS and (c) AMS may merge or consolidate with another Person so long as (i) the
surviving or successor corporation is organized under the laws of any state of
the United States and assumes the Obligations by written instrument acceptable
in form and substance to the Agent and each Lender, (ii) no Default or Unmatured
Default has occurred and is continuing or would occur after giving effect
thereto
49
(determined with respect to the covenants set forth in Section 6.19 on a pro
forma basis as of the last day of the most recent Fiscal Quarter for which
financial statements are available) and AMS delivers pro forma financial
statements, reasonably satisfactory to Agent and Lenders, for the next four
Fiscal Quarters demonstrating such compliance, and (iii) unless AMS is the
surviving corporation, each Lender has given its prior written consent to such
transaction, which consent shall not unreasonably be withheld.
6.13. Sale of Assets. AMS will not, nor will it permit any Subsidiary to,
lease, sell or otherwise dispose of its Property to any other Person, except:
(a) sales of Investments in the ordinary course of business by
Insurance Subsidiaries;
(b) leases, sales or other dispositions by AMS to any Wholly-Owned
Subsidiary or by any Subsidiary to AMS or any Wholly-Owned Subsidiary to
the extent permitted under Section 6.14;
(c) sales and other dispositions of obsolete equipment in the ordinary
course of business to the extent the proceeds thereof are used to replace
such disposed equipment; and
(d) leases, sales or other dispositions of its Property that, together
with all other Property of AMS and its Subsidiaries previously leased, sold
or disposed of (other than Investments sold in the ordinary course of
business by Insurance Subsidiaries) as permitted by this Section 6.13(d)
since the Initial Closing Date, do not constitute a Substantial Portion of
the Property of AMS and its Subsidiaries.
6.14. Investments and Acquisitions. (a) AMS will not, nor will it permit
any Subsidiary which is not an Insurance Subsidiary to, make or suffer to exist
any Investments (including, without limitation, loans and advances to, and other
Investments in, Subsidiaries), or commitments therefor, or to create any
Subsidiary or to become or remain a partner in any partnership or joint venture,
or to make any Acquisition of any Person, except:
(i) Cash and Cash Equivalent Investments;
(ii) Investments in existence on the Initial Closing Date
(including Investments in Subsidiaries) and, to the extent they
consist of loans, refinancings thereof or amendments or modifications
thereof which do not have the effect of increasing the principal
amount thereof or changing the amortization thereof (other than to
extend the same) and which are otherwise on terms and conditions no
less favorable to AMS, any Subsidiary, the Agent or any Lender than
the terms of the Investment being refinanced, amended or modified;
(iii) Other Investments in Subsidiaries in existence as of the
Initial Closing Date so long as no Default or Unmatured Default has
occurred and is continuing either before or after giving effect
thereto (determined, in respect of the covenants set forth in
50
Section 6.19, on a pro forma basis as of the last day of the most
recent Fiscal Quarter for which financial statements are available);
(iv) Acquisitions of businesses or entities engaged in the life,
accident and health insurance business which do not constitute hostile
takeovers, that maintain a rating by A.M. Best & Co. of B++ or better
(and Investments in Subsidiaries formed to acquire such businesses or
acquired after the date of this Agreement), and, if an acquisition of
stock, the outstanding stock of which is pledged to Agent on behalf of
the Lenders upon Agent's request (subject to obtaining regulatory
approval for any such pledge that AMS shall use its commercially
reasonable efforts to obtain), and made (A) for consideration
consisting of AMS's capital stock not to exceed $75,000,000 in the
aggregate after the Initial Closing Date (measured by reference to the
market value of such stock as of the consummation of such Acquisition)
or (B) for other types of consideration not to exceed (x) $15,000,000
in the aggregate after the Initial Closing Date (including the amount
of any consideration other than AMS's capital stock paid in connection
with Acquisitions made pursuant to clause (A)), less (y) the aggregate
consideration paid in respect of any Acquisitions made pursuant to
Section 6.14(b)(vi); and
(v) Up to $5,000,000 in the aggregate at any time outstanding of
other Investments which do not constitute Acquisitions.
(b) AMS will not permit any Insurance Subsidiary to make or suffer to
exist any Investments (including, without limitation, loans and advances to
and other Investments in, Subsidiaries), or commitments therefor, or to
create any Subsidiary or to become or remain a partner in any partnership
or joint venture, or to make any Acquisition of any Person, except:
(i) Cash and Cash Equivalent Investments;
(ii) Investments in debt securities rated BBB- or better by
S&P, Baa-3 or better by Xxxxx'x or NAIC-2 or better by the NAIC;
provided, that any such Investment which, at any time after which it is
made, ceases to meet such rating requirements (A) shall cease to be
permitted hereby if then permitted by Section 6.14(b)(iii) and (B) if
not then permitted by Section 6.14(b)(iii) shall remain permitted
hereby until the earlier of the time it is permitted under Section
6.14(b)(iii) and the date which is 30 days after the date on which such
rating requirement is no longer met;
(iii) Other Investments of a quality acceptable to the
insurance commissioner in the respective domiciliary state of such
Insurance Subsidiary not otherwise permitted under this Section
6.14(b); provided, that such Investments of (A) each such Insurance
Subsidiary that is a Material Insurance Subsidiary do not exceed, in
the aggregate at any one time outstanding, 20% of the Statutory Capital
and Surplus of such Material Insurance Subsidiary or (B) all other
Insurance Subsidiaries as a group, if such other Insurance Subsidiaries
have an aggregate Statutory Capital and Surplus in excess of
$5,000,000, do not exceed 20% of such aggregate Statutory Capital and
Surplus;
51
(iv) Existing Investments in Subsidiaries and other Investments
in existence on the Initial Closing Date and, to the extent they
consist of loans, refinancings thereof or amendments or modifications
thereto which do not have the effect of increasing the principal
amount thereof or changing the amortization thereof (other than to
extend the same) and which are otherwise or terms and conditions no
less favorable to AMS, any Subsidiary, the Agent or any Lender than
the terms of the Investment being refinanced, amended or modified; and
(v) Acquisitions of blocks of life, accident or health
insurance business through assumptive reinsurance, coinsurance or
indemnity reinsurance, so long as the only consideration paid in
connection therewith consists of (A) premium sharing and (B) payments
of up to $5,000,000 in the aggregate after the date hereof.
(vi) Acquisitions of businesses or entities engaged in the
life, accident and health insurance business which do not constitute
hostile takeovers, that maintain a rating by A.M. Best & Co. of B++ or
better (and Investments in Subsidiaries formed to acquire such
businesses or acquired after the date of this Agreement), and, if an
acquisition of stock, the outstanding stock of which is pledged to
Agent on behalf of the Lenders upon Agent's request (subject to
obtaining regulatory approval for any such pledge that AMS shall use
its commercially reasonable efforts to obtain), and made after the
Initial Closing Date for an aggregate consideration not to exceed (A)
$15,000,000 (including the amount of any consideration paid in
connection with reinsurance transactions permitted pursuant to Section
6.14(b)(v)), less (B) the aggregate consideration paid in respect of
any Acquisitions made pursuant to Section 6.14(a)(iv)(B).
6.15. Liens. AMS will not, nor will it permit any Subsidiary to, create,
incur, or suffer to exist any lien or encumbrance in, of or on the Property of
AMS or any of its Subsidiaries, except the following Permitted Liens:
(a) Liens for taxes, assessments or governmental charges or levies on
its Property if the same shall not at the time be delinquent or thereafter
can be paid without penalty, or are being contested in good faith and by
appropriate proceedings and for which adequate reserves in accordance with
Agreement Accounting Principles or SAP, as applicable, shall have been set
aside on its books;
(b) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than 60 days past due
or which are being contested in good faith by appropriate proceedings and
for which adequate reserves shall have been set aside on its books;
(c) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation;
52
(d) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do not
in any material way affect the marketability of the same or interfere with
the use thereof in the business of AMS or its Subsidiaries;
(e) Deposits made by any Insurance Subsidiary with the insurance
regulatory authority in its jurisdiction of domicile or other statutory
Liens or Liens or claims imposed or required by applicable insurance law or
regulation against the assets of any Insurance Subsidiary, in each case in
favor of all policy holders of such Insurance Subsidiary and in the
ordinary course of such Insurance Subsidiary's business;
(f) Liens existing on the Initial Closing Date and described in
Schedule 6.15;
(g) Liens securing the Indebtedness described in Section 6.11(f), so
long as such Liens extend only to the equipment leased thereunder;
(h) other Liens securing Indebtedness or obligations in an aggregate
principal amount not in excess of $2,500,000 at any one time outstanding;
and
(i) Liens created by the Loan Documents in favor of Agent for the
benefit of the Lenders.
6.16. Affiliates. AMS will not, nor will it permit any Subsidiary to, enter
into any transaction (including, without limitation, the purchase or sale of any
Property or service) with, or make any payment or transfer to, any Affiliate
except in the ordinary course of business and pursuant to the reasonable
requirements of AMS's or such Subsidiary's business and upon fair and reasonable
terms no less favorable to AMS or such Subsidiary than AMS or such Subsidiary
would obtain in a comparable arms-length transaction.
6.17. Other Indebtedness. AMS will not, nor will it permit any Subsidiary
to, directly or indirectly voluntarily prepay, defease or in substance defease,
purchase, redeem, retire or otherwise acquire, any Indebtedness prior to the
date due (other than the Loans) while a Default or Unmatured Default has
occurred and is continuing or would occur after giving effect thereto
(determined, in respect of the covenants set forth in Section 6.19, on a pro
forma basis as of the last day of the most recent Fiscal Quarter for which
financial statements are available).
6.18. Contingent Obligations. AMS will not, nor will it permit any
Subsidiary to, make or suffer to exist any Contingent Obligation (including,
without limitation, any Contingent Obligation with respect to the obligations of
a Subsidiary), except (a) the Contingent Obligations described on Schedule 6.18,
(b) Contingent Obligations in respect of insurance contracts or policies issued
in the ordinary course of business, (c) Contingent Obligations in respect of the
endorsement of instruments for deposit or collection in the ordinary course of
business, (d) Contingent Obligations in respect of the Indebtedness described in
Section 6.11(f), and (e) Contingent Obligations permitted under Section 6.11(g).
53
6.19. Financial Covenants.
6.19.1. Fixed Charge Coverage Ratio. AMS will not permit its Fixed
Charge Coverage Ratio, determined as of the end of each Fiscal Quarter for
the period of four Fiscal Quarters ending on such date, to be less than (a)
1.75 to 1.0 from January 1, 2000 through Xxxxx 00, 0000, (x) 1.75 to 1.0
from April 1, 2000 through June 30, 2000, (c) 2.5 to 1.0 from July 1, 2000
through September 30, 2000, (d) 3.0 to 1.0 from October 1, 2000 through
December 31, 2000, (e) 3.0 to 1.0 from January 1, 2001, through December
31, 2001, and (f) 3.25 to 1.0 from January 1 through December 31 of each
year thereafter; provided, however, there shall be excluded from the
calculation of EBITDA within the Fixed Charge Coverage Ratio the one-time
charges relating to the pre-tax reserve strengthening in the second and
third quarter of 1999 and the pre-tax premium deficiency reserve in the
third quarter of 1999 for AMS and its Subsidiaries and also the balloon
payment due in the year 2004 on the loan made by M&I Xxxxxxxx & Ilsley Bank
that is secured by the real property of AMS and its Subsidiaries located at
0000 XXX Xxxxxxxxx, Xxxxx Xxx, Xxxxxxxxx 00000.
6.19.2. Interest Coverage Ratio. AMS will not permit its Interest
Coverage Ratio, determined as of the end of each Fiscal Quarter for the
period of four Fiscal Quarters ending on such date, to be less than (a) 4.0
to 1.0 from January 1, 2000 through Xxxxx 00, 0000, (x) 4.0 to 1.0 from
April 1, 2000 through June 30, 2000, (c) 5.0 to 1.0 from July 1, 2000
through September 30, 2000, (d) 6.0 to 1.0 from October 1, 2000 through
December 31, 2000, and (e) 6.0 to 1.0 from January 1 through December 31 of
each year thereafter; provided, however, there shall be excluded from the
calculation of EBITDA within the Interest Coverage Ratio the one-time
charges relating to the pre-tax reserve strengthening in the second and
third quarter of 1999 and the pre-tax premium deficiency reserve in the
third quarter of 1999 for AMS and its Subsidiaries.
6.19.3. Leverage Ratio. AMS will not permit its Leverage Ratio,
determined as of the end of each of Fiscal Quarter, to be greater than 0.35
to 1.0.
6.19.4. Consolidated Net Worth. AMS will at all times maintain a
Consolidated Net Worth of not less than the sum of (a) $200,000,000, plus
(b) 50% of the positive Consolidated Net Income earned by AMS in each
Fiscal Quarter ending after September 30, 1999 and on or prior to the date
of determination (excluding changes in unrealized gain/loss), plus (c) 25%
of the Net Available Proceeds received by AMS or any Subsidiary from the
issuance of equity securities after September 30, 1999.
6.19.5. Statutory Capital and Surplus. AMS will at all times cause
UWLIC to maintain a Statutory Capital and Surplus of not less than the sum
of (a) $140,000,000, plus (b) 50% of the positive Statutory Net Income
earned by UWLIC in each Fiscal Quarter ending after September 30, 1999 and
on or prior to the date of determination (excluding changes in unrealized
gain/loss).
6.19.6. Risk-Based Capital. At all times after the date hereof, AMS
will cause each Material Insurance Subsidiary to maintain a ratio of (a)
Total Adjusted Capital (as defined
54
in the Risk-Based Capital Act or in the rules and procedures prescribed
from time to time by the NAIC with respect thereto) to (b) the Company
Action Level RBC (as defined in the Risk-Based Capital Act or in the rules
and procedures prescribed from time to time by the NAIC with respect
thereto) of at least 175%. AMS shall also provide the Lenders with copies
of the IRIS ratio calculations for each Material Insurance Subsidiary by
March 31 of each year.
6.20. Year 2000. AMS will take and will cause each of its Subsidiaries to
take all such actions as are reasonably necessary to assure that Year 2000
Issues will not have a Material Adverse Effect. At the request of the Agent or
any Lender, AMS will provide a description of any outstanding Year 2000 Issues
that may have arisen together with any updates or progress reports with respect
thereto.
6.21. Reinsurance. AMS will not permit any Insurance Subsidiary to (a)
enter into bulk reinsurance arrangements, including without limitation any bulk
financial reinsurance arrangements, or (b) enter into any other (or renew,
extend or materially modify any existing) reinsurance arrangements except in the
ordinary course of business (i) with reinsurers rated at least "A-" (at the time
such reinsurance arrangements are entered into) by A.M. Best & Co. or its
equivalent by another reputable rating agency or reinsurers whose obligations to
the Insurance Subsidiaries are secured by letters of credit or other collateral
reasonably acceptable to the Required Lenders or (ii) with other reinsurers so
long as the aggregate corresponding credits to reserves (page 3, lines 1, 2, 3
and 4 of the Annual Statement) of all Insurance Subsidiaries in respect of
reinsurance arrangements with all such other reinsurers does not exceed 3% of
the aggregate of such reserves of all Insurance Subsidiaries; provided, that
notwithstanding the foregoing, any Insurance Subsidiary may enter into any
reinsurance arrangement in order to effect the Acquisition of a block of
insurance business which is permitted under Section 6.14(b)(v).
6.22. Tax Consolidation. Neither AMS nor any Subsidiary will (a) file or
consent to the filing of any consolidated, combined or unitary income tax return
with any Person other than AMS and its Subsidiaries or (b) enter into any tax
sharing agreement or similar arrangement other than a tax sharing agreement
among AMS and its Subsidiaries.
6.23. ERISA Compliance. With respect to any Plan, neither AMS nor any
Subsidiary shall or shall permit any other member of the Controlled Group to:
(a) engage in any "prohibited transaction" (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code) for which a civil penalty
pursuant to Section 502(i) of ERISA or a tax pursuant to Section 4975 of
the Code in excess of $250,000 for all Plans in the aggregate could
reasonably be expected to be imposed;
(b) permit an "accumulated funding deficiency" (as such term is
defined in Section 302 of ERISA) in excess of $250,000 for all Plans in the
aggregate to be incurred whether or not waived, or permit any Unfunded
Liability which could reasonably be expected to have a Material Adverse
Effect;
55
(c) permit the occurrence of any Reportable Event which could
reasonably be expected to result in liability (i) to AMS or any Subsidiary
in excess of $250,000 for all Plans in the aggregate or (ii) to any other
member of the Controlled Group in an amount which could reasonably be
expected to have a Material Adverse Effect;
(d) fail to make any contribution or payment to any Multiemployer Plan
which any member of the Controlled Group may be required to make under any
agreement relating to such Multiemployer Plan or any law pertaining thereto
which results in or could result in a liability (i) of AMS or any
Subsidiary in excess of $250,000 for all Plans in the aggregate or (ii) of
any other member of the Controlled Group which could reasonably be expected
to have a Material Adverse Effect; or
(e) permit the establishment or amendment of any Plan or cause or
permit any Plan to fail to comply with the applicable provisions of ERISA
and the Code, which establishment, amendment or failure could reasonably be
expected to result in liability to any member of the Controlled Group which
individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect.
6.24. Environmental Matters. AMS shall, and shall cause each of its
Subsidiaries to, (a) at all times comply in all material respects with all
applicable Environmental Laws and (b) promptly take any and all necessary
remedial actions in response to the presence, storage, use, disposal,
transportation or release of any hazardous or toxic materials on, under or about
any real property owned, leased or operated by AMS or any of its Subsidiaries.
6.25. Change in Corporate Structure; Fiscal Year. AMS shall not, nor shall
it permit any Subsidiary to, (a) permit any amendment or modification to be made
to its certificate or articles of incorporation or by-laws which is materially
adverse to the interests of the Lenders (provided that AMS shall notify the
Agent of any other amendment or modification thereto as soon as practicable
thereafter) or (b) change its Fiscal Year to end on any date other than December
31 of each year.
6.26. Inconsistent Agreements. AMS shall not, nor shall it permit any
Subsidiary to, enter into any indenture, agreement, instrument or other
arrangement which, (a) directly or indirectly prohibits or restrains, or has the
effect of prohibiting or restraining, or imposes materially adverse conditions
upon, the incurrence of the Obligations, the granting of Liens to secure the
Obligations, the extension of the Guaranty Agreement, the continuation of the
Pledge Agreements, the amending of the Loan Documents, or the ability of any
Subsidiary to (i) pay dividends or make other distributions on its capital
stock, (ii) make loans or advances to AMS or (iii) repay loans or advances from
AMS or (b) contains any provision which would be violated or breached by the
making of Advances or by the performance by AMS or Holdings of any of its
obligations under any Loan Document.
6.27. Capital Expenditures. AMS will not, nor will it permit any Subsidiary
to, expend, or be committed to expend for Capital Expenditures (including,
without limitation, for the acquisition of fixed assets) in excess of
$10,000,000 in any Fiscal Year; provided, that any
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amount not used in any Fiscal Year may be used in the next succeeding Fiscal
Year; provided, further, that permitted Capital Expenditures for each Fiscal
Year shall first be applied in such Fiscal Year to that year's permitted amount
and then to any amount carried over from the prior Fiscal Year.
6.28. A.M. Best Rating. UWLIC shall at all times maintain an A.M. Best
rating of at least B++.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall constitute
a Default:
7.1. Any representation or warranty made or deemed made by or on behalf of
AMS or any of its Subsidiaries to the Lenders or the Agent under or in
connection with this Agreement, any Loan, or any certificate or information
delivered in connection with this Agreement or any other Loan Document shall be
materially false on the date as of which made.
7.2. Nonpayment of principal of any Loan when due, or nonpayment of
interest upon any Loan or of any non-use fee or other obligations under any of
the Loan Documents when due.
7.3. The breach by AMS of any of the terms or provisions of Section 6.1,
Section 6.2 or Sections 6.10 through 6.27.
7.4. The breach by AMS (other than a breach which constitutes a Default
under another Section of this Article VII) of any of the terms or provisions of
this Agreement which is not remedied within twenty (20) days after the earlier
of (i) the receipt by AMS of notice thereof from Agent or any Lender or (ii)
having obtained knowledge thereof.
7.5. Failure of AMS or any of its Subsidiaries to pay when due any
Indebtedness aggregating in excess of $1,500,000 ("Material Indebtedness"); or
the default by AMS or any of its Subsidiaries in the performance (beyond the
applicable grace period with respect thereto, if any) of any term, provision or
condition contained in any agreement under which any such Material Indebtedness
was created or is governed, or any other event shall occur or condition exist,
the effect of which default or event is to cause, or to permit the holder or
holders of such Material Indebtedness to cause, such Material Indebtedness to
become due prior to its stated maturity; or any Material Indebtedness of AMS or
any of its Subsidiaries shall be declared to be due and payable or required to
be prepaid or repurchased (other than by a regularly scheduled payment) prior to
the stated maturity thereof; or AMS or any of its Subsidiaries shall not pay, or
admit in writing its inability to pay, its debts generally as they become due.
7.6. AMS or any of its Subsidiaries shall (a) have an order for relief
entered with respect to it under the Federal bankruptcy laws as now or hereafter
in effect, (b) make an assignment for the benefit of creditors, (c) apply for,
seek, consent to, or acquiesce in, the
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appointment of a receiver, custodian, trustee, examiner, liquidator or similar
official for it or any Substantial Portion of its Property, (d) institute any
proceeding seeking an order for relief under the Federal bankruptcy laws as now
or hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file an
answer or other pleading denying the material allegations of any such proceeding
filed against it, (e) take any corporate or partnership action to authorize or
effect any of the foregoing actions set forth in this Section 7.6 or (f) fail to
contest in good faith any appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of AMS or any of its
Subsidiaries, a receiver, trustee, examiner, liquidator or similar official
shall be appointed for AMS or any of its Subsidiaries or any Substantial Portion
of its Property, or a proceeding described in Section 7.6(a) shall be instituted
against AMS or any of its Subsidiaries and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of 60 consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of, all or any portion of the
Property of AMS or any of its Subsidiaries which, when taken together with all
other Property of AMS and its Subsidiaries so condemned, seized, appropriated,
or taken custody or control of, during the twelve-month period ending with the
month in which any such action occurs, constitutes a Substantial Portion.
7.9. AMS or any of its Subsidiaries shall fail within 45 days to pay, bond
or otherwise discharge any judgment or order for the payment of money in excess
of $250,000 (or multiple judgments or orders for the payment of an aggregate
amount in excess of $500,000), which is not stayed on appeal or otherwise being
appropriately contested in good faith and as to which no enforcement actions
have been commenced.
7.10. The Unfunded Liabilities of all Single Employer Plans shall exceed in
the aggregate $250,000 or any Reportable Event shall occur in connection with
any Plan.
7.11. Any Change in Control shall occur.
7.12. Nonpayment by AMS of any Rate Hedging Obligation owed to any Lender
when due or the breach by AMS of any term, provision or condition contained in
any agreement, device or arrangement giving rise to any such Rate Hedging
Obligation.
7.13 Any License of any Material Insurance Subsidiary issued in its state
of domicile or in a state in which its earned premiums in the prior Fiscal Year
constituted 2% or more of its aggregate earned premiums in such period (a) shall
be revoked by the Governmental Authority which issued such License, or any
formal action (administrative or judicial) to revoke such License shall have
been commenced against such Material Insurance Subsidiary and shall not have
been dismissed within 30 days after the commencement thereof, (b) shall be
suspended by such Governmental Authority for a period in excess of 30 days or
(c) shall not be reissued or
58
renewed by such Governmental Authority upon the expiration thereof following
application for such reissuance or renewal of such Material Insurance
Subsidiary.
7.14 Any Insurance Subsidiary shall be the subject of a final
non-appealable order imposing a fine in an amount in excess of $500,000 in any
single instance or other such orders imposing fines in excess of $2,000,000 in
the aggregate after the date of this Agreement by or at the request of any state
insurance regulatory agency as a result of the violation by such Insurance
Subsidiary of such state's applicable insurance laws or the regulations
promulgated in connection therewith.
7.15 Any Insurance Subsidiary shall become subject to (a) any conservation
or liquidation order, directive or mandate issued by any Governmental Authority
or (b) any other directive or mandate issued by any Governmental Authority which
is materially adverse to such Insurance Subsidiary, which in either case is not
stayed within ten (10) days.
7.16 The Guaranty Agreement shall fail to remain in full force and effect
or any action shall be taken to discontinue or to assert the invalidity or
unenforceability of the Guaranty Agreement, or Holdings shall fail to comply
with any of the terms or provisions of the Guaranty Agreement or shall deny that
it has any further liability under the Guaranty Agreement or shall give notice
to that effect.
7.17 Any Pledge Agreement shall for any reason fail to create a valid and
perfected, first priority security interest in any collateral purported to be
covered thereby, except as permitted by the terms of such Pledge Agreement, or
any Pledge Agreement shall fail to remain in full force or effect or any action
shall be taken by any Person to discontinue such Pledge Agreement or by AMS or
any of its Subsidiaries to assert the invalidity or unenforceability of such
Pledge Agreement, or a default shall occur under such Pledge Agreement.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. If any Default described in Section 7.6 or 7.7 occurs
with respect to AMS, the obligations of the Lenders to make Loans hereunder
shall automatically terminate and the Obligations shall immediately become due
and payable without any election or action on the part of the Agent or any
Lender. If any other Default occurs, the Required Lenders (or the Agent with the
consent of the Required Lenders) may terminate or suspend the obligations of the
Lenders to make Loans hereunder, or declare the Obligations to be due and
payable, or both, whereupon the Obligations shall become immediately due and
payable, without presentment, demand, protest or notice of any kind, all of
which AMS hereby expressly waives.
If, within ten (10) Business Days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 7.6 or 7.7 with respect to AMS) and before any judgment or decree for
the payment of the Obligations due shall have been obtained or entered,
59
the Required Lenders (in their sole discretion) shall so direct, the Agent
shall, by notice to AMS, rescind and annul such acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Article VIII, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and AMS may enter into agreements supplemental hereto for the purpose
of adding or modifying any provisions to the Loan Documents or changing in any
manner the rights of the Lenders or AMS hereunder or waiving any Default
hereunder; provided, that no such supplemental agreement shall, without the
consent of all of the Lenders:
(a) Extend the final maturity of any Loan or forgive all or any
portion of the principal amount thereof, or reduce the rate or extend the
time of payment of interest or fees thereon;
(b) Reduce the percentage specified in the definition of Required
Lenders;
(c) Extend the Facility Termination Date, or reduce the amount or
extend the payment date for, the mandatory payments required under Section
2.2 or the mandatory commitment reductions required under Section 2.8, or
increase the amount of the Commitment of any Lender hereunder, or permit
AMS to assign its rights under this Agreement;
(d) Release Holdings from the terms of the Guaranty Agreement;
(e) Release all or a material portion of the collateral which is
subject to either Pledge Agreement; or
(f) Amend this Section 8.2.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may waive payment
of the fee required under Section 12.3.2 without obtaining the consent of any
other party to this Agreement. No amendment, waiver or consent relating to the
Swing Line Lender shall be effective without the written consent of the Swing
Line Lender.
8.3. Preservation of Rights. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
AMS to satisfy the conditions precedent to such Loan shall not constitute any
waiver or acquiescence. Any single or partial exercise of any such right shall
not preclude other or further exercise thereof or the exercise of any other
right, and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.2, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Agent and the Lenders until the Obligations have been paid in full.
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ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and warranties of AMS
contained in this Agreement shall survive the making of the Loans herein
contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to AMS
in violation of any limitation or prohibition provided by any applicable statute
or regulation.
9.3. Headings. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire agreement and
understanding among AMS, the Agent and the Lenders and supersede all prior
agreements and understandings among AMS, the Agent and the Lenders relating to
the subject matter thereof other than the fee letter described in Section 10.13.
9.5. Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns.
9.6. Expenses; Indemnification. (a) AMS shall reimburse the Agent and each
Lender for any costs, internal charges and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Agent, which attorneys may
be employees of the Agent) paid or incurred by the Agent in connection with the
preparation, negotiation, execution, delivery, syndication, review, amendment,
modification, and administration of the Loan Documents. AMS also agrees to
reimburse the Agent and the Lenders for any costs, internal charges and
out-of-pocket expenses (including attorneys' fees and time charges of attorneys
for the Agent and the Lenders, which attorneys may be employees of the Agent or
the Lenders) paid or incurred by the Agent or any Lender in connection with the
collection and enforcement of the Loan Documents. Expenses being reimbursed by
AMS under this Section include, without limitation, costs and expenses incurred
in connection with the Reports described in the following sentence. AMS
acknowledges that from time to time LaSalle may prepare and may distribute to
the Lenders (but shall have no obligation or duty to prepare or to distribute to
the Lenders) certain audit reports (the "Reports") pertaining to AMS's assets
for internal use by LaSalle from information furnished to it by or on behalf of
AMS, after LaSalle has exercised its rights of inspection pursuant to this
Agreement.
(b) AMS hereby further agrees to indemnify the Agent and each Lender
and the
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directors, officers and employees of each against all losses, claims,
damages, penalties, judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor whether or
not the Agent or any Lender is a party thereto) which any of them may pay
or incur arising out of or relating to this Agreement, the other Loan
Documents, any merger of Holdings with AMS, the transactions contemplated
hereby, the other Closing Transactions or the direct or indirect
application or proposed application of the proceeds of any Loan hereunder
except to the extent that (i) they are determined in a final non-appealable
judgment by a court of competent jurisdiction to have resulted from the
gross negligence or willful misconduct of the party seeking indemnification
or (ii) that they arise solely from any dispute of or any litigation or
other proceeding instituted by any Lender against the Agent (if the Agent
was determined to have breached its obligations to such Lender hereunder)
or (for Persons other than the Agent and its directors, officers and
employees) any other Lender. The obligations of AMS under this Section 9.6
shall survive the termination of this Agreement.
9.7. Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to each of the Lenders.
9.8. Accounting. Except as provided to the contrary herein, all accounting
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with Agreement Accounting Principles.
9.9. Severability of Provisions. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.10. Nonliability of Lenders. The relationship between AMS on the one hand
and the Lenders and the Agent on the other hand shall be solely that of borrower
and lender. Neither the Agent nor any Lender shall have any fiduciary
responsibilities to AMS. Neither the Agent nor any Lender undertakes any
responsibility to AMS to review or inform AMS of any matter in connection with
any phase of AMS's business or operations. AMS agrees that neither the Agent nor
any Lender shall have liability to AMS (whether sounding in tort, contract or
otherwise) for losses suffered by AMS in connection with, arising out of, or in
any way related to, the transactions contemplated and the relationship
established by the Loan Documents, or any act, omission or event occurring in
connection therewith, unless it is determined in a final non-appealable judgment
by a court of competent jurisdiction that such losses resulted from the gross
negligence or willful misconduct of the party from which recovery is sought.
Neither the Agent nor any Lender shall have any liability with respect to, and
AMS hereby waives, releases and agrees not to xxx for, any special, indirect or
consequential damages suffered by AMS in connection with, arising out of, or in
any way related to the Loan Documents or the transactions contemplated thereby.
9.11. Confidentiality. Each of the Agent and each Lender agrees to hold any
62
confidential information which it may receive from AMS pursuant to this
Agreement in confidence, except for disclosure (a) to its Affiliates and to
other Lenders and their respective Affiliates, (b) to legal counsel,
accountants, and other professional advisors to that Lender or to a Transferee,
(c) to regulatory officials, (d) to any Person as requested pursuant to or as
required by law, regulation, or legal process, provided that if not prohibited
by law, the Agent or such Lender will use reasonable efforts to provide notice
to AMS of the requested disclosure and give AMS a reasonable opportunity to seek
a protective order with respect to such information prior to delivering
confidential information in response thereto, (e) to any Person in connection
with any legal proceeding to which that Lender is a party, to the extent
reasonably necessary, and (f) permitted by Section 12.4.
9.12. Nonreliance. Each Lender hereby represents that it is not relying on
or looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Loans provided
for herein.
9.13. Disclosure. AMS and each Lender hereby (a) acknowledge and agree that
LaSalle and/or its Affiliates from time to time may make other loans to or have
other relationships with AMS, and (b) waive any liability of LaSalle or such
Affiliate to AMS or any Lender, respectively, arising out of or resulting from
such loans or relationships other than liabilities arising out of the gross
negligence or willful misconduct of LaSalle or its Affiliates.
ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. LaSalle is hereby appointed by
each of the Lenders as its contractual representative (herein referred to as the
"Agent") hereunder and under each other Loan Document, and each of the Lenders
irrevocably authorizes the Agent to act as the contractual representative of
such Lender with the rights and duties expressly set forth herein and in the
other Loan Documents. The Agent agrees to act as such contractual representative
upon the express conditions contained in this Article X. Notwithstanding the use
of the defined term "Agent," it is expressly understood and agreed that the
Agent shall not have any fiduciary responsibilities to any Lender by reason of
this Agreement or any other Loan Document and that the Agent is merely acting as
the contractual representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its
capacity as the Lenders' contractual representative, the Agent (a) does not
hereby assume any fiduciary duties to any of the Lenders, (b) is a
"representative" of the Lenders within the meaning of Section 9-105 of the
Uniform Commercial Code and (c) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders hereby agrees to
assert no claim against the Agent on any agency theory or any other theory of
liability for breach of fiduciary duty, all of which claims each Lender hereby
waives.
10.2. Powers. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with
63
such powers as are reasonably incidental thereto. The Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders to take any
action thereunder, except any action specifically provided by the Loan Documents
to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to AMS, the Lenders or any Lender
for any action taken or omitted to be taken by it or them hereunder or under any
other Loan Document or in connection herewith or therewith except to the extent
such action or inaction is determined in a final non-appealable judgment by a
court of competent jurisdiction to have arisen from the gross negligence or
willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent nor any
of its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into, or verify (a) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of AMS or of any of AMS's
Subsidiaries. The Agent shall have no duty to disclose to the Lenders
information that is not required to be furnished by AMS to the Agent at such
time, but is voluntarily furnished by AMS to the Agent (either in its capacity
as Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any of its
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all
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matters pertaining to the Agent's duties hereunder and under any other Loan
Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (a) for any amounts not
reimbursed by AMS for which the Agent is entitled to reimbursement by AMS under
the Loan Documents, (b) for any other expenses incurred by the Agent on behalf
of the Lenders, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents (including, without
limitation, for any expenses incurred by the Agent in connection with any
dispute between the Agent and any Lender or between two or more of the Lenders)
and (c) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby
(including, without limitation, for any such amounts incurred by or asserted
against the Agent in connection with any dispute between the Agent and any
Lender or between two or more of the Lenders), or the enforcement of any of the
terms of the Loan Documents or of any such other documents; provided, that no
Lender shall be liable for any of the foregoing to the extent any of the
foregoing is found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Agent. The obligations of the Lenders under this Section 10.8 shall survive
payment of the Obligations and termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Unmatured Default hereunder unless
the Agent has received written notice from a Lender or AMS referring to this
Agreement describing such Default or Unmatured Default and stating that such
notice is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall give prompt notice thereof to the Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender, the Agent
shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with AMS or Holdings
or any Subsidiary in which AMS or Holdings or such Subsidiary is not restricted
hereby from engaging with any other Person. The Agent, in its individual
capacity, is not obligated to remain a Lender.
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10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by AMS and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving written
notice thereof to the Lenders and AMS, such resignation to be effective upon the
appointment of a successor Agent or, if no successor Agent has been appointed,
forty-five days after the retiring Agent gives notice of its intention to
resign. The Agent may be removed at any time with or without cause by written
notice received by the Agent from the Required Lenders, such removal to be
effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of AMS and the Lenders, a successor Agent. If no successor Agent shall
have been so appointed by the Required Lenders within thirty days after the
resigning Agent giving notice of its intention to resign, then the resigning
Agent may appoint, on behalf of AMS and the Lenders, a successor Agent.
Notwithstanding the previous sentence, the Agent may at any time without the
consent of AMS or any Lender, appoint any of its Affiliates which is a
commercial bank as a successor Agent hereunder. If the Agent has resigned or
been removed and no successor Agent has been appointed, the Lenders may perform
all the duties of the Agent hereunder and AMS shall make all payments in respect
of the Obligations to the applicable Lender and for all other purposes shall
deal directly with the Lenders. No successor Agent shall be deemed to be
appointed hereunder until such successor Agent has accepted the appointment. Any
such successor Agent shall be a commercial bank having capital and retained
earnings of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning or removed Agent. Upon the effectiveness of the resignation or
removal of the Agent, the resigning or removed Agent shall be discharged from
its duties and obligations hereunder and under the Loan Documents. After the
effectiveness of the resignation or removal of an Agent, the provisions of this
Article X shall continue in effect for the benefit of such Agent in respect of
any actions taken or omitted to be taken by it while it was acting as the Agent
hereunder and under the other Loan Documents. In the event that there is a
successor to the Agent by merger, or the Agent assigns its duties and
obligations to an Affiliate pursuant to this Section 10.12, then the term "Prime
Rate" as used in this Agreement shall mean the prime rate, base rate or other
analogous rate of the new Agent.
10.13. Agent's Fee. AMS agrees to pay to the Agent, for its own account,
the fees agreed to by AMS and the Agent pursuant to that certain fee letter
agreement dated as of even date herewith, or as otherwise agreed from time to
time.
10.14. Delegation to Affiliates. AMS and the Lenders agree that the Agent
may delegate
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any of its duties under this Agreement to any of its Affiliates. Any such
Affiliate (and such Affiliate's directors, officers, agents and employees) which
performs duties in connection with this Agreement shall be entitled to the same
benefits of the indemnification, waiver and other protective provisions to which
the Agent is entitled under Articles IX and X.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if AMS becomes insolvent, however evidenced, or
any Default occurs, any and all deposits (including all account balances,
whether provisional or final and whether or not collected or available) and any
other Indebtedness at any time held or owing by any Lender or any Affiliate of
any Lender to or for the credit or account of AMS may be offset and applied
toward the payment of the Obligations owing to such Lender, whether or not the
Obligations, or any part thereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made. If an
amount to be setoff is to be applied to the Obligations of AMS to a Lender other
than Indebtedness comprised of Loans made by such Lender, such amount shall be
applied ratably to such other Indebtedness and to the Indebtedness comprised of
the Loans.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of AMS and the Lenders
and their respective successors and assigns, except that (a) AMS shall not have
the right to assign its rights or obligations under the Loan Documents and (b)
any assignment by any Lender must be made in compliance with Section 12.3.
Notwithstanding clause (b) of this Section, any Lender may at any time, without
the consent of AMS or the Agent, assign all or any portion of its rights under
this Agreement and any Note to a Federal Reserve Bank; provided, that no such
assignment to a Federal Reserve Bank shall release the transferor Lender from
its obligations hereunder. The Agent may treat the Person which made any Loan or
which holds any Note as the owner thereof for all purposes hereof unless and
until such Person complies with Section 12.3 in the case of an assignment
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thereof or, in the case of any other transfer, a written notice of the transfer
is filed with the Agent. Any assignee or transferee of the rights to any Loan or
any Note agrees by acceptance of such transfer or assignment to be bound by all
the terms and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the owner of the rights to any Loan (whether or not a
Note has been issued in evidence thereof), shall be conclusive and binding on
any subsequent holder, transferee or assignee of the rights to such Loan.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law, at
any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held by
such Lender, any Commitment of such Lender or any other interest of such
Lender under the Loan Documents. In the event of any such sale by a Lender
of participating interests to a Participant, such Lender's obligations
under the Loan Documents shall remain unchanged, such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the owner of its Loans and the holder
of any Note issued to it in evidence thereof for all purposes under the
Loan Documents, all amounts payable by AMS under this Agreement shall be
determined as if such Lender had not sold such participating interests, and
AMS and the Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under the
Loan Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which forgives
principal, interest or fees or reduces the interest rate or fees payable
with respect to any such Loan or Commitment, extends the Facility
Termination Date, postpones any date fixed for any regularly-scheduled
payment of principal of, or interest or fees on, any such Loan or
Commitment, releases any Guarantors of any such Loan or releases all or
substantially all of the collateral, if any, securing any such Loan.
12.2.3. Benefit of Setoff. AMS agrees that each Participant shall be
deemed to have the right of setoff provided in Section 11.1 in respect of
its participating interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest were owing
directly to it as a Lender under the Loan Documents, provided that each
Lender shall retain the right of setoff provided in Section 11.1 with
respect to the amount of participating interests sold to each Participant.
The Lenders agree to share with each Participant, and each Participant, by
exercising the right of setoff provided in Section 11.1, agrees to share
with each Lender, any amount received pursuant to the exercise of its right
of setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may, in the ordinary course
of its business and in accordance with applicable law, at any time assign
to one or more banks or other entities ("Purchasers") all or any part of
its rights and obligations under the Loan Documents. Such assignment shall
be substantially in the form of Exhibit B or in such other form as may be
agreed to by the parties thereto. The consent of AMS, the Swing Line Lender
and the Agent shall be required prior to an assignment becoming effective
with respect to a Purchaser which is not a Lender or an Affiliate thereof;
provided, that if a Default has occurred and is continuing, the consent of
AMS shall not be required. Such consent shall not be unreasonably withheld
or delayed. Each such assignment shall (unless (x) each of AMS and the
Agent otherwise consents or (y) the proposed Purchaser is already a Lender)
be in an amount not less than the lesser of (a) $5,000,000 or (b) the
remaining amount of the assigning Lender's Commitment (calculated as at the
date of such assignment).
12.3.2. Effect; Effective Date. Upon (a) delivery to the Agent of a
notice of assignment, substantially in the form attached as Exhibit I to
Exhibit B (a "Notice of Assignment"), together with any consents required
by Section 12.3.1, and (b) payment of a $3,500 fee to the Agent for
processing such assignment, such assignment shall become effective on the
effective date specified in such Notice of Assignment. The Notice of
Assignment shall contain a representation by the Purchaser to the effect
that none of the consideration used to make the purchase of the Commitment
and Loans under the applicable assignment agreement are "plan assets" as
defined under ERISA and that the rights and interests of the Purchaser in
and under the Loan Documents will not be "plan assets" under ERISA. On and
after the effective date of such assignment, such Purchaser shall for all
purposes be a Lender party to this Agreement and any other Loan Document
executed by or on behalf of the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same extent as if
it were an original party hereto, and no further consent or action by AMS,
the Lenders or the Agent shall be required to release the transferor Lender
with respect to the percentage of the Aggregate Commitment and Loans
assigned to such Purchaser. Upon the consummation of any assignment to a
Purchaser pursuant to this Section 12.3.2, the transferor Lender, the Agent
and AMS shall, if the transferor Lender or the Purchaser desires that its
Loans be evidenced by Notes, make appropriate arrangements so that new
Notes or, as appropriate, replacement Notes are issued to such transferor
Lender and new Notes or, as appropriate, replacement Notes, are issued to
such Purchaser, in each case in principal amounts reflecting their
respective Commitments, as adjusted pursuant to such assignment.
12.4. Dissemination of Information. AMS authorizes each Lender to disclose
to any Participant or Purchaser or any other Person acquiring an interest in the
Loan Documents by operation of law (each a "Transferee") and any prospective
Transferee any and all information in such Lender's possession concerning the
creditworthiness of AMS, Holdings, UWLIC and the Subsidiaries, including without
limitation any information contained in any Reports; provided, that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
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12.5. Tax Treatment. If any interest in any Loan Document is transferred to
any Transferee which is organized under the laws of any jurisdiction other than
the United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 3.5(d).
ARTICLE XIII
NOTICES
13.1. Notices. Except as otherwise permitted by Section 2.17 with respect
to Borrowing Notices, all notices, requests and other communications to any
party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
at its address or facsimile number set forth on the signature pages hereof, or
(y) at such other address or facsimile number as such party may hereafter
specify for the purpose by notice to the Agent and AMS in accordance with the
provisions of this Section 13.1. Each such notice, request or other
communication shall be effective (a) if given by facsimile transmission, when
transmitted to the facsimile number specified in this Section and confirmation
of receipt is received, (b) if given by mail, 72 hours after such communication
is deposited in the mail with first class postage prepaid, addressed as
aforesaid, or (c) if given by any other means, when delivered (or, in the case
of electronic transmission, received) at the address specified in this Section;
provided, that notices to the Agent under Article II shall not be effective
until received.
13.2. Change of Address. AMS, the Agent and any Lender may each change the
address for service of notice upon it by a notice in writing to the other
parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of original counterparts, all
of which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such original counterpart. This
Agreement may also be executed in any number of e-mailed counterparts, all of
which taken together shall constitute one agreement, even if printed separately
from different print servers, and any of the parties hereto may execute this
Agreement by signing any such e-mailed counterpart. This Agreement shall be
effective when it has been executed by AMS, the Agent and the Lenders and each
party has notified the Agent by facsimile transmission or telephone that it has
taken such action.
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ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2. CONSENT TO JURISDICTION. AMS HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT
SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND AMS HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST AMS IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY AMS AGAINST THE AGENT OR ANY LENDER OR
ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
15.3. WAIVER OF JURY TRIAL. AMS, THE AGENT AND EACH LENDER HEREBY WAIVE
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.
[Remainder of Page Intentionally Left Blank]
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[This Page Intentionally Left Blank]
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IN WITNESS WHEREOF, AMS, the Lenders and the Agent have executed this
Agreement as of the date first above written.
AMERICAN MEDICAL SECURITY GROUP, INC.
By:
Xxxx X. Xxxxxxxxxx
Executive Vice President and Chief Financial Officer
Address: 0000 XXX Xxxxxxxxx
Xxxxx Xxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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Commitments
$25,000,000 LASALLE BANK NATIONAL ASSOCIATION,
Individually and as Agent
By:
Title:
Address: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
$10,000,000 FIRST UNION NATIONAL BANK, N.A.
By:
Title:
Address: 0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: H. Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
$10,000,000 ASSOCIATED BANK GREEN BAY, NATIONAL
ASSOCIATION
By:
Xxxxxxx X. Xxxxxx, Senior Vice President
Address: 000 Xxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
------------
$45,000,000 Aggregate Commitment
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