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AMENDED AND RESTATED CREDIT AGREEMENT
among
FREMONT GENERAL CORPORATION,
VARIOUS LENDING INSTITUTIONS,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of August 1, 1997 and
amended and restated as of June 30, 1999
$300,000,000
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CHASE SECURITIES INC.,
as Book Manager and Lead Arranger
TABLE OF CONTENTS
PAGE
SECTION 1. Amount and Terms of Credit..........................................1
1.01 Commitments.......................................................2
1.02 Minimum Amount of Each Borrowing; Maximum Number of Borrowings....2
1.03 Notice of Borrowing of Loans......................................2
1.04 Competitive Bid Borrowings........................................2
1.05 Disbursement of Funds.............................................4
1.06 Notes; Register...................................................5
1.07 Conversions.......................................................5
1.08 Pro Rata Borrowings...............................................6
1.09 Interest..........................................................6
1.10 Interest Periods..................................................7
1.11 Increased Costs, Illegality, etc..................................8
1.12 Compensation.....................................................10
1.13 Change of Lending Office.........................................10
SECTION 2. Fees; Commitments..................................................10
2.01 Fees.............................................................11
2.02 Voluntary Reduction of Commitments...............................11
2.03 Mandatory Reduction of Commitments...............................11
Section 3. Payments...........................................................11
3.01 Voluntary Prepayments............................................11
3.02 Mandatory Prepayments and Repayments.............................12
3.03 Method and Place of Payment......................................13
3.04 Net Payments.....................................................13
SECTION 4. Conditions Precedent...............................................14
4.01 Conditions Precedent to Amendment and Restatement................14
4.02 Conditions Precedent to Borrowings...............................17
SECTION 5. Representations, Warranties and Agreements.........................17
5.01 Corporate Status.................................................18
5.02 Corporate Power and Authority....................................18
5.03 No Violation.....................................................18
5.04 Litigation.......................................................18
5.05 Use of Proceeds..................................................18
5.06 Governmental Approvals...........................................19
5.07 Investment Company Act...........................................19
(i)
PAGE
5.08 Public Utility Holding Company Act...............................19
5.09 True and Complete Disclosure.....................................19
5.10 Financial Condition; Financial Statements........................20
5.11 Tax Returns and Payments.........................................20
5.12 Compliance with ERISA............................................21
5.13 Subsidiaries.....................................................21
5.14 Intellectual Property............................................22
5.15 Pollution and Other Regulations..................................22
5.16 Properties.......................................................22
5.17 Labor Relations; Collective Bargaining Agreements................22
5.18 Capitalization...................................................23
5.19 Indebtedness.....................................................23
5.20 Compliance with Statutes, etc....................................23
5.21 Special Purpose Corporation......................................23
5.22 Year 2000........................................................23
SECTION 6. Affirmative Covenants.............................................24
6.01 Information Covenants............................................24
6.02 Books, Records and Inspections...................................27
6.03 Insurance........................................................28
6.04 Payment of Taxes.................................................28
6.05 Corporate Franchises.............................................28
6.06 Compliance with Statutes, etc....................................28
6.07 ERISA............................................................28
6.08 Performance of Obligations.......................................29
6.09 Good Repair......................................................29
6.10 End of Fiscal Years; Fiscal Quarters.............................29
6.11 NAIC Tests.......................................................29
SECTION 7. Negative Covenants.................................................29
7.01 Changes in Business..............................................30
7.02 Consolidation, Merger, Sale or Purchase of Assets, etc...........30
7.03 Liens............................................................31
7.04 Indebtedness.....................................................34
7.05 Investments......................................................36
7.06 Prepayments and Modifications of Permitted Subordinated Debt.....36
7.07 Restrictions on Subsidiary Payments..............................36
7.08 Transactions with Affiliates.....................................37
7.09 Issuance of Stock................................................37
7.10 Liabilities to Policyholder Surplus Ratio........................37
7.11 Net Premiums Written Ratio.......................................37
7.12 Leverage Ratio...................................................37
7.13 Minimum Consolidated Net Worth...................................38
(ii)
PAGE
7.14 Interest Coverage Ratio..........................................38
7.15 FIC Combined Surplus.............................................38
7.16 Insured Depository Subsidiaries..................................38
SECTION 8. Events of Default.................................................38
8.01 Payments.........................................................38
(iii)
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 1,
1997 and amended and restated as of June 30, 1999, among FREMONT GENERAL
CORPORATION, a Nevada corporation (the "Borrower"), the lending institutions
listed from time to time on Annex I hereto (each a "Bank" and, collectively, the
"Banks"), and THE CHASE MANHATTAN BANK, as Administrative Agent (the "Agent").
Unless otherwise defined herein, all capitalized terms used herein and defined
in Section 9 are used herein as so defined.
W I T N E S S E T H :
WHEREAS, the Borrower, the Agent and certain of the Banks have
previously entered into a Credit Agreement, dated as of August 1, 1997 (such
Credit Agreement, as amended, modified and supplemented prior to the date
hereof, the "Existing Credit Agreement"); and
WHEREAS, the Borrower, the Agent and the Banks wish to amend
and restate the Existing Credit Agreement upon the terms and conditions set
forth herein;
NOW, THEREFORE, IT IS AGREED THAT, upon satisfaction or waiver
of the conditions precedent set forth in Section 4.01, the Existing Credit
Agreement shall be amended and restated in its entirety to read as follows:
SECTION 1. AMOUNT AND TERMS OF CREDIT.
1.01 COMMITMENTS. (a) Subject to and upon the terms and
conditions herein set forth, each Bank severally agrees to make a loan or loans
(each a "Loan" and, collectively, the "Loans") to the Borrower, which Loans (i)
shall be made at any time and from time to time on and after the Restatement
Effective Date and prior to the Final Maturity Date, (ii) may, at the option of
the Borrower, be incurred and maintained as, and/or converted into, Base Rate
Loans or Eurodollar Loans, PROVIDED that all Loans made by all Banks pursuant to
the same Borrowing shall, unless otherwise specifically provided herein, consist
entirely of Loans of the same Type, (iii) may be repaid and reborrowed in
accordance with the provisions hereof, (iv) shall not exceed for any Bank at any
time outstanding that aggregate principal amount which equals the Commitment of
such Bank at such time and (v) shall not exceed in the aggregate for all Banks
at any time outstanding that aggregate principal amount which, when added to the
then aggregate outstanding principal amount of all Competitive Bid Loans, equals
the Total Commitment at such time.
(b) Subject to and upon the terms and conditions herein set
forth, each Bank severally agrees that the Borrower may incur a loan or loans
(each a "Competitive Bid Loan" and collectively, the "Competitive Bid Loans")
pursuant to a Competitive Bid Borrowing at any time and from time to time on and
after the Restatement Effective Date and prior to the date which is the third
Business Day preceding the date which is seven days prior to the Final Maturity
Date, PROVIDED that after giving effect to any Competitive Bid Borrowing and the
use of the proceeds thereof, the aggregate outstanding principal amount of
Competitive Bid Loans, when combined with the then aggregate outstanding
principal amount of all Loans, shall not exceed the Total Commitment at such
time.
1.02 MINIMUM AMOUNT OF EACH BORROWING; MAXIMUM NUMBER OF
BORROWINGS. The aggregate principal amount of each Borrowing hereunder shall not
be less than (i) $5,000,000, in the case of Loans, and (ii) $10,000,000, in the
case of Competitive Bid Loans, and, if in excess thereof, shall be in an
integral multiple of $1,000,000. More than one Borrowing may be incurred on any
day; PROVIDED that at no time shall there be outstanding more than ten
Borrowings of Eurodollar Loans.
1.03 NOTICE OF BORROWING OF LOANS. (b) Whenever the Borrower
desires to incur Loans hereunder, it shall give the Agent at its Notice Office,
(x) in the case of a Borrowing of Eurodollar Loans, written notice (or
telephonic notice promptly confirmed in writing) of such proposed Borrowing
which notice must be given prior to 12:00 Noon (New York time) at least three
Business Days prior to the date of such proposed Borrowing and (y) in the case
of a Borrowing of Base Rate Loans, written notice (or telephonic notice promptly
confirmed in writing) of such proposed Borrowing, which notice must be given
prior to 11:00 A.M. (New York time) on the date of such proposed Borrowing. Each
such notice (each, a "Notice of Borrowing"), except as otherwise expressly
provided in Section 1.11, shall be irrevocable, and, in the case of a written
notice or a confirmation of telephonic notice, shall be in the form of Exhibit
A-1 hereto, appropriately completed to specify (i) the aggregate principal
amount of the Loans to be made pursuant to such Borrowing, (ii) the date of such
Borrowing (which shall be a Business Day) and (iii) whether the respective
Borrowing shall consist of Base Rate Loans or Eurodollar Loans and, if
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Agent shall promptly give each Bank written notice (or telephonic notice
promptly confirmed in writing) of each proposed Borrowing, of such Bank's
proportionate share thereof and of the other matters covered by the Notice of
Borrowing.
(b) Without in any way limiting the obligation of the Borrower
to confirm in writing any notice it may give hereunder by telephone, the Agent
may act prior to receipt of written confirmation without liability upon the
basis of such telephonic notice, believed by the Agent in good faith to be from
an Authorized Officer of the Borrower. In each such case the Borrower hereby
waives the right to dispute the Agent's record of the terms of any such
telephonic notice.
1.04 COMPETITIVE BID BORROWINGS. (a) Whenever the Borrower
desires to incur a Competitive Bid Borrowing, it shall deliver to the Agent,
prior to 12:00 Noon (New York time) (x) at least four Business Days prior to the
date of such proposed Competitive Bid Borrowing, in the case of a Spread
Borrowing, and (y) at least one Business Day prior to the date of such proposed
Competitive Bid Borrowing, in the case of an Absolute Rate Borrowing, a written
notice substantially in the form of Exhibit A-2 hereto (a "Notice of Competitive
Bid Borrowing"), which notice shall specify in each case (i) the date (which
shall be a Business Day) and the aggregate amount of the proposed Competitive
Bid Borrowing, (ii) the maturity date for repayment of each and every
Competitive Bid Loan to be made as part of such Competitive Bid Borrowing (which
maturity date may be (A) one, two, three or six months after the date of such
Competitive Bid Borrowing, in the case of a Spread Borrowing, and (B) between
seven and 364 days, inclusive, after the date of such Competitive Bid Borrowing,
in the case of an Absolute Rate Borrowing, PROVIDED that in no event shall the
maturity date of any Competitive Bid Borrowing be later than the third Business
Day preceding the Final Maturity Date), (iii) the interest payment
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date or dates relating thereto, (iv) whether the proposed Competitive Bid
Borrowing is to be an Absolute Rate Borrowing or a Spread Borrowing, and if a
Spread Borrowing, the Interest Rate Basis, and (v) any other terms to be
applicable to such Competitive Bid Borrowing. The Agent shall promptly notify
each Bidder Bank by telephone or facsimile of each such request for a
Competitive Bid Borrowing received by it from the Borrower and of the contents
of the related Notice of Competitive Bid Borrowing.
(b) Each Bidder Bank shall, if, in its sole discretion, it
elects to do so, irrevocably offer to make one or more Competitive Bid Loans to
the Borrower as part of such proposed Competitive Bid Borrowing at a rate or
rates of interest specified by such Bidder Bank in its sole discretion and
determined by such Bidder Bank independently of each other Bidder Bank, by
notifying the Agent (which shall give prompt notice thereof to the Borrower)
before 9:30 A.M. (New York time) on the date (the "Reply Date") which is (x) in
the case of an Absolute Rate Borrowing, the date of such proposed Competitive
Bid Borrowing and (y) in the case of a Spread Borrowing, three Business Days
before the date of such proposed Competitive Bid Borrowing, of the minimum
amount and maximum amount of each Competitive Bid Loan which such Bidder Bank
would be willing to make as part of such proposed Competitive Bid Borrowing
(which amounts may, subject to the proviso to the first sentence of Section
1.01(b), exceed such Bidder Bank's Commitment), the rate or rates of interest
therefor and such Bidder Bank's lending office with respect to such Competitive
Bid Loan; PROVIDED that if the Agent in its capacity as a Bidder Bank shall, in
its sole discretion, elect to make any such offer, it shall notify the Borrower
of such offer before 9:15 A.M. (New York time) on the Reply Date. If any Bidder
Bank shall elect not to make such an offer, such Bidder Bank shall so notify the
Agent, before 9:30 A.M. (New York time) on the Reply Date, and such Bidder Bank
shall not be obligated to, and shall not, make any Competitive Bid Loan as part
of such Competitive Bid Borrowing; PROVIDED that the failure by any Bidder Bank
to give such notice shall not cause such Bidder Bank to be obligated to make any
Competitive Bid Loan as part of such proposed Competitive Bid Borrowing.
(c) The Borrower shall, in turn, before 11:00 A.M. (New York time) on the
Reply Date, either:
(i) cancel such Competitive Bid Borrowing by giving the Agent notice
to such effect (it being understood and agreed that if the Borrower gives
no such notice of cancellation and no notice of acceptance pursuant to
clause (ii) below, then the Borrower shall be deemed to have cancelled such
Competitive Bid Borrowing), or
(ii) accept one or more of the offers made by any Bidder Bank or
Bidder Banks pursuant to clause (b) above by giving notice (in writing or
by telephone confirmed in writing) to the Agent of the amount of each
Competitive Bid Loan (which amount shall be equal to or greater than the
minimum amount, and equal to or less than the maximum amount, notified to
the Borrower by the Agent on behalf of such Bidder Bank for such
Competitive Bid Borrowing pursuant to clause (b) above) to be made by each
Bidder Bank as part of such Competitive Bid Borrowing, and reject any
remaining offers made by Bidder Banks pursuant to clause (b) above by
giving the Agent notice to that effect; PROVIDED that the acceptance of
offers may only be made on the basis of ascending
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Absolute Rates (in the case of an Absolute Rate Borrowing) or Spreads (in
the case of a Spread Borrowing), in each case commencing with the lowest
rate so offered; PROVIDED FURTHER, however, if offers are made by two or
more Bidder Banks at the same rate and acceptance of all such equal offers
would result in a greater principal amount of Competitive Bid Loans being
accepted than the aggregate principal amount requested by the Borrower, if
the Borrower elects to accept any of such offers the Borrower shall accept
such offers PRO RATA from such Bidder Banks (on the basis of the maximum
amounts of such offers) unless any such Bidder Bank's PRO RATA share would
be less than the minimum amount specified by such Bidder Bank in its offer,
in which case the Borrower shall have the right to accept one or more such
equal offers in their entirety and reject the other equal offer or offers
or to allocate acceptance among all such equal offers (but giving effect to
the minimum and maximum amounts specified for each such offer pursuant to
clause (b) above), as the Borrower may elect in its sole discretion.
(d) If the Borrower notifies the Agent that such Competitive Bid Borrowing
is cancelled, or if such Competitive Bid Borrowing is deemed cancelled, pursuant
to clause (c)(i) above, the Agent shall give prompt notice thereof to the Bidder
Banks and such Competitive Bid Borrowing shall not be made.
(e) If the Borrower accepts one or more of the offers made by any Bidder
Bank or Bidder Banks pursuant to clause (c)(ii) above, the Agent shall in turn
promptly notify (x) each Bidder Bank that has made an offer as described in
clause (b) above, of the date and aggregate amount of such Competitive Bid
Borrowing and whether or not any offer or offers made by such Bidder Bank
pursuant to clause (b) above have been accepted by the Borrower and (y) each
Bidder Bank that is to make a Competitive Bid Loan as part of such Competitive
Bid Borrowing, of the amount of each Competitive Bid Loan to be made by such
Bidder Bank as part of such Competitive Bid Borrowing.
1.05 DISBURSEMENT OF FUNDS. (a) Subject to the terms and
conditions herein set forth, no later than 11:00 A.M. (New York time) on the
date of each incurrence of Loans or Competitive Bid Loans (1:00 P.M. (New York
time) on such date in the case of a Borrowing of Base Rate Loans or a
Competitive Bid Borrowing constituting an Absolute Rate Borrowing), each Bank
will make available its PRO RATA share, if any, of each Borrowing requested to
be made on such date in the manner provided below.
(b) Each Bank shall make available all amounts it is to fund under any
Borrowing in U.S. dollars and immediately available funds to the Agent at the
Agent's Payment Office and the Agent will make available to the Borrower by
depositing to its account at the Agent's Payment Office the aggregate of the
amounts so made available in the type of funds received. Unless the Agent shall
have been notified by any Bank prior to the date of any such Borrowing that such
Bank does not intend to make available to the Agent its portion of the Borrowing
or Borrowings to be made on such date, the Agent may assume that such Bank has
made such amount available to the Agent on such date of Borrowing, and the
Agent, in reliance upon such assumption, may (in its sole discretion and without
any obligation to do so) make available to the Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the Agent by such
Bank and the Agent has made available same to the
4
Borrower, the Agent shall be entitled to recover such corresponding amount from
such Bank. If such Bank does not pay such corresponding amount forthwith upon
the Agent's demand therefor, the Agent shall promptly notify the Borrower, and
the Borrower shall immediately pay such corresponding amount to the Agent. The
Agent shall also be entitled to recover from such Bank or the Borrower, as the
case may be, interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the Agent to the
Borrower to the date such corresponding amount is recovered by the Agent, at a
rate per annum equal to (x) if paid by such Bank, the overnight Federal Funds
Effective Rate or (y) if paid by the Borrower, the then applicable rate of
interest, calculated in accordance with Section 1.09, for the respective Loans
or Competitive Bid Loans.
(c) Nothing in this Section 1.05 shall be deemed to relieve
any Bank from its obligation to fulfill its commitments hereunder or to
prejudice any rights which the Borrower may have against any Bank as a result of
any default by such Bank hereunder.
1.06 NOTES;REGISTER. (a) The Borrower's obligation to pay the
principal of, and interest on, the Loans made to it by each Bank shall be
evidenced by a promissory note substantially in the form of Exhibit B hereto
with blanks appropriately completed in conformity herewith (each a "Note" and
collectively the "Notes").
(b) The Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank and be dated the Restatement
Effective Date, (iii) be in a stated principal amount equal to the Commitment of
such Bank and be payable in the principal amount of the Loans evidenced thereby,
(iv) mature on the Final Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.09 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
mandatory repayment as provided in Section 3.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.
(c) Each Bank will record on its internal records the amount
of each Loan and Competitive Bid Loan made by it and each payment in respect
thereof and will prior to any transfer of its Note endorse on the reverse side
thereof the outstanding principal amount of Loans and Competitive Bid Loans
evidenced thereby. Failure to make any such notation or any error in any such
notation shall not affect the Borrower's obligations in respect of such Loans
and Competitive Bid Loans.
(d) The Agent shall maintain at its Payment Office a register
for the recordation of the names and addresses of the Banks, the Commitments of
the Banks from time to time, and the principal amount of the Loans and
Competitive Bid Loans owing to each Bank from time to time together with the
maturity and interest rates applicable to each such Competitive Bid Loan, and
other terms applicable thereto (the "Register"). The entries in the Register
shall constitute PRIMA FACIE evidence as to the information set forth therein.
1.07 CONVERSIONS. The Borrower shall have the option to
convert on any Business Day all or a portion at least equal to $5,000,000 (and,
if in excess thereof, an integral multiple of $1,000,000) of the outstanding
principal amount of the Loans of one Type owing by
5
the Borrower into a Borrowing or Borrowings of the other Type; PROVIDED that (i)
except as otherwise provided in Section 1.11(b), Eurodollar Loans may be
converted into Base Rate Loans only on the last day of an Interest Period
applicable thereto, and no partial conversion of a Borrowing of Eurodollar Loans
shall reduce the outstanding principal amount of the Eurodollar Loans pursuant
to such Borrowing to less than $5,000,000, (ii) Base Rate Loans may only be
converted into Eurodollar Loans if no Default or Event of Default is in
existence on the date of the conversion, (iii) Borrowings of Eurodollar Loans
resulting from this Section 1.07 shall be limited in number as provided in
Section 1.02 and (iv) each such conversion shall be made PRO RATA among the
Loans of each Bank of the Type being converted. Each such conversion shall be
effected by the Borrower by giving the Agent at its Notice Office, prior to
12:00 Noon (New York time), at least three Business Days' (or one Business Day's
in the case of a conversion into Base Rate Loans) prior written notice (or
telephonic notice promptly confirmed in writing) (each a "Notice of Conversion")
specifying the Loans to be so converted, the Type of Loans to be converted into
and, if to be converted into a Borrowing of Eurodollar Loans, the Interest
Period to be initially applicable thereto. The Agent shall give each Bank prompt
notice of any such proposed conversion.
1.08 PRO RATA BORROWINGS. All Borrowings of Loans under this
Agreement shall be loaned by the Banks PRO RATA on the basis of their respective
Commitments. It is understood that no Bank shall be responsible for any default
by any other Bank in its obligation to make Loans or Competitive Bid Loans
hereunder and that each Bank shall be obligated to make the Loans and
Competitive Bid Loans provided to be made by it hereunder, regardless of the
failure of any other Bank to fulfill its commitments hereunder.
1.09 INTEREST. (a) The unpaid principal amount of each Base
Rate Loan shall bear interest from the date of the incurrence thereof until
maturity (whether by acceleration or otherwise) at a rate per annum which shall
at all times be the Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall
bear interest from the date of the incurrence thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Applicable Eurodollar Margin plus the relevant Eurodollar Rate.
(c) The unpaid principal amount of each Competitive Bid Loan
shall bear interest from the date of the incurrence thereof until maturity
(whether by acceleration or otherwise) at the rate or rates per annum specified
by a Bidder Bank or Bidder Banks, as the case may be, pursuant to Section
1.04(b) and accepted by the Borrower pursuant to Section 1.04(c).
(d) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and Competitive Bid Loan shall bear
interest at a rate per annum equal to the Base Rate in effect from time to time
plus 2%; PROVIDED that principal in respect of Eurodollar Loans and Competitive
Bid Loans shall bear interest after the same becomes due (whether by
acceleration or otherwise) until the end of the applicable Interest Period for
such Eurodollar Loans, or the original scheduled maturity of such Competitive
Bid Loans, as the case may be, at a per annum rate equal to 2% plus the rate of
interest applicable on the due date therefor.
6
(e) Interest shall accrue from and including the date of any
incurrence of a Loan or a Competitive Bid Loan to and excluding the date of any
repayment thereof and shall be payable (i) in respect of each Base Rate Loan,
quarterly in arrears on the last Business Day of each calendar quarter, (ii) in
respect of each Competitive Bid Loan, at such times as specified in the Notice
of Competitive Bid Borrowing relating thereto, (iii) in respect of each
Eurodollar Loan, on the last day of each Interest Period applicable thereto and,
in the case of an Interest Period in excess of three months, on each date
occurring at three month intervals after the first day of such Interest Period
and (iv) in respect of each Loan or Competitive Bid Loan, on any conversion or
prepayment (on the amount so converted or prepaid), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(f) All computations of interest hereunder shall be made in
accordance with Section 11.07(b).
(g) The Agent, upon determining the interest rate for any
Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify the
Borrower and the Banks thereof.
1.10 INTEREST PERIODS. At the time the Borrower gives a Notice
of Borrowing or Notice of Conversion, in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto), or prior to 12:00 Noon (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, it shall have the right to elect by giving the
Agent written notice (or telephonic notice promptly confirmed in writing) of the
Interest Period to be applicable to such Borrowing, which Interest Period shall,
at the option of the Borrower, be a one, two, three or six month period.
Notwithstanding anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing of Base Rate
Loans) and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding
Interest Period expires;
(ii) if any Interest Period begins on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, PROVIDED that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business
Day;
(iv) no Interest Period may be elected if it would extend
beyond the Final Maturity Date; and
7
(v) no Interest Period may be elected at any time when a
Default or Event of Default is then in existence.
If upon the expiration of any Interest Period, the Borrower
has failed, or is not permitted, to elect a new Interest Period to be applicable
to any Borrowing of Eurodollar Loans as provided above, the Borrower shall be
deemed to have elected to convert such Borrowing into a Borrowing of Base Rate
Loans effective as of the expiration date of such current Interest Period.
1.11 INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that
(1) in the case of clause (i) below, the Agent or (2) in the case of clauses
(ii) and (iii) below, any Bank shall have determined (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto):
(i) on any date for determining the Eurodollar Rate for any Interest
Period or in respect of any Spread Borrowing priced by reference to the
Eurodollar Rate that, by reason of any changes arising after the
Restatement Effective Date affecting the interbank Eurodollar market,
adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Eurodollar
Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loans or Competitive Bid Loans because of (x) any change
since the Restatement Effective Date (or, in the case of any such cost or
reduction with respect to any Competitive Bid Loan, since the making of
such Competitive Bid Loan) in any applicable law, governmental rule,
regulation, guideline, order or request (whether or not having the force of
law) or in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, guideline,
order or request (such as, for example, but not limited to, a change in
official reserve requirements, but, in all events, excluding reserves
required under Regulation D to the extent included in the computation of
the Eurodollar Rate) and/or (y) other circumstances affecting the interbank
Eurodollar market or the position of such Bank in such market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan or Competitive Bid Loan has become unlawful by compliance by such Bank
in good faith with any law, governmental rule, regulation, guideline or
order (or would conflict with any such governmental rule, regulation,
guideline or order not having the force of law but with which such Bank
customarily complies even though the failure to comply therewith would not
be unlawful), or has become impracticable as a result of a contingency
occurring after the Restatement Effective Date which materially and
adversely affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Agent in the case of clause (i)
above to the extent applicable to Loans) shall on such date give notice (if by
telephone promptly confirmed in writing) to the Borrower and to the Agent of
such determination (which notice the Agent shall promptly transmit to each of
the other Banks). Thereafter (x) in the case of clause (i) above, Eurodollar
8
Loans (or Competitive Bid Loans constituting a Spread Borrowing priced by
reference to the Eurodollar Rate) shall no longer be available until such time
as the Agent notifies the Borrower and the Banks that the circumstances giving
rise to such notice by the Agent no longer exist, and any Notice of Borrowing,
Notice of Competitive Bid Borrowing or Notice of Conversion given by the
Borrower with respect to Eurodollar Loans (or any affected Competitive Bid
Loans) which have not yet been incurred shall be deemed rescinded by the
Borrower, (y) in the case of clause (ii) above, the Borrower shall pay to such
Bank, upon written demand therefor, such additional amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Bank in its reasonable discretion shall determine) as shall be required
to compensate such Bank for such increased costs or reductions in amounts
receivable hereunder (a written notice as to the additional amounts owed to such
Bank, showing in reasonable detail the basis for the calculation thereof,
including such Bank's method of allocating such costs among its affected
customers, submitted to the Borrower by such Bank shall, absent manifest error,
be final and conclusive and binding upon all parties hereto) and (z) in the case
of clause (iii) above, the Borrower shall take one of the actions specified in
Section 1.11(b) as promptly as possible and, in any event, within the time
period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.11(a)(ii) or any Eurodollar Loan or
Competitive Bid Loan is affected by the circumstances described in Section
1.11(a)(iii), the Borrower may (and in the case of a Eurodollar Loan or
Competitive Bid Loan affected pursuant to Section 1.11(a)(iii) shall) either (x)
if the affected Eurodollar Loan or Competitive Bid Loan is then being made
pursuant to a Borrowing, cancel said Borrowing by giving the Agent telephonic
notice (promptly confirmed in writing) thereof on the same date that the
Borrower was notified by a Bank pursuant to Section 1.11(a)(ii) or (iii), (y) if
the affected Eurodollar Loan is then outstanding, upon at least three Business
Days' notice to the Agent, require the affected Bank to convert each such
Eurodollar Loan into a Base Rate Loan or (z) subject to the provisions of
Section 3.02(c), if the affected Competitive Bid Loan is then outstanding,
prepay such Competitive Bid Loan in full (which prepayment may be made with the
proceeds of a Loan); PROVIDED, that if more than one Bank is affected at any
time, then all affected Banks must be treated the same pursuant to this Section
1.11(b).
(c) If any Bank shall have determined that the adoption after the
Restatement Effective Date of any applicable law, rule or regulation regarding
capital adequacy, or any change therein after the Restatement Effective Date, or
any change after the Restatement Effective Date in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Bank or its parent with any request or directive made after the
Restatement Effective Date regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on such Bank's or its
parent's capital or assets as a consequence of its commitments or obligations
hereunder to a level below that which such Bank or its parent could have
achieved but for such adoption, change or compliance (taking into consideration
such Bank's or its parent's policies with respect to capital adequacy), then
from time to time, within 30 days after demand by such Bank (with a copy to the
Agent), the Borrower shall pay to such Bank or its parent such additional amount
or amounts as will compensate such Bank or its parent for such reduction. Each
9
Bank, upon determining in good faith that any additional amounts will be payable
pursuant to this Section 1.11(c), will give prompt written notice thereof to the
Borrower, which notice shall set forth in reasonable detail the basis of the
calculation of such additional amounts, including such Bank's method of
allocating such costs among its affected customers, although the failure to give
any such notice on a timely basis shall not release or diminish any of the
Borrower's obligations to pay additional amounts pursuant to this Section
1.11(c) upon receipt of such notice.
1.12 COMPENSATION. The Borrower shall compensate each Bank, upon its
written request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Bank to
fund its Eurodollar Loans or Competitive Bid Loans but excluding any loss of
anticipated profit with respect to such Loans or Competitive Bid Loans) which
such Bank may sustain: (i) if for any reason (other than a default by such Bank
or the Agent) a Borrowing of Eurodollar Loans or of Competitive Bid Loans
accepted by the Borrower in accordance with Section 1.04(c)(ii), does not occur
on a date specified therefor in a Notice of Borrowing, Notice of Competitive Bid
Borrowing or Notice of Conversion (whether or not withdrawn by the Borrower or
deemed withdrawn pursuant to Section 1.11(a)); (ii) if any repayment, prepayment
or conversion of any of its Eurodollar Loans or any repayment of Competitive Bid
Loans occurs on a date which is not the last day of an Interest Period
applicable thereto; (iii) if any prepayment of any of its Eurodollar Loans or
Competitive Bid Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its Eurodollar Loans or Competitive Bid Loans
when required by the terms of this Agreement or (y) an election made pursuant to
Section 1.11(b). Calculation of all amounts payable to a Bank under this Section
1.12 in respect of Eurodollar Loans or Competitive Bid Loans priced by reference
to the Eurodollar Rate shall be made as though that Bank had actually funded its
relevant Loan or Competitive Bid Loan through the purchase of a Eurodollar
deposit bearing interest at the Eurodollar Rate in an amount equal to the amount
of that Loan or Competitive Bid Loan, having a maturity comparable to the
relevant Interest Period and through the transfer of such Eurodollar deposit
from an offshore office of that Bank or other bank to a domestic office of that
Bank in the United States of America; PROVIDED, HOWEVER, that each Bank may fund
each of its Eurodollar Loans or Competitive Bid Loans in any manner it sees fit
and the foregoing assumption shall be utilized only for the calculation of
amounts payable under this Section 1.12.
1.13 CHANGE OF LENDING OFFICE. Each Bank agrees that, upon the occurrence
of any event giving rise to the operation of Section 1.11(a)(ii) or (iii) or
3.04 with respect to such Bank, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Bank) to
designate another lending office for any Loans or Competitive Bid Loans affected
by such event; PROVIDED, that such designation is made on such terms that, in
the opinion of such Bank, such Bank and its lending office suffer no economic,
legal or regulatory disadvantage, with the object of avoiding the consequence of
the event giving rise to the operation of any such Section. Nothing in this
Section 1.13 shall affect or postpone any of the obligations of the Borrower or
the right of any Bank provided in Section 1.11 or 3.04.
SECTION 2. FEES; COMMITMENTS.
10
2.01 FEES. (a) The Borrower agrees to pay to the Agent a
facility fee (the "Facility Fee") for the account of the Banks PRO RATA on the
basis of their respective Commitments for the period from and including the
Restatement Effective Date to and excluding the date the Total Commitment has
been terminated, computed at a rate per annum equal to the Applicable Facility
Fee Percentage from time to time of the Total Commitment as in effect from time
to time. Accrued Facility Fees shall be due and payable in arrears on the last
Business Day of each March, June, September and December, and on the date upon
which the Total Commitment is terminated.
(b) The Borrower agrees to pay to the Agent a utilization fee
(the "Utilization Fee") for the account of the Banks PRO RATA on the basis of
their respective outstanding Loans for the period from and including the
Restatement Effective Date to and excluding the date the Total Commitment has
been terminated and all outstanding Loans have been repaid in full, computed at
a rate per annum equal to the Applicable Utilization Fee Percentage from time to
time of the aggregate outstanding principal amount of Loans from time to time.
Accrued Utilization Fees shall be due and payable in arrears on the last
Business Day of each March, June, September and December, on the date which the
Total Commitment is terminated and on any date thereafter when all outstanding
Loans are paid in full.
(c) In addition to any fees set forth herein, the Borrower
shall pay to the Agent, for the account of the Agent, when and as due, such fees
as have been, or are from time to time, separately agreed upon.
(d) All computations of Fees shall be made in accordance with
Section 11.07(b).
2.02 VOLUNTARY REDUCTION OF COMMITMENTS. Upon at least three
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) given by the Borrower to the Agent at its Notice Office (which notice
shall be irrevocable and shall be promptly transmitted by the Agent to each of
the Banks), the Borrower shall have the right, without premium or penalty, to
terminate, in whole or in part, the Total Unutilized Commitment (or to the
extent that at such time there are no Loans or Competitive Bid Loans
outstanding, to terminate the Total Commitment), PROVIDED, that (x) any partial
reduction of the Total Unutilized Commitment pursuant to this Section 2.02 shall
be in the amount of at least $10,000,000 (and, if greater, in an integral
multiple of $1,000,000), and (y) any such termination shall apply to
proportionately and permanently reduce the Commitment of each of the Banks.
2.03 MANDATORY REDUCTION OF COMMITMENTS. The Total Commitment shall
terminate on the Final Maturity Date.
SECTION 3. PAYMENTS.
3.01 VOLUNTARY PREPAYMENTS. The Borrower shall have the right
to prepay Loans, without premium or penalty, in whole or in part, from time to
time on the following terms and conditions: (i) the Borrower shall give the
Agent at its Notice Office written notice (or telephonic notice promptly
confirmed in writing) of its intent to prepay the Loans, the amount of such
prepayment and (in the case of Eurodollar Loans) the specific Borrowing(s)
pursuant to which
11
made, which notice shall be given by the Borrower no later than 12:00 Noon (New
York time) two Business Days prior to the date of such prepayment, and which
notice shall promptly be transmitted by the Agent to each of the Banks; (ii)
each partial prepayment of any Borrowing shall be in an aggregate principal
amount of at least $5,000,000 (and, if greater, in an integral multiple of
$1,000,000), PROVIDED that no partial prepayment of Eurodollar Loans made
pursuant to a Borrowing shall reduce the aggregate principal amount of the Loans
outstanding pursuant to such Borrowing to an amount less than $5,000,000; (iii)
prepayments of Eurodollar Loans made pursuant to this Section 3.01 may only be
made on the last day of an Interest Period applicable thereto; and (iv) each
prepayment in respect of any Loans made pursuant to a Borrowing shall be applied
PRO RATA among such Loans. Upon receipt of a notice of prepayment pursuant to
this Section 3.01, the Agent shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share of such prepayment. The Borrower shall
have no right under this Section 3.01 to prepay any principal amount of any
Competitive Bid Loans.
3.02 MANDATORY PREPAYMENTS AND REPAYMENTS. (a) If on any date
the sum of the outstanding principal amount of Loans and Competitive Bid Loans
(all the foregoing, collectively, the "Aggregate Loan Outstandings") exceeds the
Total Commitment as then in effect, the Borrower shall prepay on such date the
principal of Loans, in an amount equal to such excess. If, after giving effect
to the prepayment of all outstanding Loans as set forth above, the remaining
Aggregate Loan Outstandings exceed the Total Commitment, the Borrower shall
repay on such date the principal of Competitive Bid Loans in an aggregate amount
equal to such excess, PROVIDED that no Competitive Bid Loan shall be prepaid
pursuant to this sentence unless the Bank that made same consents to such
prepayment. In the absence of such consent, the provisions of Section 3.02(c)
shall be applicable.
(b) With respect to each prepayment or repayment of Loans
required by this Section 3.02, the Borrower may designate the Types of Loans
which are to be prepaid and the specific Borrowing(s) pursuant to which made;
PROVIDED, that (i) if any prepayment of Eurodollar Loans made pursuant to a
single Borrowing shall reduce the outstanding Loans made pursuant to such
Borrowing to an amount less than $5,000,000, such Borrowing shall be immediately
converted into Base Rate Loans; and (ii) each prepayment of any Loans made
pursuant to a Borrowing shall be applied PRO RATA among such Loans. In the
absence of a designation of Loans by the Borrower as described in this Section
3.02(b), the Agent shall, subject to the above, make such designation in its
sole discretion with a view, but no obligation, to minimize breakage costs owing
under Section 1.12.
(c) At any time that the Borrower is obligated to prepay any
Competitive Bid Loan pursuant to Section 1.11(b) or 3.02(a) on a date other than
the scheduled maturity date thereof, such prepayment shall only be made if the
respective Bank that made such Competitive Bid Loan has consented in writing (or
by telephone confirmed in writing) to the Borrower to such prepayment within 48
hours after notice (in writing or by telephone confirmed in writing) by the
Borrower to such Bank of such prepayment (it being understood that the Borrower
will give such notice and that any failure to respond to such notice will
constitute a rejection thereof); if such prepayment is not so consented to by
the respective Bank then, in the case of a prepayment otherwise required
pursuant to Section 3.02(a), the provisions of the immediately succeeding
sentence will be applicable. At the time any such Competitive Bid Loans are
otherwise required
12
to be prepaid, the Borrower will deposit 100% of the principal amount that
otherwise would have been paid in respect of the Competitive Bid Loans with the
Agent to be held as security for the obligations of the Borrower hereunder
pursuant to a cash collateral agreement to be entered into in form and substance
satisfactory to the Agent, with such cash collateral to be released from such
cash collateral account (and applied to repay the principal amount of such
Competitive Bid Loans) upon each occurrence thereafter of the last day of an
Interest Period applicable to the relevant Competitive Bid Loans, with the
amount to be so released and applied on the last day of each Interest Period to
be the amount of the Competitive Bid Loans to which such Interest Period applies
(or, if less, the amount remaining in such cash collateral account).
3.03 METHOD AND PLACE OF PAYMENT. Except as otherwise
specifically provided herein, all payments under this Agreement and the Notes
shall be made to the Agent for the ratable account of the Banks entitled
thereto, not later than 12:30 Noon (New York time) on the date when due and
shall be made in immediately available funds and in lawful money of the United
States of America at the Agent's Payment Office, it being understood that
written, telex or facsimile notice by the Borrower to the Agent to make a
payment from the funds in the Borrower's account at the Agent's Payment Office
shall constitute the making of such payment to the extent of such funds held in
such account. Any payments under this Agreement which are made later than 12:30
p.m. (New York time) shall be deemed to have been made on the next succeeding
Business Day. Whenever any payment to be made hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
3.04 NET PAYMENTS. All payments made by the Borrower hereunder will be made
without setoff or counterclaim. Promptly upon notice from any Bank to the
Borrower, the Borrower will pay, prior to the date on which penalties attach
thereto, all present and future income, stamp and other taxes, levies, costs and
charges whatsoever imposed, assessed, levied or collected on or in respect of a
Loan or a Competitive Bid Loan solely as a result of the interest rate being
determined by reference to the Eurodollar Rate and/or the provisions of this
Agreement relating to the Eurodollar Rate and/or the recording, registration,
notarization or other formalization of any thereof and/or any payments of
principal, interest or other amounts made on or in respect of a Loan or a
Competitive Bid Loan when the interest rate is determined by reference to the
Eurodollar Rate (all such taxes, levies, costs and charges being herein
collectively called "Taxes"); PROVIDED that Taxes shall not include taxes
imposed on or measured by the overall net income or overall net profits of that
Bank by the United States of America or any political subdivision or taxing
authority thereof or therein, or taxes on or measured by the overall net income
or overall net profits of any foreign branch or subsidiary of that Bank by any
foreign country or subdivision thereof in which that branch or subsidiary is
doing business. The Borrower shall also pay such additional amounts equal to
increases in taxes payable by that Bank described in the foregoing proviso which
increases are attributable to payments made by the Borrower described in the
immediately preceding sentence of this Section 3.04. Promptly after the date on
which payment of any such Tax is due pursuant to applicable law, the Borrower
will, at the request of that Bank, furnish to that Bank evidence, in form and
substance satisfactory to that Bank, that the Borrower has met its obligation
under this Section 3.04. The Borrower will indemnify each Bank against, and
reimburse each Bank on demand for, any Taxes, as determined
13
by that Bank in its good faith discretion. Such Bank shall provide the Borrower
with appropriate receipts for any payments or reimbursements made by the
Borrower pursuant to this Section 3.04. Notwithstanding the foregoing, the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold (and shall not be required to make payments as otherwise
required in this Section 3.04 on account of such deductions or withholdings)
income or other similar taxes imposed by the United States of America from
interest, fees or other amounts payable hereunder for the account of any Bank
other than a Bank (i) who is a U.S. Person for Federal income tax purposes or
(ii) who has the Prescribed Forms on file with the Borrower for the applicable
year to the extent deduction or withholding of such taxes is not required as a
result of the filing of such Prescribed Forms, PROVIDED that if the Borrower
shall so deduct or withhold any such taxes, it shall provide a statement to the
Agent and such Bank, setting forth the amount of such taxes so deducted or
withheld, the applicable rate and any other information or documentation which
such Bank may reasonably request for assisting such Bank to obtain any allowable
credits or deductions for the taxes so deducted or withheld in the jurisdiction
or jurisdictions in which such Bank is subject to tax.
SECTION 4. CONDITIONS PRECEDENT.
4.01 CONDITIONS PRECEDENT TO AMENDMENT AND RESTATEMENT. This Agreement
shall become effective, and the Existing Credit Agreement shall be amended and
restated in its entirety as set forth herein, on the date (the "Restatement
Effective Date") on which all of the following conditions have been satisfied or
waived:
(a) EFFECTIVENESS; NOTES. The Borrower and each of the Banks shall have
signed a copy of this Agreement (whether the same or different copies) and shall
have delivered the same to the Agent at the Agent's Notice Office or, in the
case of the Banks, shall have given to the Agent telephonic (confirmed in
writing), written, telex or telecopy notice (actually received) at such office
that the same has been signed and mailed to the Agent. In addition, there shall
have been delivered to the Agent for the account of each Bank the appropriate
Notes executed by the Borrower in the amount, maturity and as otherwise provided
herein.
(b) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. On the Restatement
Effective Date (both before and after giving effect to the amendment and
restatement), (i) there shall exist no Default or Event of Default and (ii) all
of the representations and warranties contained herein or in the other Credit
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on and as of
such date, unless stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date.
(c) OFFICER'S CERTIFICATE. On the Restatement Effective Date, the Agent
shall have received a certificate dated such date, signed by an appropriate
officer of the Borrower, stating that all of the applicable conditions set forth
in Section 4.01(b), (f), (g), (h) and (j) exist or have been satisfied as of
such date.
(d) OPINIONS OF COUNSEL. On the Restatement Effective Date, the Agent shall
have received an opinion, or opinions, in form and substance reasonably
satisfactory to the Agent,
14
addressed to each of the Banks and dated the Restatement Effective Date, from
(i) Xxxx X. Xxxxxx, Esq., General Counsel of the Borrower, which opinion shall
be substantially in the form of Exhibit C-1 hereto and (ii) White & Case LLP,
special counsel to the Agent and the Banks, which opinion shall be substantially
in the form of Exhibit C-2 hereto.
(e) CORPORATE PROCEEDINGS. (i) On the Restatement Effective
Date, the Banks shall have received a certificate, dated the Restatement
Effective Date, signed by the President or any Vice President of the Borrower,
and attested to by the Secretary or any Assistant Secretary of the Borrower, in
the form of Exhibit D hereto with appropriate insertions, together with copies
of the Certificate of Incorporation and By-Laws of the Borrower, the resolutions
of the Borrower and the other documents referred to in such certificate, and the
foregoing shall be reasonably satisfactory to the Agent.
(ii) On the Restatement Effective Date, all corporate and
legal proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Credit Documents shall
be reasonably satisfactory in form and substance to the Agent, and the Agent
shall have received all information and copies of all certificates, documents
and papers, including records of corporate proceedings and governmental
approvals, if any, which the Agent reasonably may have requested in connection
therewith, such documents and papers where appropriate to be certified by proper
corporate or governmental authorities.
(f) REPAYMENT OF EXISTING OBLIGATIONS. After giving effect to the
application of the proceeds of any Borrowing which may occur on the Restatement
Effective Date, all Existing Obligations shall have been paid in full through
and including such date, whether or not then due and payable.
(g) ADVERSE CHANGE, ETC. On or prior to the Restatement Effective Date,
since December 31, 1998, nothing shall have occurred which the Agent or the
Required Banks shall determine (i) has, or could reasonably be expected to have,
a material adverse effect on the rights or remedies of the Agent or the Banks,
or on the ability of the Borrower to perform its obligations to them hereunder
or under any other Credit Document, (ii) has, or could reasonably be expected to
have, a material adverse effect on the corporate, organizational or legal
structure of the Borrower or its Subsidiaries or (iii) has, or could reasonably
be expected to have, a materially adverse effect on the condition (financial or
otherwise, determined pursuant to GAAP or SAP), businesses, operations,
properties, assets, liabilities, investments or prospects of the Borrower and
its Subsidiaries taken as a whole, it being understood that, changes in the
market value of securities held in the Borrower's investment portfolio alone
shall not constitute a material adverse effect of the type described in clause
(iii) above.
(h) LITIGATION. On the Restatement Effective Date, there shall be no
actions, suits or proceedings pending or threatened with respect to the Borrower
or any of its Subsidiaries which in the judgment of the Agent or the Required
Banks could reasonably be expected to (i) have a material adverse effect on the
condition (financial or otherwise, determined pursuant to GAAP or SAP),
businesses, operations, properties, assets, liabilities, investments or
prospects of the Borrower and its Subsidiaries taken as a whole or (ii) have a
material adverse effect on the rights or remedies of the Banks hereunder or
under any other Credit Document or on the ability of
15
the Borrower to perform its obligations to the Banks hereunder or under any
other Credit Document.
(i) FINANCIAL STATEMENTS. Prior to the Restatement Effective Date, the
Borrower shall have delivered or caused to be delivered to the Agent and to each
Bank:
(i) the audited consolidated and unaudited consolidating balance sheet
of the Borrower as of December 31, 1998, and the related consolidated and
consolidating statements of income and of stockholders' equity and
consolidated statements of cash flows for the fiscal year then ended, in
each case prepared in accordance with GAAP;
(ii) the audited balance sheet of FFC as of December 31, 1998, and the
related statements of income, of stockholders' equity and of cash flows for
the fiscal year then ended, in each case prepared in accordance with GAAP;
(iii) the audited balance sheet of each Material Insurance Subsidiary
as of December 31, 1998, and the related statements of income, of
stockholders' equity and of cash flows for the fiscal year then ended, in
each case prepared in accordance with SAP and as filed with the Applicable
Insurance Regulatory Authority;
(iv) the audited consolidated balance sheet of FIL and its
Subsidiaries as of December 31, 1998, and the related statements of income,
of stockholders' equity and of cash flows for the fiscal year then ended,
in each case prepared in accordance with GAAP; and
(v) the unaudited consolidated balance sheet of the Borrower as of
March 31, 1999, and the related consolidated statements of income, of
stockholders' equity and of cash flows for the quarter then ended, in each
case prepared in accordance with GAAP (subject to normal year-end audit
adjustments).
(j) APPROVALS. On the Restatement Effective Date, all necessary and
material governmental and third party approvals and filings in connection
with the Credit Documents and otherwise referred to herein including the
approval of the California Department of Insurance, to the extent such
approvals and filings are required to be obtained or made prior to the
Restatement Effective Date, shall have been obtained and remain in full
force and effect, and all applicable waiting periods shall have expired
without any action being taken by any competent authority which restrains,
prevents or imposes, in the judgment of the Required Banks or the Agent,
materially adverse conditions upon the consummation of the transactions
contemplated thereby.
(k) PAYMENT OF FEES. On the Restatement Effective Date, all costs,
fees and expenses, and all other compensation contemplated by this
Agreement or the other Credit Documents, due to the Agent or any Banks
shall have been paid to the extent due.
(l) CONSENT LETTER. On the Restatement Effective Date, the Agent shall
have received a letter from CT Corporation System, substantially in the
form of Exhibit E hereto, indicating its consent to its appointment by the
Borrower as its agent to receive service of process as specified in Section
11.08.
16
(m) NOTICE OF BORROWING. The Agent shall have received a Notice of
Borrowing satisfying the requirements of Section 1.03 in the case of a Borrowing
of Loans, or a Notice of Competitive Bid Borrowing satisfying the requirements
of Section 1.04 in the case of a Borrowing of Competitive Bid Loans.
The acceptance of the benefits of each Loan and Competitive Bid Loan shall
constitute a representation and warranty by the Borrower to each of the Banks
that all of the applicable conditions specified above exist or have been
satisfied as of such date. All of the certificates, legal opinions and other
documents and papers referred to in this Section 4, unless otherwise specified,
shall be delivered to the Agent at its Notice Office for the account of each of
the Banks and, except for the Notes, in sufficient counterparts for each of the
Banks and shall be reasonably satisfactory in form and substance to the Agent.
4.02 CONDITIONS PRECEDENT TO BORROWINGS. The obligation of the
Banks to make any Loan or Competitive Bid Loan to the Borrower hereunder is
subject, at the time of the making of such Loan or Competitive Bid Loan, to the
satisfaction of the following conditions:
(a) NOTICE OF BORROWING. The Agent shall have received a
Notice of Borrowing satisfying the requirements of Section 1.03 in the case of a
Borrowing of Loans, or a Notice of Competitive Bid Borrowing satisfying the
requirements of Section 1.04 in the case of a Borrowing of Competitive Bid
Loans.
(b) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of
the making of such Loan or Competitive Bid Loan and also after giving effect
thereto, (i) there shall exist no Default or Event of Default and (ii) all
representations and warranties contained herein or in the other Credit Documents
shall be true and correct in all material respects with the same effect as
though such representations and warranties had been made on and as of the date
of such Loan or Competitive Bid Loan, as the case may be, unless stated to
relate to a specific earlier date, in which case such representations and
warranties shall have been true and correct in all material respects as of such
earlier date.
The acceptance of the benefits of each Loan and Competitive
Bid Loan shall constitute a representation and warranty by the Borrower to each
of the Banks that all of the applicable conditions specified above exist or have
been satisfied as of such date.
SECTION 5 REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In order
to induce the Banks to enter into this Agreement and to make the Loans and
Competitive Bid Loans provided for herein, the Borrower makes the following
representations and warranties to, and agreements with, the Banks, all of which
shall survive the execution and delivery of this Agreement and the making of the
Loans and Competitive Bid Loans (with the making of each Loan and Competitive
Bid Loan being deemed to constitute a representation and warranty that the
matters specified in this Section 5 are true and correct in all material
respects on and as of the date of the making of each such Loan or Competitive
Bid Loan, as the case may be, unless such representation and warranty expressly
indicates that it is being made as of any specific date in which case such
representation and warranty shall be true and correct in all material respects
as of such specified date):
17
5.01 CORPORATE STATUS. The Borrower and each of its
Subsidiaries (i) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its organization and has the
corporate or other organizational power and authority to own its property and
assets and to transact the business in which it is engaged and presently
proposes to engage and (ii) has duly qualified and is authorized to do business
and is in good standing in all jurisdictions where it is required to be so
qualified and where the failure to be so qualified would have a material adverse
effect on the condition (financial or otherwise, determined pursuant to GAAP or
SAP), businesses, operations, properties, assets, liabilities or investments of
the Borrower and its Subsidiaries taken as a whole.
5.02 CORPORATE POWER AND AUTHORITY. The Borrower has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of each of the Credit Documents to which it is a party and has taken
all necessary corporate action to authorize the execution, delivery and
performance of its obligations under each of the Credit Documents. The Borrower
has duly executed and delivered each such Credit Document and each such Credit
Document constitutes the legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms.
5.03 NO VIOLATION. Neither the execution, delivery and
performance by the Borrower of the Credit Documents to which it is a party, nor
compliance with the terms and provisions thereof, nor the consummation of the
transactions contemplated therein (i) will contravene any applicable provision
of any law, statute, rule, regulation, order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will conflict or be inconsistent
with or result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of the Borrower or any of its Subsidiaries pursuant to the
terms of, any indenture, mortgage, deed of trust, loan agreement or other
material instrument to which the Borrower or any of its Subsidiaries is a party
or by which it or any of its property or assets are bound or to which it may be
subject or (iii) will violate any provision of the charter or By-Laws of the
Borrower or any of its Subsidiaries.
5.04 LITIGATION. There are no actions, suits or proceedings
pending or, to the Borrower's knowledge, threatened, with respect to the
Borrower or any of its Subsidiaries (i) that are reasonably likely to have a
material adverse effect on the condition (financial or otherwise, determined
pursuant to GAAP or SAP), businesses, operations, properties, assets,
liabilities or investments of the Borrower and its Subsidiaries taken as a whole
or (ii) that could reasonably be expected to have a material adverse effect on
the rights or remedies of the Banks or the Agent or on the ability of the
Borrower to perform its obligations to them hereunder and under the other Credit
Documents.
5.05 USE OF PROCEEDS. (a) Subject to Section 5.05(b) and (c),
all proceeds of the Loans and Competitive Bid Loans shall be utilized to (i)
repay the Existing Obligations, (ii) to pay fees and expenses in connection
therewith and (iii) for general corporate purposes of the Borrower and its
Subsidiaries.
18
(b) Neither the making of any Loan or Competitive Bid Loan
hereunder, nor the use of the proceeds thereof, will violate or be inconsistent
with the provisions of Regulation T, U or X of the Board of Governors of the
Federal Reserve System. At the time of the making of each Loan or Competitive
Bid Loan, not more than 25% of the value of the assets of the Borrower, or of
the Borrower and its Subsidiaries on a consolidated basis, in each case which
are subject to the provisions of Section 7, shall constitute Margin Stock.
(c) Notwithstanding the foregoing provisions of this Section
5.05, no proceeds of any Loan or any Competitive Bid Loan will be utilized to
purchase any capital stock or other ownership interests of a Person in a
transaction, or as part of a series of transactions, the result of which is the
ownership by the Borrower and/or its Subsidiaries of 5% or more of the capital
stock or other ownership interests of such Person unless the Board of Directors
(or similar body if such Person is not a corporation) of such Person has
approved such transaction prior to any public announcement of the purchase, or
the intent to purchase, any such capital stock or ownership interests.
5.06 GOVERNMENTAL APPROVALS. No order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any foreign or domestic governmental or public body or
authority, or any subdivision thereof, is required to authorize or is required
in connection with (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of any
Credit Document.
5.07 INVESTMENT COMPANY ACT. Neither the Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
5.08 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower
nor any of its Subsidiaries 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.
5.09 TRUE AND COMPLETE DISCLOSURE. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on behalf of
the Borrower or any of its Subsidiaries in writing to the Agent or any Bank
(including, without limitation, all such information contained in the Credit
Documents) for purposes of or in connection with this Agreement, the other
Credit Documents or any transaction contemplated herein or therein is, and all
other such factual information (taken as a whole) hereafter furnished by or on
behalf of the Borrower in writing to the Agent or any Bank will be, true and
accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any material fact
necessary to make such information (taken as a whole) not misleading at such
time in light of the circumstances under which such information was provided.
There is no fact known to the Borrower which materially and adversely affects
the condition (financial or otherwise, determined pursuant to GAAP or SAP),
businesses, operations, assets, liabilities, properties or investments of the
Borrower and its Subsidiaries, taken as a whole, which has not
19
been disclosed herein or in such other documents, certificates and statements
furnished to the Banks for use in connection with the transactions contemplated
hereby.
5.10 FINANCIAL CONDITION; FINANCIAL STATEMENTS. (a) On and as
of the Restatement Effective Date and after giving effect to all Indebtedness
(including each Loan and Competitive Bid Loan) incurred, and to be incurred, and
Liens created and to be created, in connection therewith, (x) the sum of the
assets, at a fair valuation, of the Borrower will exceed its debts, (y) the
Borrower will not have incurred nor intended to, or believe that it will, incur
debts beyond its ability to pay such debts as such debts mature and (z) the
Borrower will have sufficient capital with which to conduct its business. For
purposes of this Section 5.10(a), "debt" means any liability on a claim, and
"claim" means (i) right to payment whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured; or (ii) right to
an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(b) The financial statements delivered to the Banks pursuant
to Section 4.01(i) and 5.10(d) present fairly the financial position of the
Persons specified therein, at the dates of said statements and the results of
operations for the periods covered thereby. All such financial statements have
been prepared in accordance with SAP or GAAP, as indicated in Sections 4.01(i)
and 5.10(d), consistently applied except to the extent provided in the notes to
said financial statements.
(c) Except as fully disclosed in the financial statements
delivered pursuant to Sections 4.01(i) and 5.10(d), there are no liabilities or
obligations with respect to the Borrower or any of its Subsidiaries of any
nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due) which, either individually or in aggregate, would be
material to the Borrower or to the Borrower and its Subsidiaries taken as a
whole. The Borrower does not know of any basis for the assertion against it of
any liability or obligation of any nature whatsoever that is not fully disclosed
in the financial statements delivered pursuant to Sections 4.01(i) and 5.10(d)
which, either individually or in the aggregate, could reasonably be expected to
be material to the Borrower or the Borrower and its Subsidiaries taken as a
whole.
(d) There has been no material adverse change in the condition
(financial or otherwise, determined pursuant to GAAP or SAP), businesses,
operations, properties, assets or liabilities of the Borrower or of the Borrower
and its Subsidiaries taken as a whole from that of the Borrower or of the
Borrower and its Subsidiaries taken as a whole as of December 31, 1998.
5.11 TAX RETURNS AND PAYMENTS. The Borrower and each of its
Subsidiaries has filed all federal income tax returns and all other tax returns,
domestic and foreign, required to be filed by it and has paid all material taxes
and assessments payable by it which have become due, other than those not yet
delinquent and except for those contested in good faith. The Borrower and each
of its Subsidiaries has paid, or has provided adequate reserves (in the good
faith judgment of the management of such Person) for the payment of, all
federal, state and foreign income taxes applicable for all prior fiscal years
and for the current fiscal year to the date hereof.
20
5.12 COMPLIANCE WITH ERISA. Each Plan is in substantial
compliance with ERISA and the Code; no Reportable Event has occurred with
respect to a Plan; no Plan is insolvent or in reorganization; the aggregate
amount of Unfunded Current Liabilities in respect of all Plans does not exceed
$1,000,000; no Plan has an accumulated or waived funding deficiency, has
permitted decreases in its funding standard account or has applied for an
extension of any amortization period within the meaning of Section 412 of the
Code; neither the Borrower nor any Subsidiary nor any ERISA Affiliate has
incurred any material liability to or on account of a Plan pursuant to Section
409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or
Section 4971 or 4975 of the Code or has been notified that it will incur any
material liability under any of the foregoing Sections with respect to any Plan;
no proceedings have been instituted by the PBGC to terminate any Plan; no
condition exists which presents a material risk to the Borrower or any
Subsidiary or any ERISA Affiliate of incurring a material liability to or on
account of a Plan pursuant to the foregoing provisions of ERISA and the Code; no
material lien imposed under the Code or ERISA on the assets of the Borrower or
any Subsidiary or any ERISA Affiliate exists nor has the Borrower, any
Subsidiary or any ERISA Affiliate been notified that such a lien will be imposed
on the assets of the Borrower, any Subsidiary or any ERISA Affiliate on account
of any Plan; and the Borrower and its Subsidiaries do not maintain or contribute
to any employee welfare benefit plan (as defined in Section 3(1) of ERISA)
(other than such an employee welfare benefit plan which is a "multiemployer
plan" within the meaning of Section 414(f) of the Code) which provides benefits
to retired employees (other than as required by Section 601 of ERISA) or any
employee pension benefit plan (as defined in Section 3(2) of ERISA) (other than
any such employee pension benefit plan which is intended to be qualified under
Section 401(a) of the Code), the obligations with respect to which employee
welfare benefit plans or employee pension benefit plans, individually or in the
aggregate, would have a material adverse effect upon the condition (financial or
otherwise, determined pursuant to GAAP or SAP), businesses, operations,
properties, assets, liabilities or investments of the Borrower and its
Subsidiaries taken as a whole. With respect to Plans that are multiemployer
plans (as defined in Section 3(37) of ERISA) the representations and warranties
in this Section 5.12, other than any made with respect to liability under
Section 4201 or 4204 of ERISA, are made to the best knowledge of the Borrower.
5.13 SUBSIDIARIES. (a) Annex III lists each Subsidiary of the
Borrower (and the direct and indirect ownership interest of the Borrower
therein) in each case existing on the Restatement Effective Date. As of the
Restatement Effective Date, all such Subsidiaries are Wholly-Owned Subsidiaries
of the Borrower.
(b) There are no restrictions on the Borrower or any of its
Insurance Subsidiaries which prohibit or otherwise restrict (x) the ability of
any Insurance Subsidiary to (a) pay dividends or make other distributions or pay
any Indebtedness owed to the Borrower or any Insurance Subsidiary, (b) make
loans or advances to the Borrower or any Insurance Subsidiary, (c) transfer any
of its properties or assets to the Borrower or any Insurance Subsidiary or (d)
guarantee the Obligations or (y) the ability of the Borrower or any Insurance
Subsidiary of the Borrower to create, incur, assume or suffer to exist any Lien
upon its property or assets to secure the Obligations, other than prohibitions
or restrictions existing under or by reason of (i) this Agreement or the other
Credit Documents, (ii) Legal Requirements, (iii) customary non-assignment
provisions entered into in the ordinary course of business and consistent with
past practices, (iv) purchase money obligations for property acquired in the
ordinary course of
21
business, so long as such obligations are permitted under this Agreement, (v)
any restriction or encumbrance with respect to an Insurance Subsidiary imposed
pursuant to an agreement which has been entered into for the sale or disposition
of all or substantially all of the capital stock or assets of such Insurance
Subsidiary, so long as such sale or disposition is permitted under this
Agreement, and (vi) Liens permitted under Section 7.03 and any documents or
instruments governing the terms of any Indebtedness or other obligations secured
by any such Liens, PROVIDED, that such prohibitions or restrictions apply only
to the assets subject to such Liens.
5.14 INTELLECTUAL PROPERTY. The Borrower and each of its
Subsidiaries have obtained or are in the process of applying for all material
patents, trademarks, servicemarks, trade names, copyrights, licenses and other
rights, free from burdensome restrictions, that are necessary for the operation
of their respective businesses as presently conducted and as proposed to be
conducted.
5.15 POLLUTION AND OTHER REGULATIONS. The Borrower and each of
its Subsidiaries are in compliance with all laws and regulations relating to
pollution and environmental control, equal employment opportunity and employee
safety in all domestic and foreign jurisdictions in which the Borrower and each
of its Subsidiaries is presently doing business, and the Borrower will comply
and cause each of its Subsidiaries to comply with all such laws and regulations
which may be imposed in the future in jurisdictions in which the Borrower or
such Subsidiary may then be doing business; in each case other than those the
non-compliance with which would not have a material adverse effect on the
condition (financial or otherwise, determined pursuant to GAAP or SAP),
businesses, operations, properties, assets, liabilities or investments of the
Borrower and its Subsidiaries taken as a whole or on the ability of the Borrower
to perform its obligations under any Credit Document.
5.16 PROPERTIES. The Borrower and each of its Subsidiaries has
good and marketable title to all properties owned by them, free and clear of all
Liens, other than as permitted by Section 7.03.
5.17 LABOR RELATIONS; COLLECTIVE BARGAINING AGREEMENTS. (a)
Set forth on Annex IV is a list and description (including dates of termination)
of all collective bargaining or similar agreements between or applicable to the
Borrower or any of its Subsidiaries and any union, labor organization or other
bargaining agent in respect of the employees of the Borrower and/or any
Subsidiary on the Restatement Effective Date.
(b) Neither the Borrower nor any of its Subsidiaries is
engaged in any unfair labor practice that is reasonably likely to have a
material adverse effect on the Borrower or on the Borrower and its Subsidiaries
taken as a whole. There is (i) no significant unfair labor practice complaint
pending against the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower, threatened against any of them, before the National
Labor Relations Board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is now
pending against the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower, threatened against any of them, (ii) no significant
strike, labor dispute, slowdown or stoppage is pending against the Borrower or
any of its Subsidiaries or, to the best knowledge of the Borrower, threatened
against the Borrower or any of its Subsidiaries
22
and (iii) to the best knowledge of the Borrower, no union representation
question exists with respect to the employees of the Borrower or any of its
Subsidiaries, except (with respect to any matter specified in clause (i), (ii)
or (iii) above, either individually or in the aggregate) such as is not
reasonably likely to have a material adverse effect on the condition (financial
or otherwise, determined pursuant to GAAP or SAP) businesses, operations,
properties, assets, liabilities or investments of the Borrower and its
Subsidiaries taken as a whole.
5.18 CAPITALIZATION. On the Restatement Effective Date, the
authorized capital stock of the Borrower consists of (i) 90,000,000 shares of
common stock, $1.00 par value, of which 70,076,109 were issued and outstanding
as of May 19, 1999 and (ii) 2,000,000 shares of preferred stock, $0.01 par
value, none of which are issued and outstanding. As of the Restatement Effective
Date, all such outstanding shares of the Borrower have been duly and validly
issued and are fully paid and nonassessable.
5.19 INDEBTEDNESS. Annex V sets forth a true and complete list
of all Indebtedness (including, without limitation, Contingent Obligations) of
the Borrower as of the Restatement Effective Date (other than Indebtedness
having an aggregate principal amount not to exceed $5,000,000), in each case
showing the aggregate principal amount thereof, the name of the lender in
respect thereof and the name of any other entity which has directly or
indirectly guaranteed such Indebtedness.
5.20 COMPLIANCE WITH STATUTES, ETC. The Borrower and each of
its Subsidiaries is in compliance in all material respects with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of their
businesses and the ownership of their properties (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls).
5.21 SPECIAL PURPOSE CORPORATION. The TOPrS Subsidiary was
formed for the purpose of, and shall conduct no business other than: (i) issuing
the TOPrS, (ii) loaning the proceeds of the TOPrS to the Borrower, (iii) making
distributions to the holders of the TOPrS solely from payments received from the
Borrower pursuant to the TOPrS Debt and (iv) any other actions necessary to
implement the foregoing.
5.22 YEAR 2000 Any reprogramming determined by the Borrower to
be necessary to permit the proper functioning, in and following the year 2000,
of (i) the Borrower's and its Subsidiaries' computer systems and (ii) equipment
containing embedded microchips (in each case, to the extent that the Borrower
intends to continue use or operation of such systems or equipment after December
31, 1999) and the testing of all such systems and equipment, as so reprogrammed,
has been completed as of the date of this Agreement, unless the failure to
complete such programming or testing would not reasonably be expected to cause a
Material Adverse Effect. The cost to the Borrower and its Subsidiaries of such
reprogramming and testing and of the reasonably foreseeable consequences of the
year 2000 to the Borrower and its Subsidiaries (including, without limitation,
reprogramming errors and, to the best of the Borrower's ability to assess it,
the failure of others' systems or equipment) is not reasonably expected to
result in an Event of Default or a Material Adverse Effect. Except for such of
the reprogramming referred to in the preceding sentence as may be necessary, the
computer and management information
23
systems of the Borrower and its Subsidiaries are and, with ordinary course
upgrading and maintenance, will continue (for the term of this Agreement) to be,
sufficient to permit the Borrower to conduct its business without Material
Adverse Effect.
SECTION 6 AFFIRMATIVE COVENANTS. The Borrower hereby covenants
and agrees that on the Restatement Effective Date and thereafter, for so long as
this Agreement is in effect and until such time as the Total Commitment has
terminated, no Notes are outstanding and the Loans and Competitive Bid Loans,
together with interest, Fees and all other Obligations incurred hereunder, are
paid in full:
6.01 INFORMATION COVENANTS. The Borrower will furnish to each
Bank (without exhibits, unless requested by such Bank):
(a) ANNUAL FINANCIAL STATEMENTS. (i) As soon as available and in any
event within 120 days after the close of each fiscal year of the Borrower,
(x) Borrower's annual report on Form 10-K, as filed with the SEC, together
with the opinion of the Borrower's independent certified public accountant
thereon which shall not be qualified as to the scope of the audit or as to
the status of the Borrower or any of its Subsidiaries as a going concern,
and (y) the balance sheet of the Borrower (on a stand alone basis) as at
the end of such fiscal year and the related statements of income and of
stockholders' equity for such fiscal year, in each case prepared in
accordance with GAAP.
(ii) As soon as available and in any event within 120 days after the
close of each fiscal year of the Borrower, the annual combined financial
statements of FIC and its Subsidiaries and the annual financial statements
of FIC and each Material Insurance Subsidiary on a stand alone basis (in
each case prepared in accordance with SAP) for such fiscal year, as filed
with the respective Applicable Insurance Regulatory Authority and setting
forth comparative figures for the preceding fiscal year, which shall be
certified by the Chief Financial Officer or other Authorized Officer of the
Borrower stating that such financial statements fairly present the combined
financial condition and results of operations of FIC and each respective
Subsidiary (including each Material Insurance Subsidiary) in accordance
with SAP.
(iii) As soon as available and in any event within 120 days after the
close of each fiscal year of the Borrower, the consolidated and
consolidating balance sheet of FGCC and its Subsidiaries as at the end of
such fiscal year and the related consolidated and consolidating statements
of income and of stockholders' equity for such year, setting forth
comparative figures for the preceding fiscal year, which shall be certified
by the Chief Financial Officer or other Authorized Officer of the Borrower
stating that, in the case of such consolidated financial statements, such
financial statements fairly present the consolidated financial condition
and results of operations of FGCC and its Subsidiaries in accordance with
GAAP.
(iv) At the request of any Bank, which request cannot be made prior to
the date which is 120 days after the close of any fiscal year of the
Borrower, a written favorable opinion, in form and substance satisfactory
to the Agent, by either the firm of independent
24
certified public accountants providing the opinion referred to in Section
6.01(a)(i) in respect of such fiscal year or an independent actuarial
consulting firm reasonably satisfactory to the Agent, which firm shall be
provided access to or copies of all reserve analyses and valuations
relating to the insurance business of each Insurance Subsidiary in the
possession of or available to the Borrower or its Subsidiaries stating that
the loss reserves of the Insurance Subsidiaries as of the last day of such
fiscal year (A) make a reasonable provision in the aggregate for all unpaid
losses and loss adjustment expenses, gross and net as to reinsurance ceded,
under the terms of the Insurance Subsidiaries' policies, (B) are computed
in a manner that conforms to the appropriate Standards of Practice of the
Actuarial Standards Board, (C) are computed on the basis of similar general
methods as used as of the last day of the preceding fiscal year and (D)
meet the relevant requirements of the insurance laws of the jurisdictions
where the Insurance Subsidiaries are domiciled.
(b) QUARTERLY FINANCIAL STATEMENTS. (i) As soon as available and in
any event within 60 days after the close of each of the first three
quarterly accounting periods in each fiscal year of the Borrower, (x) the
Borrower's quarterly report on Form 10-Q, as filed with the SEC, and (y)
the balance sheet of the Borrower (on a stand alone basis) as at the end of
such fiscal quarter and the related statements of income and of
stockholders' equity for such quarterly period and for the elapsed portion
of the fiscal year ended with the last day of such quarterly period; in
each case setting forth comparative figures for the related periods in the
prior fiscal year (prepared in accordance with GAAP), and all of which
shall be certified by the Chief Financial Officer or other Authorized
Officer of the Borrower, subject to changes resulting from normal year-end
audit adjustments.
(ii) As soon as available and in any event within 60 days after the
close of each of the first three quarterly accounting periods in each
fiscal year of the Borrower, quarterly financial statements of each
Material Insurance Subsidiary (prepared in accordance with SAP) for such
fiscal period, which shall be certified by the Chief Financial Officer or
other Authorized Officer of the Borrower stating that such financial
statements fairly present the financial condition and results of operations
of each such Material Insurance Subsidiary in accordance with SAP.
(iii) As soon as available and in any event within 60 days after the
close of each of the first three quarterly accounting periods in each
fiscal year of the Borrower, the consolidated balance sheet of FGCC and its
Subsidiaries as at the end of such quarterly period and the related
consolidated statements of income and of stockholders' equity for such
quarterly period and for the elapsed portion of the fiscal year ended with
the last day of such quarterly period; in each case setting forth
comparative figures for the related periods in the prior fiscal year
(prepared in accordance with GAAP), and all of which shall be certified by
the Chief Financial Officer or other Authorized Officer of the Borrower,
subject to changes resulting from normal year-end audit adjustments.
(c) OFFICER'S CERTIFICATES. At the time of the delivery of the
financial statements provided for in Sections 6.01(a) and (b), a
certificate of the Chief Financial Officer or other Authorized Officer of
the Borrower to the effect that no Default or Event
25
of Default exists or, if any Default or Event of Default does exist,
specifying the nature and extent thereof, which certificate shall set forth
the calculations required to establish whether the Borrower and its
Subsidiaries were in compliance with the provisions of Sections 6.11,
7.02(d), 7.05(a), (b), (c) and (e) and 7.10 through 7.15 as at the end of
such fiscal year or quarter, as the case may be.
(d) NOTICE OF DEFAULT OR LITIGATION. Promptly, and in any event within
three Business Days after a senior officer of the Borrower obtains
knowledge thereof, notice of (x) the occurrence of any event which
constitutes a Default or Event of Default, which notice shall specify the
nature thereof, the period of existence thereof and what action the
Borrower proposes to take with respect thereto and (y) any litigation or
governmental or regulatory proceeding pending against the Borrower or any
of its Subsidiaries which is likely to have a material adverse effect on
the condition (financial or otherwise, determined pursuant to GAAP or SAP),
businesses, operations, properties, assets, liabilities or investments of
the Borrower and its Subsidiaries taken as a whole or the ability of the
Borrower to perform its obligations hereunder or under any other Credit
Document.
(e) AUDITORS' REPORTS. At the request of any Bank, a copy of each
other report or "management letter" submitted to the Borrower or any of its
Subsidiaries by their independent accountants or independent actuaries in
connection with any annual, interim or special audit made by them of the
books of the Borrower or any of its Subsidiaries (it being understood and
agreed that if the Borrower receives any such report or "management letter"
that relates to the Borrower and its Subsidiaries on a consolidated basis,
the delivery of such report or letter will satisfy the provisions of this
clause (e)).
(f) LOSS RESERVE REPORT. As promptly as reasonably practicable
following a request therefor by the Agent or the Required Banks, a report
prepared by an independent accounting or actuarial consulting firm of
recognized professional standing selected by the Agent or the Required
Banks reviewing the adequacy of loss reserves of the Insurance Subsidiaries
(on an aggregate basis), which firm shall be provided access to or copies
of all reserve analyses and valuations relating to the insurance business
of each such Insurance Subsidiary in the possession of or available to the
Borrower or its Subsidiaries; PROVIDED that (x) no more than one request
may be made pursuant to this clause (f) during any 20-month period, and (y)
the cost of such review and report shall be for the account of the Banks
(PRO RATA according to their respective Commitments).
(g) OTHER REGULATORY STATEMENTS AND REPORTS. Promptly (A) after
receipt thereof, written notice of any assertion by any Applicable
Insurance Regulatory Authority or any governmental agency or agencies
substituted therefor, as to a violation of any Legal Requirement by any
Regulated Insurance Company which is likely to have a material adverse
effect on the condition (financial or otherwise, determined pursuant to
GAAP or SAP), businesses, operations, properties, assets, liabilities or
investments of the Borrower and its Subsidiaries taken as a whole or the
ability of the Borrower to perform its obligations hereunder or under any
other Credit Document, (B) and in any event within three Business Days
after receipt thereof, copies of any notice of actual suspension,
termination or revocation of any license of any Regulated Insurance Company
by any
26
Applicable Insurance Regulatory Authority (other than any termination
voluntarily effected by such Regulated Insurance Company), including any
request by an Applicable Insurance Regulatory Authority which commits a
Regulated Insurance Company to take or refrain from taking any action or
which otherwise affects the authority of such Regulated Insurance Company
to conduct its business, and (C) and in any event within three Business
Days after the Borrower or any of its Subsidiaries obtains knowledge
thereof, notice of any actual changes in the insurance laws enacted in any
state in which any Regulated Insurance Company is domiciled which, in the
case of the foregoing clause (B) or (C), could (in the reasonable judgment
of the Borrower) have a material adverse effect on the condition (financial
or otherwise, determined pursuant to GAAP or SAP), businesses, operations,
properties, assets, liabilities or investments of the Borrower and its
Subsidiaries taken as a whole or on the ability of the Borrower to perform
its obligations under any Credit Document.
(h) CREDIT RATING CHANGES. Promptly, and in any event within three
Business Days after a senior officer of the Borrower obtains knowledge
thereof, notice of any change in the credit rating assigned by Xxxxx'x or
S&P to any long-term debt of the Borrower (including without limitation any
change in the Xxxxx'x Credit Rating or the S&P Credit Rating).
(i) OTHER INFORMATION. Promptly upon transmission thereof, copies of
any filings and registrations with, and reports to, the SEC by the Borrower
or any of its Subsidiaries (other than any registration statement on Form
S-8) and copies of all financial statements, proxy statements, notices and
reports as the Borrower or any of its Subsidiaries shall send to the
holders (other than the Borrower and its Subsidiaries) of their capital
stock in their capacity as such holders (in each case to the extent not
theretofore delivered to the Banks pursuant to this Agreement) and, with
reasonable promptness, such other information or documents (financial or
otherwise) as the Agent or any Bank may reasonably request from time to
time.
6.02 BOOKS, RECORDS AND INSPECTIONS. The Borrower will, and will cause each
of its Subsidiaries to, keep proper books of record and account in which full,
true and correct entries in conformity in all material respects with GAAP or
SAP, as the case may be, and all requirements of law shall be made of all
dealings and transactions in relation to its business and activities. The
Borrower will, and will cause each of its Subsidiaries to, permit officers and
designated representatives of the Agent or any Bank to visit and inspect, during
regular business hours and under guidance of officers of the Borrower or such
Subsidiary, any of the properties or assets of the Borrower and any of its
Subsidiaries in whomsoever's possession (but only to the extent the Borrower or
such Subsidiary has the right to do so to the extent in the possession of
another Person), and to examine the books of account of the Borrower and any of
its Subsidiaries and discuss the affairs, finances and accounts of the Borrower
and of any of its Subsidiaries with, and be advised as to the same by, its and
their officers and independent accountants and independent actuaries, if any,
all at such reasonable times and intervals and to such reasonable extent as the
Agent or such Bank may request; PROVIDED, that so long as no Event of Default
has occurred and is continuing, such inspections shall not be made more
frequently than semiannually.
27
6.03 INSURANCE. The Borrower will, and will cause each of its Subsidiaries
to, at all times maintain in full force and effect insurance in such amounts,
covering such risks and liabilities and with such deductibles or self-insured
retentions as are in accordance with normal industry practice.
6.04 PAYMENT OF TAXES. The Borrower will pay and discharge, and will cause
each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims (other than claims relating to the adjustment or
settling, in the ordinary course of business, of claims in respect of insurance
policies or reinsurance contracts) which, if unpaid, might become a Lien or
charge upon any properties of the Borrower or any of its Subsidiaries; PROVIDED
that neither the Borrower nor any Subsidiary shall be required to pay any such
tax, assessment, charge, levy or claim which is being contested in good faith
and by proper proceedings if it has maintained adequate reserves with respect
thereto in accordance with GAAP or SAP, as the case may be.
6.05 CORPORATE FRANCHISES. The Borrower will do, and will cause each
Subsidiary to do, or cause to be done, all things necessary to preserve and keep
in full force and effect its corporate existence, rights and authority, PROVIDED
that any transaction permitted by Section 7.02 will not constitute a breach of
this Section 6.05.
6.06 COMPLIANCE WITH STATUTES, ETC. The Borrower will, and will cause each
Subsidiary to, comply in all material respects with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls).
6.07 ERISA. As soon as possible and, in any event, within 10 days after the
Borrower or any Subsidiary knows or has reason to know any of the following (and
with regard to Plans with respect to which an ERISA Affiliate contributes
pursuant to collective bargaining requirements or maintains, the Borrower shall
use its best efforts to obtain information therefrom regarding any of the
following), the Borrower will deliver to each of the Banks a certificate of the
Chief Financial Officer or other Authorized Officer of the Borrower setting
forth details as to such occurrence and such action, if any, which the Borrower,
such Subsidiary or such ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given to or filed with or
by the Borrower, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan
participant (other than notices relating to an individual participant's
benefits) or the plan administrator with respect thereto: that a Reportable
Event has occurred, that an accumulated funding deficiency has been incurred or
an application has been or could reasonably be expected to be made to the
Secretary of the Treasury for a waiver or modification of the minimum funding
standard (including any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a Plan, that a
Plan which has an Unfunded Current Liability has been or could reasonably be
expected to be terminated, reorganized, partitioned or declared insolvent under
Title IV of ERISA, that a Plan has an Unfunded Current Liability giving rise to
a lien under ERISA or the Code, that proceedings have been or could reasonably
be expected to be instituted to terminate a Plan which has an Unfunded Current
Liability, that a
28
proceeding has been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Plan, or that the Borrower, any Subsidiary or any
ERISA Affiliate will or could reasonably be expected to incur any liability
(including any contingent or secondary liability) to or on account of the
termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4201 or
4204 of ERISA. Upon request of a Bank, the Borrower will deliver to such Bank a
complete copy of the annual report (Form 5500) of each Plan required to be filed
with the Internal Revenue Service. In addition to any certificates or notices
delivered to the Banks pursuant to the first sentence hereof, copies of any
notices received by the Borrower or any Subsidiary required to be delivered to
the Banks hereunder shall be delivered to the Banks no later than 10 days after
the later of the date such notice has been filed with the Internal Revenue
Service or the PBGC, given to Plan participants (other than notices relating to
an individual participant's benefits) or received by the Borrower or such
Subsidiary.
6.08 PERFORMANCE OF OBLIGATIONS. The Borrower will, and will
cause each of its Subsidiaries to, perform all of its obligations under the
terms of each mortgage, deed of trust, indenture, loan agreement, security
agreement, other debt instrument and each other material agreement, contract or
instrument by which it is bound or to which it is a party, except such
non-performance as could not individually or in the aggregate, reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise, determined in accordance with GAAP or SAP), businesses, operations,
properties, assets, liabilities or investments of the Borrower and its
Subsidiaries taken as a whole.
6.09 GOOD REPAIR. The Borrower will, and will cause each of its
Subsidiaries to, to the extent and in the manner customary for companies in
similar businesses, ensure that its material properties and equipment used or
useful in its business in whomsoever's possession they may be, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements thereto.
6.10 END OF FISCAL YEARS; FISCAL QUARTERS. The Borrower will, for financial
reporting purposes, cause (i) each of its, and each of its material
Subsidiaries' fiscal years to end on December 31 of each year and (ii) each of
its, and each of its material Subsidiaries', fiscal quarters to end on March 31,
June 30, September 30 and December 31 of each year.
6.11 NAIC TESTS. The Borrower shall cause FIC and its Subsidiaries to
maintain risk-based capital ratios that are above the minimum levels required by
the NAIC Tests below which FIC or such Subsidiary may be required to take action
of any kind as a result of such ratios (including communication with regulatory
authorities required as a result of the failure to maintain such minimum ratio
levels, etc.).
SECTION 7. NEGATIVE COVENANTS. The Borrower hereby covenants and agrees
that on the Restatement Effective Date and thereafter, for so long as this
Agreement is in effect and until such time as the Total Commitment has
terminated, no Notes are outstanding and the Loans and Competitive Bid Loans,
together with interest, Fees and all other Obligations incurred hereunder, are
paid in full:
29
7.01 CHANGES IN BUSINESS. The Borrower will not, and will not
permit any of its Subsidiaries to, make equity investments to acquire ownership
or control of businesses in an aggregate amount exceeding $50,000,000 at any
time outstanding, other than property and casualty insurance and financial
services businesses (and businesses incidental or reasonably related thereto).
Notwithstanding the preceding sentence, no Insurance Subsidiary shall engage in
any business other than the ownership and management of property and casualty
insurance operations, workers compensation insurance operations and businesses
reasonably related or incidental thereto; no Financial Services Non-Thrift
Subsidiary shall engage in any business other than the ownership and management
of financial services operations and businesses reasonably related or incidental
thereto; and no Thrift Subsidiary shall engage in any business other than the
ownership and management of thrift operations and businesses reasonably related
or incidental thereto.
7.02 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.
The Borrower will not, and will not permit any Subsidiary to, wind up, liquidate
or dissolve its affairs, or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (in one
transaction or a series of related transactions) all or any substantial part of
its property or assets, (but excluding any sale or disposition of property or
assets in the ordinary course of business), or purchase, lease or otherwise
acquire (in one transaction or a series of related transactions) all or any part
of the property or assets of any Person (excluding any purchases, leases or
other acquisitions of property or assets in, and for use in, the ordinary course
of business, other than Capital Expenditures, except to the extent permitted by
clause (d) below, and Investments, except to the extent permitted by clause (e)
below) or agree to do any of the foregoing at any future time, except that the
following shall be permitted:
(a) So long as no Default or Event of Default exists or would exist
immediately after giving effect thereto, the merger or consolidation of any
Wholly-Owned Subsidiary of the Borrower with or into another Wholly-Owned
Subsidiary of the Borrower, PROVIDED that no Insurance Subsidiary may merge
or consolidate with any Financial Services Subsidiary;
(b) Any Subsidiary (other than FCIG) not engaged to any significant
extent in any business other than acting as a holding company for other
Subsidiaries of the Borrower may be liquidated, wound up, dissolved, or
merged with its direct parent (if other than the Borrower) or direct
Subsidiary;
(c) The Borrower and its Subsidiaries may acquire new businesses or
operations (including without limitation by acquiring new Subsidiaries)
(each, a "Permitted Acquisition"), PROVIDED that (i) no Default or Event of
Default exists or would exist immediately after giving effect thereto, (ii)
the value of the assets of such acquired entity shall not exceed 40% of the
value of the assets of the Borrower and its Subsidiaries on a consolidated
basis as of the last day of the most recently ended fiscal quarter as
determined on the date on which any one or more of the Borrower or its
Subsidiaries enters into a binding agreement to effect such Permitted
Acquisition and (iii) to the extent that the consideration paid by the
Borrower in respect of any such acquisition is other than all capital stock
of the Borrower (including without limitation cash and/or assumption of
30
Indebtedness), the aggregate amount of such consideration paid by the
Borrower and its Subsidiaries in respect thereof, shall not exceed 40% of
the Consolidated Net Worth of the Borrower as of the last day of the most
recently recorded fiscal quarter as determined on the date on which any one
or more of the Borrower and its Subsidiaries enters into a binding
agreement to effect such Permitted Acquisition;
(d) The Borrower and its Subsidiaries may make Capital Expenditures so
long as the aggregate amount thereof made in any fiscal year does not
exceed $40,000,000, provided that if Capital Expenditures made by the
Borrower and its Subsidiaries in any fiscal year are less than $40,000,000,
then in the immediately succeeding fiscal year the Borrower and its
Subsidiaries may make Capital Expenditures in an amount up to the sum of
(i) $40,000,000 plus (ii) the lesser of (x) the unutilized amount from the
immediately preceding fiscal year and (y) $7,500,000;
(e) The Borrower and its Subsidiaries may acquire and dispose of
Investments so long as the Borrower is in compliance with Section 7.05
before and after giving effect thereto;
(f) The Securitization Subsidiaries may (i) convey and transfer, or,
as the case may be, purchase and acquire, the interests contemplated by the
securitization transactions to which they respectively are or may after the
date hereof become parties and (ii) purchase or sell participating
interests, whether evidenced by certificates, debt instruments, or
otherwise, in the securitization transactions to which they respectively
are or may after the date hereof become parties;
(g) FIL and its Subsidiaries may (i) convey and transfer, or, as the
case may be, purchase and acquire, the interests contemplated by the
securitization transactions to which they respectively are or may after the
date hereof become parties and (ii) purchase or sell participating
interests, whether evidenced by certificates, debt instruments, or
otherwise, in the securitization transactions to which they respectively
are or may after the date hereof become parties; and
(h) Any Subsidiary of FIL or any Subsidiary of a Securitization
Subsidiary may be liquidated, wound up or dissolved following the
termination of the securitization transactions to which they are
respectively parties.
7.03 LIENS. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any property or assets of any kind (real or personal,
tangible or intangible (including, without limitation, the capital stock of
any of the Borrower's Subsidiaries)) of the Borrower or any such Subsidiary
whether now owned or hereafter acquired, or sell any such property or
assets subject to an understanding or agreement, contingent or otherwise,
to repurchase such property or assets (including sales of accounts
receivable or notes with recourse to the Borrower or any of its
Subsidiaries) or assign any right to receive income, or file or permit the
filing of any financing statement under the UCC or any other similar notice
of Lien under any similar recording or notice statute, except:
31
(a) Liens for taxes not yet due or Liens for taxes being contested in
good faith and by appropriate proceedings for which adequate reserves have
been established in accordance with GAAP or SAP, as the case may be;
(b) Liens in respect of property or assets of any of the Borrower's
Subsidiaries imposed by law which were incurred in the ordinary course of
business, such as carriers', warehousemen's and mechanics' Liens and other
similar Liens arising in the ordinary course of business, and (x) which do
not in the aggregate materially detract from the value of such property or
assets or materially impair the use thereof in the operation of the
business of the Borrower or any Subsidiary or (y) which are being contested
in good faith by appropriate proceedings, which proceedings have the effect
of preventing the forfeiture or sale of the property or asset subject to
such Lien;
(c) Liens created pursuant to Section 3.02(c) of this Agreement;
(d) Liens in existence on the Restatement Effective Date which are
listed, and the property subject thereto on the Restatement Effective Date
described, in Annex VI, without giving effect to any extensions or renewals
thereof (except for extensions or renewals related to extensions, renewals
or refinancings of Indebtedness permitted under Section 7.04(c));
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 8.07;
(f) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security, or
to secure the performance of tenders, statutory obligations, surety and
appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations incurred in the
ordinary course of business (exclusive of obligations in respect of the
payment for borrowed money);
(g) Leases or subleases granted to others not interfering in any
material respect with the business of the Borrower or any of its
Subsidiaries and any interest or title of a lessor under any lease not in
violation of this Agreement;
(h) Easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(i) Liens arising from UCC financing statements regarding leases or
other precautionary UCC filings in respect of transactions not giving rise
to Indebtedness, and in each case not in violation of this Agreement;
(j) Liens incurred in the ordinary course of business by the Borrower
or any Regulated Insurance Company on securities to secure repurchase and
reverse repurchase obligations in respect of such securities;
32
(k) Liens constituting pledges or deposits of cash or securities made
by any Regulated Insurance Company as a condition to obtaining or
maintaining any licenses issued to it by any Applicable Insurance
Regulatory Authority;
(l) Liens arising pursuant to purchase money mortgages securing
Indebtedness representing the purchase price (or financing of the purchase
price within 90 days after the respective purchase) of assets acquired
after the Restatement Effective Date, PROVIDED that (i) any such Liens
attach only to the assets so purchased, attachments thereto and proceeds
thereof, (ii) the principal amount of the Indebtedness secured by any such
Lien does not exceed 100%, nor is less than 70%, of the lesser of the fair
market value or the purchase price of the property being purchased at the
time of the incurrence of such Indebtedness and (iii) the aggregate
outstanding principal amount of Indebtedness secured by Liens permitted by
this clause (l) shall not exceed 5.0% of Consolidated Net Worth at any
time;
(m) Liens on property or assets acquired pursuant to Section 7.02(c)
after the Restatement Effective Date, or on property or assets of a
Subsidiary of the Borrower in existence at the time such Subsidiary is
acquired pursuant to Section 7.02(c), PROVIDED that (i) any Indebtedness
that is secured by such Liens is otherwise permitted to be incurred under
Section 7.04, and (ii) such Liens are not incurred in contemplation of such
acquisition and do not attach to any other asset of the Borrower or any of
its Subsidiaries;
(n) Liens which constitute rights of set-off of a customary nature or
bankers' liens on amounts on deposit, whether arising by contract or by
operation of law, in connection with arrangements entered into with
depository institutions in the ordinary course of business;
(o) Liens encumbering customary initial deposits and margin deposits,
and similar Liens attaching to commodity trading accounts or other
brokerage accounts and the funds or investments on deposit therein,
incurred in the ordinary course of business, securing Indebtedness under
Interest Rate Protection Agreements or Other Hedging Agreements or in
respect of repurchase obligations permitted by Section 7.04(f);
(p) Liens constituting extensions, renewals or replacements of any
Lien referred to in clause (l) or (m) above, PROVIDED that the principal
amount of the Indebtedness secured thereby is not increased and that any
such extension, renewal or replacement Lien attaches only to the property
originally encumbered thereby;
(q) Liens on assets of the Thrift Subsidiaries securing Indebtedness
owing by such Thrift Subsidiaries to the Federal Home Loan Bank or other
similar government sponsored entities;
(r) Liens on assets of the Securitization Subsidiaries;
(s) Liens on assets of FIL and its Subsidiaries created pursuant to
securitization transactions permitted under Section 7.02(g);
33
(t) Liens in favor of the trustee for the holders of the TOPrS to
secure its fees and expenses;
(u) Liens on unallocated capital stock of the Borrower securing any
ESOP Loan;
(v) FIC and other Insurance Subsidiaries may enter into reinsurance
transactions in the ordinary course of business; and
(w) Liens on loan receivables and collateral therefor to secure
Indebtedness permitted under Section 7.04(p).
7.04 INDEBTEDNESS. The Borrower will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(b) Permitted Subordinated Debt;
(c) Indebtedness (including, without limitation, Contingent
Obligations) in existence on the Restatement Effective Date which is listed
on Annex V and any subsequent extension, renewal or refinancing thereof, so
long as the principal amount of such Indebtedness is not increased as a
result of such extension, renewal or refinancing;
(d) Indebtedness of the Borrower incurred after the Restatement
Effective Date constituting guaranties of Indebtedness of the Financial
Services Non-Thrift Subsidiaries;
(e) Permitted Acquisition Debt of any Insurance Subsidiary;
(f) Repurchase or reverse repurchase obligations of the Borrower or
any Insurance Subsidiary incurred in the ordinary course of business for
short term liquidity management purposes;
(g) Additional Indebtedness of Insurance Subsidiaries consisting of
reimbursement obligations in respect of letters of credit, or other
Contingent Obligations, so long as the aggregate outstanding principal
amount of Indebtedness incurred under this clause (g) does not exceed
$20,000,000 at any time;
(h) Indebtedness of Insurance Subsidiaries that is not otherwise
permitted under this Section 7.04 not to exceed 5% of FIC Combined Surplus
at any time;
(i) Indebtedness of (x) the Financial Services Non-Thrift
Subsidiaries, PROVIDED, that the proceeds of such Indebtedness (other than
the proceeds of securitization transactions entered into by Securitization
Subsidiaries) are used to fund the operations of, and acquisitions by, such
Financial Services Non-Thrift Subsidiaries and no part of such
34
proceeds are advanced, loaned or distributed to the Borrower or any of its
other Subsidiaries (other than other Financial Services Non-Thrift
Subsidiaries), and (y) the Thrift Subsidiaries, PROVIDED, that the proceeds
of such Indebtedness are used to fund the operations of, and acquisitions
by, such Thrift Subsidiaries and no part of such proceeds are advanced,
loaned or distributed to the Borrower or any of its other Subsidiaries
(other than other Thrift Subsidiaries);
(j) Indebtedness owing to brokers in respect of accounts maintained
with such brokers, including margin deposits, incurred in the ordinary
course of business;
(k) Indebtedness consisting of Interest Rate Protection Agreements or
Other Hedging Agreements entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business, so long as such Agreements
are entered into in respect of the assets or obligations of the Borrower or
such Subsidiary for bona fide hedging purposes and not for purposes of
speculation;
(l) (i) Indebtedness of the Borrower owing to any Subsidiary, (ii)
Indebtedness of any Subsidiary owing to the Borrower, (iii) Indebtedness of
any Insurance Subsidiary owing to any other Insurance Subsidiary, (iv)
Indebtedness of any Financial Services Non-Thrift Subsidiary owing to any
other Financial Services Non-Thrift Subsidiaries, (v) Indebtedness of any
Thrift Subsidiary owing to any other Thrift Subsidiary, (vi) Indebtedness
of FGCC to any other Financial Services Subsidiary and (vii) Indebtedness
of any Financial Services Subsidiary to FGCC;
(m) any guaranty by an Insurance Subsidiary of the obligations of
another Insurance Subsidiary, or by a Financial Services Non-Thrift
Subsidiary of the obligations of another Financial Services Non-Thrift
Subsidiary, or by a Thrift Subsidiary of the obligations of another Thrift
Subsidiary, or by FGCC of the obligations of another Financial Services
Subsidiary;
(n) purchase money debt not exceeding 5% of Consolidated Net Worth at
any time;
(o) any guaranty by the Borrower of any ESOP Loan;
(p) Indebtedness of any Financial Services Subsidiary under
warehousing lines of credit (or similar credit facilities) established as
part of a loan securitization program; and
(q) additional unsecured Indebtedness of the Borrower, so long as (i)
at the time of the incurrence of any such Indebtedness no Default or Event
of Default exists or would result from the incurrence thereof, (ii) at the
time of the incurrence of any such Indebtedness, the Borrower will be in
compliance with Sections 7.12 and 7.14 determined on a PRO FORMA basis as
if such Indebtedness were outstanding and (iii) no such Indebtedness shall
mature, or be subject to any mandatory prepayment, redemption, put or
similar requirement prior to the Final Maturity Date.
35
7.05 INVESTMENTS. (a) The Borrower will not permit any Insurance Subsidiary
to purchase or otherwise acquire any Non-Investment Grade Security if at such
time, or immediately after giving effect thereto, the fair market value
(determined on a consolidated basis) of all Investments of the Insurance
Subsidiaries (other than Investments in the Insurance Subsidiaries) in
Non-Investment Grade Securities would exceed 10% of the fair market value
(determined on a consolidated basis) of all Investments of the Insurance
Subsidiaries (other than Investments in Insurance Subsidiaries).
(b) The Borrower will not permit the fair market value (determined on a
consolidated basis) of all real property (including real property leasehold
interests) and mortgage loans (excluding mortgage-backed securities) held by the
Insurance Subsidiaries to exceed 5% of the fair market value (determined on a
consolidated basis) of all Investments of the Insurance Subsidiaries (other than
Investments in Insurance Subsidiaries).
(c) The Borrower will not permit the fair market value of all real property
(including real property leasehold interests) and mortgage loans (excluding
mortgage-backed securities) held by the Borrower to exceed 5% of Consolidated
Net Worth at any time.
(d) The Borrower will not, and will not permit FIC and its Subsidiaries to,
materially alter their respective investment strategies from those in effect on
the Restatement Effective Date, unless pursuant to Legal Requirements.
(e) The Borrower will not permit any Insurance Subsidiary to make or permit
to remain outstanding any Investment in the Borrower or any of its Subsidiaries
or Affiliates (other than another Insurance Subsidiary) if the aggregate book
value of all such Investments shall at any time exceed 25% of FIC Combined
Surplus at such time.
7.06 PREPAYMENTS AND MODIFICATIONS OF PERMITTED SUBORDINATED DEBT. The
Borrower will not, and will not permit any of its Subsidiaries to:
(a) make (or give any notice in respect thereof) any voluntary or
optional payment or prepayment or redemption or repurchase (including by
virtue of the exercise of any put right) or acquisition for value of
(including, without limitation, by way of depositing with the trustee with
respect thereto money or securities before due for the purpose of paying
when due), or exchange of, after its issuance, any Permitted Subordinated
Debt; or
(b) amend or modify (or permit the amendment or modification of) any
of the terms or provisions of, after its issuance, any Permitted
Subordinated Debt, except for amendments or modifications the sole effect
of which is to reduce the interest rate, extend the maturity, waive
covenant compliance or reduce covenant requirements.
7.07 RESTRICTIONS ON SUBSIDIARY PAYMENTS. The Borrower will not, and will
not permit any of its Insurance Subsidiaries to, create or otherwise cause or
suffer to exist any encumbrance or restriction which prohibits or otherwise
restricts (x) the ability of any Insurance Subsidiary to (a) pay dividends or
make other distributions or pay any Indebtedness owed to the
36
Borrower or any Insurance Subsidiary, (b) make loans or advances to the Borrower
or any Insurance Subsidiary, (c) transfer any of its properties or assets to the
Borrower or any Insurance Subsidiary or (d) guarantee the Obligations or (y) the
ability of the Borrower or any Insurance Subsidiary of the Borrower to create,
incur, assume or suffer to exist any Lien upon its property or assets to secure
the Obligations, other than prohibitions or restrictions existing under or by
reason of (i) this Agreement or the other Credit Documents, (ii) Legal
Requirements, (iii) customary non-assignment provisions entered into in the
ordinary course of business and consistent with past practices, (iv) purchase
money obligations for property acquired in the ordinary course of business, so
long as such obligations are permitted under this Agreement, (v) any restriction
or encumbrance with respect to an Insurance Subsidiary of the Borrower imposed
pursuant to an agreement which has been entered into for the sale or disposition
of all or substantially all of the capital stock or assets of such Insurance
Subsidiary, so long as such sale or disposition is permitted under this
Agreement, and (vi) Liens permitted under Section 7.03 and any documents or
instruments governing the terms of any Indebtedness or other obligations secured
by any such Liens, PROVIDED, that such prohibitions or restrictions apply only
to the assets subject to such Liens.
7.08 TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction or series of transactions
with any Affiliate (other than the Borrower or a Subsidiary of the Borrower),
other than on terms and conditions substantially as favorable to the Borrower or
such Subsidiary as would be obtainable by the Borrower or such Subsidiary at the
time in a comparable arm's-length transaction with a Person other than an
Affiliate. In addition, in transactions in which the Borrower purchases or
participates in loans made by a Financial Services Subsidiary, the Borrower and
such Financial Services Subsidiary will not use selection criteria for
determining the particular loans that will be purchased or participated in by
the Borrower that are adverse to the Borrower.
7.09 ISSUANCE OF STOCK. The Borrower will not issue any shares of preferred
stock, preference stock or redeemable common stock, other than Qualified
Preferred Stock and Non-Qualified Preferred Stock. The Borrower shall not permit
any of its Insurance Subsidiaries to issue any shares of common stock, preferred
stock, preference stock or redeemable common stock or any options or warrants to
purchase, or securities convertible into, any such stock, except for common
stock issued to the Borrower or Wholly-Owned Subsidiaries of the Borrower.
7.10 LIABILITIES TO POLICYHOLDER SURPLUS RATIO. The Borrower shall not
permit the Liabilities to Policyholder Surplus Ratio of all Subsidiaries of FCIG
which are Regulated Insurance Companies (determined on a combined basis) at any
time to exceed 6.0 to 1.0.
7.11 NET PREMIUMS WRITTEN RATIO. The Borrower will not permit the ratio of
(i) Net Premiums Written of all Subsidiaries of FCIG which are Regulated
Insurance Companies (determined on a combined basis) for any fiscal year to (ii)
Policyholder Surplus of all Subsidiaries of FCIG which are Regulated Insurance
Companies (determined on a combined basis) on the last day of such fiscal year
to exceed 3.0:1.0.
7.12 LEVERAGE RATIO. The Borrower will not permit the ratio of (i) Total
Indebtedness to (ii) Total Capitalization at any time to exceed 0.45 to 1.0.
37
7.13 MINIMUM CONSOLIDATED NET WORTH. The Borrower will not permit
Consolidated Net Worth at any time to be less than $675,000,000.
7.14 INTEREST COVERAGE RATIO. The Borrower will not permit the ratio of (i)
Consolidated EBIT to (ii) Consolidated Interest Expense for any period of four
consecutive fiscal quarters of the Borrower (taken as one accounting period) to
be less than 3.0 to 1.0.
7.15 FIC COMBINED SURPLUS. The Borrower will not permit FIC Combined
Surplus at any time to be less than $450,000,000.
7.16 INSURED DEPOSITORY SUBSIDIARIES. (a) The Borrower will not permit any
Insured Depository Subsidiary to be or become "undercapitalized", "significantly
undercapitalized" or "critically undercapitalized" for purposes of 12 U.S.C. ss.
1831o, as amended, restated or redesignated from time to time.
(b) The Borrower shall not, nor shall it permit any Subsidiary (including,
without limitation, any Insured Depository Subsidiary) to, submit a "capital
restoration plan" or enter into a "capital management agreement" under 12 U.S.C.
ss. 1831o(b)(2)(C), as amended, restated or redesignated from time to time, with
respect to any Insured Depository Subsidiary.
SECTION 8 EVENTS OF DEFAULT. Upon the occurrence of any of the following
specified events (each an "Event of Default"):
8.01 PAYMENTS. The Borrower shall (i) default in the payment when due of
any principal of the Loans or Competitive Bid Loans or (ii) default, and such
default shall continue for two or more days, in the payment when due of any
interest on the Loans or Competitive Bid Loans or any Fees or any other amounts
owing hereunder or under any other Credit Document; or
8.02 REPRESENTATIONS, ETC. Any representation, warranty or statement made
or deemed made by the Borrower or any of its Subsidiaries herein or in any other
Credit Document or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove to have been untrue in any
material respect on the date as of which made or deemed made; or
8.03 COVENANTS. The Borrower shall (a) default in the due performance or
observance by it of any term, covenant or agreement contained in Section 6.10,
6.11 or 7, or (b) default in the due performance or observance by it of any
term, covenant or agreement (other than those referred to in Sections 8.01, 8.02
or clause (a) of this Section 8.03) contained in this Agreement and such default
shall continue unremedied for a period of at least 30 consecutive days; or
8.04 DEFAULT UNDER OTHER AGREEMENTS. (a) The Borrower or any of its
Subsidiaries shall (i) default in any payment with respect to Indebtedness
(other than the Loans and Competitive Bid Loans) in excess of $20,000,000 (or
its equivalent in any other currency) individually or in the aggregate, for the
Borrower and its Subsidiaries, beyond the period of grace, if any, provided in
the instrument or agreement under which such Indebtedness was created or (ii)
38
default in the observance or performance of any agreement or condition relating
to any such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause (determined without regard to whether
any notice or lapse of time is required), any such Indebtedness to become due
prior to its stated maturity; or (b) any such Indebtedness of the Borrower or
any of its Subsidiaries shall be declared to be due and payable, or required to
be prepaid other than by a regularly scheduled required prepayment, prior to the
stated maturity thereof; or
8.05 BANKRUPTCY, ETC. The Borrower or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect and applicable, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against the Borrower or any of its Subsidiaries and, with respect to any such
case commenced under the Bankruptcy Code, the petition is not controverted
within 10 days, or is not dismissed within 60 consecutive days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Borrower or any of its Subsidiaries; or the Borrower or any of its
Subsidiaries commences (including by way of applying for or consenting to the
appointment of, or the taking of possession by, a rehabilitator, receiver,
custodian, trustee, conservator or liquidator (collectively, a "conservator") of
itself or all or any substantial portion of its property, whether or not
confidential) any other proceeding under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency, liquidation,
rehabilitation, conservatorship or similar law of any jurisdiction whether now
or hereafter in effect relating to the Borrower or any of its Subsidiaries; or
any such proceeding is commenced against (a) any Regulated Insurance Company
which is engaged in the business of underwriting insurance and/or reinsurance in
the United States, whether or not such proceeding is consented to by such
Person, or (b) the Borrower or any of its Subsidiaries (other than any Regulated
Insurance Company described in the immediately preceding clause (a)), whether or
not such proceeding is consented to by such Person but only to the extent that
such proceeding remains undismissed for a period of 60 consecutive days; or the
Borrower or any of its Subsidiaries is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is entered;
or (a) any Regulated Insurance Company which is engaged in the business of
underwriting insurance and/or reinsurance in the United States suffers any
appointment of any conservator or the like for it or any substantial part of its
property, or (b) the Borrower or any of its Subsidiaries (other than any
Regulated Insurance Company described in the immediately preceding clause (a))
suffers any appointment of any conservator or the like for it or substantially
all of its property which continues undischarged or unstayed for a period of 60
consecutive days; or the Borrower or any of its Subsidiaries makes a general
assignment for the benefit of creditors; or any formal corporate action is taken
by the Borrower or any of its Subsidiaries for the purpose of effecting any of
the foregoing; or
8.06 ERISA. (a) Any Plan shall fail to maintain the minimum funding
standard required by Section 412 of the Code for any plan year or part thereof
or a waiver of such standard or extension of any amortization period is sought
or granted under Section 412 of the Code or shall provide security to induce the
issuance of such waiver or extension, (b) any Plan is or shall
39
have been terminated or the subject of termination proceedings under ERISA or an
event has occurred entitling the PBGC to terminate a Plan under Section 4042(a)
of ERISA, (c) any Plan shall have an Unfunded Current Liability or (d) the
Borrower or a Subsidiary or any ERISA Affiliate has incurred or is likely to
incur a material liability to or on account of a termination of or a withdrawal
from a Plan under Section 515, 4062, 4063, 4064, 4201 or 4204 of ERISA; and
there shall result from any such event or events described in the preceding
clauses of this Section 8.06 the imposition of a lien upon the assets of the
Borrower or any Subsidiary or any ERISA Affiliate, the granting of a security
interest, or a liability or a material risk of incurring a liability to the PBGC
or a Plan or a trustee appointed under ERISA or a penalty under Section 4971 or
4975 of the Code or Section 409, 502(i) or 502(l) of ERISA, any of which,
individually or in the aggregate, would have a material adverse effect upon the
condition (financial or otherwise, determined pursuant to GAAP or SAP),
businesses, operations, properties, assets, liabilities, investments or
prospects of the Borrower and its Subsidiaries taken as a whole; or
8.07 JUDGMENTS. One or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving a liability of $20,000,000 or
more in the aggregate for all such judgments and decrees for the Borrower and
its Subsidiaries and any such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 30 days from the entry
thereof; or
8.08 OWNERSHIP. There shall occur a Change of Control;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent shall, upon the written request of the
Required Banks, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent or any Bank to
enforce its claims against the Borrower, except as otherwise specifically
provided for in this Agreement (PROVIDED that if an Event of Default specified
in Section 8.05 shall occur with respect to the Borrower, the result which would
occur upon the giving of written notice by the Agent as specified in clauses (i)
and (ii) below shall occur automatically without the giving of any such notice):
(i) declare the Total Commitment (or the unutilized portion thereof) terminated,
whereupon the Commitment (or the unutilized portion thereof, as the case may be)
of each Bank shall forthwith terminate immediately; and/or (ii) declare the
principal of and any accrued interest in respect of all Loans and Competitive
Bid Loans and all Obligations owing hereunder and under the other Credit
Documents to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower.
SECTION 9. DEFINITIONS. As used herein, the following terms shall have the
meanings herein specified unless the context otherwise requires. Defined terms
in this Agreement shall include in the singular number the plural and in the
plural the singular:
"Absolute Rate" shall mean an interest rate (rounded to the nearest .0001)
expressed as a decimal.
40
"Absolute Rate Borrowing" shall mean a Competitive Bid Borrowing with
respect to which the Borrower has requested that the Banks offer to make
Competitive Bid Loans at Absolute Rates.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power (i) to vote 10% or more
of the securities having ordinary voting power for the election of directors of
such corporation or (ii) to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Agent" shall have the meaning provided in the first paragraph of this
Agreement and shall include any successor to the Agent appointed pursuant to
Section 10.09.
"Aggregate Loan Outstandings" shall have the meaning provided in Section
3.02(a).
"Agreement" shall mean this Amended and Restated Credit Agreement, as the
same may be from time to time modified, amended and/or supplemented.
"Applicable Eurodollar Margin" shall mean, for any day, the rate per annum
set forth below opposite the Applicable Rating Period then in effect:
Applicable Rating Applicable Eurodollar
Period Margin
----------------- ----------------------
Category A Period 0.4250%
Category B Period 0.5250%
Category C Period 0.6250%
Category D Period 1.0000%
"Applicable Facility Fee Percentage" shall mean, for any day, the
percentage set forth below opposite the Applicable Rating Period then in effect:
Applicable Rating Applicable Facility
Period Fee Percentage
----------------- -------------------
Category A Period 0.2000%
Category B Period 0.2250%
Category C Period 0.2500%
Category D Period 0.3750%
"Applicable Insurance Regulatory Authority" shall mean, when used with
respect to any Regulated Insurance Company, the insurance department or similar
administrative
41
authority or agency located in (x) each state or other jurisdiction in which
such Regulated Insurance Company is domiciled or (y) to the extent asserting
regulatory jurisdiction over such Regulated Insurance Company, the insurance
department, authority or agency in each state or other jurisdiction in which
such Regulated Insurance Company is licensed, and shall include any Federal
insurance regulatory department, authority or agency that may be created and
that asserts regulatory jurisdiction over such Regulated Insurance Company.
"Applicable Rating Period" shall mean, subject to the terms and conditions
set forth below in this definition, the period set forth below then in effect:
Applicable Rating
Period Criteria
----------------- --------
Category A Period The S&P Credit Rating is BBB+ or above AND the Xxxxx'x
Credit Rating is Baa1 or above
Category B Period The S&P Credit Rating is BBB+ or above AND the Xxxxx'x
Credit Rating is Baa2 or above, but no Category A
period is in effect at such time.
Category C Period The S&P Credit Rating is BBB- or above AND the Xxxxx'x
Credit Rating is Baa3 or above, but no Category A or B
period is in effect at such time.
Category D Period The S&P Credit Rating is below BBB- OR the Xxxxx'x
Credit Rating is below Baa3.
If (a) only one of a Xxxxx'x Credit Rating and an S&P Credit Rating exists at
any time (the Rating Agency which has assigned a Credit Rating is hereinafter
referred to as the "Assigning Rating Agency" and the Rating Agency which has no
assigned Credit Rating is hereinafter referred to as the "Non-Assigning Rating
Agency") and (b) the Non-Assigning Rating Agency either (i) states an implied
rating for the Borrower's senior long-term debt and/or (ii) assigns a Credit
Rating to the TOPrS, then the Applicable Rating Period shall be determined as
set forth above based on the Credit Rating of the Assigning Rating Agency and
the stated implied senior debt rating of the Non-Assigning Rating Agency or, if
no such stated implied senior debt rating exists, two "full ratings" above the
Credit Rating assigned by the Non-Assigning Rating Agency to the TOPrS (it being
understood that a "full rating" shall include numerical modifiers and (+) and
(-) modifiers). In the event that an Assigning Rating Agency has assigned a
Credit Rating and the Non-Assigning Rating Agency does not state an implied
rating for the Borrower's senior long-term debt or assign a Credit Rating to the
TOPrS, then the Applicable Rating Period shall be determined as set forth above
based on such Credit Rating.
In the event that (a) no Credit Rating exists with respect to the Borrower's
senior long-term debt, then the Applicable Rating Period shall be determined as
follows: (a) if both Xxxxx'x and S&P state an implied rating for any senior
long-term debt of the Borrower, then the Applicable Rating
42
Period shall be determined by reference to such implied ratings; or (b) if (i)
only one of Xxxxx'x and S&P states an implied rating for any senior long-term
debt of the Borrower and (ii) the Non-Assigning Rating Agency assigns a Credit
Rating to the TOPrS, then the Applicable Rating Period shall be determined as
set forth above based on the stated implied senior debt rating of the Assigning
Rating Agency and two "full ratings" above the Credit Rating of the
Non-Assigning Rating Agency assigned to the TOPrS.
In the event that (a) no Credit Rating exists with respect to the Borrower's
senior long-term debt and no stated implied rating exists for the senior
long-term debt of the Borrower, then the Applicable Rating Period shall be
determined as follows: (a) if both Xxxxx'x and S&P assign a Credit Rating to the
TOPrS, then the Applicable Rating Period shall be two "full ratings" above such
assigned ratings; (b) if only one of Xxxxx'x and S&P assigns a Credit Rating to
the TOPrS, then the Applicable Rating Period shall be two "full ratings" above
the Credit Rating assigned to the TOPrS assigned by the Assigning Rating Agency.
If any Credit Rating shall be changed by Xxxxx'x or S&P, such change shall be
effective for purposes of this definition as of the Business Day following the
day on which the Borrower notifies the Banks of such change pursuant to Section
6.01(h), PROVIDED that if such change represents a downgrade and the Borrower
fails to notify the Banks thereof pursuant to Section 6.01(h), then such change
shall be effective on the fourth Business Day after a senior officer of the
Borrower obtained knowledge of such downgrade. Any change in the Applicable
Rating Period due to a change in a Credit Rating shall apply during the period
commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. In the event
that and for so long as the Borrower has no senior debt or TOPrS that is rated
by Moody's or S&P including, without limitation, stated implied rating, then a
Category D Period shall be deemed to exist.
"Applicable Utilization Fee Percentage" shall mean (i) 0% at any time when
the Aggregate Loan Outstandings are less than or equal to 33-1/3% of the Total
Commitment, (ii) 0.0625% at any time when the Aggregate Loan Outstandings exceed
33-1/3% but are less than or equal to 66-2/3% of the Total Commitment and (iii)
0.1250% at any time when the Aggregate Loan Outstandings exceed 66-2/3% of the
Total Commitment.
"Authorized Officer" shall mean any senior officer of the Borrower
designated as such in writing by the Borrower to, and found acceptable by, the
Agent.
"Bank" shall have the meaning provided in the first paragraph of this
Agreement.
"Bankruptcy Code" shall have the meaning provided in Section 8.05.
"Base Rate" at any time shall mean the higher of (x) the rate which is 1/2
of 1% plus the Federal Funds Effective Rate and (y) the Prime Lending Rate as in
effect from time to time.
"Base Rate Loans" shall mean each Loan bearing interest at the rates
provided in Section 1.09(a).
43
"Bidder Bank" shall mean each Bank that has notified in writing (and has
not withdrawn such notice) the Agent that it desires to participate generally in
the bidding arrangements relating to Competitive Bid Borrowings.
"Borrower" shall have the meaning provided in the first paragraph of this
Agreement.
"Borrowing" shall mean (i) the incurrence of one Type of Loan by the
Borrower from all of the Banks on a PRO RATA basis on a given date (or resulting
from conversions on a given date), having in the case of Eurodollar Loans the
same Interest Period, PROVIDED that Base Rate Loans incurred pursuant to Section
1.11(b) shall be considered part of any related Borrowing of Eurodollar Loans or
(ii) a Competitive Bid Borrowing.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in the City of New York a legal holiday or a day on which banking institutions
are authorized by law or other governmental actions to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans or Competitive Bid Loans priced by
reference to the Eurodollar Rate, any day which is a Business Day described in
clause (i) and which is also a day for trading by and between banks in U.S.
dollar deposits in the interbank Eurodollar market.
"Capital Expenditures" shall mean expenditures by any Person that, in
conformity with GAAP, are or are required to be included in the property, plant
or equipment reflected in the balance sheet of such Person.
"Capital Lease" as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is, or is required to be, accounted for as a capital lease
on the balance sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations under Capital
Leases of the Borrower or any of its Subsidiaries in each case taken at the
amount thereof accounted for as liabilities in accordance with GAAP.
"Change of Control" shall mean (i) the Borrower shall cease to own,
directly, 100% of the capital stock of FCIG (or its surviving or successor
corporation pursuant to a transaction permitted by Section 7.02), or FCIG shall
cease to own, directly or indirectly, 100% of the capital stock of FIC (or its
surviving or successor corporation pursuant to a transaction permitted by
Section 7.02), (ii) the acquisition, whether directly or indirectly, by any
Person or "group" (as defined in Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended) (other than an employee benefit or stock ownership plan of
the Borrower) of more than 30% of the voting stock of the Borrower or (iii)
during any period of 25 consecutive calendar months, a majority of the Board of
Directors of the Borrower shall no longer be composed of individuals (x) who
were members of said Board on the first day of such period, (y) whose election
or nomination to said Board was approved by individuals referred to in clause
(x) above constituting at the time of such election or nomination at least a
majority of said Board or (z) whose election
44
or nomination to said Board was approved by individuals referred to in clauses
(x) and (y) above constituting at the time of such election or nomination at
least a majority of said Board.
"Chase" shall mean The Chase Manhattan Bank.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.
"Commitment" shall mean, with respect to each Bank, the amount set forth
opposite such Bank's name in Annex I hereto, as the same may be reduced or
terminated pursuant to Sections 2.02, 2.03 and/or 8.
"Competitive Bid Borrowing" shall mean a Borrowing of Competitive Bid Loans
pursuant to Section 1.04.
"Competitive Bid Loan" shall have the meaning provided in Section 1.01(b).
"Consolidated EBIT" shall mean, for any period, the sum of (i) Consolidated
Net Income of the Borrower for such period, (ii) provisions for taxes based on
income or profits to the extent such income or profits were included in
computing Consolidated Net Income for such period and (iii) Consolidated
Interest Expense (including amortization of original issue discount and the
interest component of Capitalized Lease Obligations), net of interest income,
theretofore deducted from earnings in computing Consolidated Net Income for such
period, PROVIDED that in determining Consolidated EBIT for any period there
shall be excluded any portion thereof otherwise included therein (whether
positive or negative) attributable to FFC and its Subsidiaries.
"Consolidated Interest Expense" shall mean, for any period, the sum of (i)
total interest expense (including that attributable to Capital Leases in
accordance with GAAP) of the Borrower and its Subsidiaries for such period, but
excluding therefrom all interest attributable to FGCC and its Subsidiaries and
(ii) all cash dividends paid on Qualified Preferred Stock and Non-Qualified
Preferred Stock during such period.
"Consolidated Net Income" shall mean, for any period, the net income (or
loss) of the Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period, as determined in accordance with
GAAP.
"Consolidated Net Worth" shall mean, at any time, Net Worth of the Borrower
and its Subsidiaries determined on a consolidated basis in accordance with GAAP
after appropriate deduction for any minority interests in Subsidiaries.
"Contingent Obligations" shall mean, as to any Person, without duplication,
any obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of
45
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor (excluding any obligation or commitment of any Financial
Services Subsidiary to advance funds to any borrower pursuant to a lending
contract entered into in the ordinary course of business), (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (d) otherwise to assure or hold harmless
the owner of such primary obligation against loss in respect thereof; PROVIDED,
HOWEVER, that the term Contingent Obligation shall not include (i) endorsements
of instruments for deposit or collection in the ordinary course of business,
(ii) indemnities granted in the ordinary course of business and (iii) any
insurance or reinsurance obligation of any Regulated Insurance Company entered
into in the ordinary course of the insurance business of such Regulated
Insurance Company. The amount of any Contingent Obligation shall, subject to any
contractual limitation stated in such Contingent Obligation, be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Credit Documents" shall mean this Agreement, the Notes and all other
documents or instruments required to be delivered hereunder or thereunder.
"Credit Rating" shall mean the Moody's Credit Rating and the S&P Credit
Rating.
"Default" shall mean any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which, from and after the Restatement Effective Date, together with the
Borrower, or any Subsidiary of the Borrower, would be deemed to be a member of
the same "controlled group" within the meaning of Section 414(b), (c), (m) and
(o) of the Code.
"ESOP Loan" shall mean any indebtedness of a third party incurred in
connection with an employee stock ownership plan and guaranteed by the Borrower.
"Eurodollar Loans" shall mean each Loan bearing interest at the rates
provided in Section 1.09(b).
"Eurodollar Rate" shall mean with respect to each Interest Period, (i) the
arithmetic average (rounded to the nearest 1/100 of 1%) of the offered
quotations to first-class banks in the interbank Eurodollar market by each
Reference Bank for dollar deposits of amounts in same day funds comparable to
the outstanding principal amount of the Eurodollar Loan of such Reference Bank
for which an interest rate is then being determined (or in the case of a
46
Competitive Bid Loan that is a Spread Borrowing priced by reference to the
Eurodollar Rate, the arithmetic average (rounded to the nearest 1/100 of 1%) of
the offered rates for deposits in U.S. dollars for the applicable Interest
Period (or the period closest to such applicable Interest Period) which appear
on the Telerate Page 3750, British Bankers Association Interest Settlement Rates
(or if such Telerate Page is unavailable, the comparable page on the Reuters
Screen LIBO Page)) with maturities comparable to the Interest Period, determined
as of 10:00 A.M. (New York time) on the date which is two Business Days prior to
the commencement of such Interest Period, divided (and rounded upward to the
next whole multiple of 1/16 of 1%) by (ii) a percentage equal to 100% minus the
then stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or any successor category
of liabilities under Regulation D); PROVIDED that if one or more of the
Reference Banks fails to provide the Agent with its aforesaid rate, then the
Eurodollar Rate shall be determined based on the rate or rates provided to the
Agent by the other Reference Bank or Banks.
"Event of Default" shall have the meaning provided in Section 8.
"Existing Credit Agreement" shall have the meaning provided in the first
recital paragraph of this Agreement.
"Existing Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description (including, without
limitation, principal, interest and facility fees), and at any time existing,
owing to the Agent or any other bank pursuant to the terms of the Existing
Credit Agreement.
"Facility Fee" shall have the meaning provided in Section 2.01(a).
"FCIG" shall mean Fremont Compensation Insurance Group, Inc. a Delaware
corporation.
"Federal Funds Effective Rate" shall mean for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to in,
Section 2.01.
"FFC" shall mean Fremont Financial Corporation, a California corporation.
"FGCC" shall mean Fremont General Credit Corporation, a California
corporation which is a direct Wholly-Owned Subsidiary of the Borrower.
47
"FIC" shall mean Fremont Indemnity Company, a property and casualty
insurance company organized under the laws of California.
"FIC Combined Surplus" shall mean, at any time, the combined Policyholder
Surplus of FIC and its Subsidiaries at such time.
"FIL" shall mean Fremont Investment & Loan, a California corporation.
"Final Maturity Date" shall mean June 30, 2003.
"Financial Services Non-Thrift Subsidiaries" shall mean all Financial
Services Subsidiaries other than Thrift Subsidiaries.
"Financial Services Subsidiaries" shall mean and include (i) FGCC and its
Subsidiaries, (ii) any Securitization Subsidiary that is not otherwise included
in clause (i) above, (iii) any Thrift Subsidiary that is not otherwise included
in clause (i) above and (iv) all other Subsidiaries of the Borrower, whether in
existence on the Restatement Effective Date or created or acquired thereafter;
but in any event excluding the Insurance Subsidiaries.
"FRC" shall mean Fremont Reinsurance Company, a California corporation.
"GAAP" shall mean generally accepted accounting principles in the United
States of America; it being understood and agreed that determinations in
accordance with GAAP for purposes of Section 7, including defined terms as used
therein, are subject (to the extent provided therein) to Section 11.07(a).
"Indebtedness" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (iii) the face amount of all
letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (iv) all Indebtedness of a second
Person secured by any Lien on any property owned by such first Person, whether
or not such Indebtedness has been assumed, PROVIDED that if such Indebtedness is
not assumed, the amount of such Indebtedness shall be deemed for purposes hereof
to be the lesser of the principal amount of such Indebtedness and the fair
market value of the property securing such Indebtedness, (v) all Capitalized
Lease Obligations of such Person, (vi) all obligations of such Person to pay a
specified purchase price for goods or services whether or not delivered or
accepted, I.E., take-or-pay and similar obligations, (vii) all obligations of
such Person under Interest Rate Protection Agreements or Other Hedging
Agreements, (viii) all Contingent Obligations of such Person and (ix) any
obligation of the type referred to in any of clauses (i)-(viii) above of any
general partnership of which such Person is the or a general partner; PROVIDED
that Indebtedness shall not include trade payables (including reinsurance
payables), daylight overdrafts, open accounts, accrued expenses, indemnities,
and insurance and reinsurance obligations of Regulated Insurance Companies, in
each case arising in the ordinary course of business.
"Insurance Business" shall mean one or more aspects of the business of
selling, issuing or underwriting insurance or reinsurance.
48
"Insurance Subsidiaries" shall mean (i) FCIG, (ii) each of FCIG's
Subsidiaries (whether in existence on the Restatement Effective Date or created
or acquired thereafter) and (iii) each other Subsidiary of the Borrower created
or acquired after the Restatement Effective Date that engages in property and
casualty insurance operations, workers compensation insurance operations or the
activities of which are limited to holding the stock or other securities of
another Subsidiary or Subsidiaries engaged in property and casualty insurance
operations and/or workers compensation insurance.
"Insured Depository Subsidiary" shall mean any Subsidiary of the Borrower
that is an "insured depository institution" within the meaning of 12 U.S.C. ss.
1813(c)(2).
"Interest Period" shall mean (x) with respect to any Eurodollar Loan, the
interest period applicable thereto, as determined pursuant to Section 1.10 and
(y) with respect to any Competitive Bid Loan, the period beginning on the date
of incurrence thereof and ending on the stated maturity thereof.
"Interest Rate Basis" shall mean the Eurodollar Rate and/or such other
basis for determining an interest rate as the Borrower and the Agent may agree
upon from time to time.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or other similar agreement or arrangement.
"Investment" shall mean, for any Person: (a) the acquisition (whether for
cash, property, services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of any other Person or any agreement to make any such acquisition (including,
without limitation, any "short sale" or any sale of any securities at a time
when such securities are not owned by the Person entering into such short sale);
(b) the making of any deposit with, or advance, loan or other extension of
credit to, any other Person (including the purchase of property from another
Person subject to an understanding or agreement, contingent or otherwise, to
resell such property to such Person) and (without duplication) the entering into
of any commitment to deposit funds with, advance or lend funds to or otherwise
extend credit to such Person; (c) the entering into of any Contingent Obligation
with respect to Indebtedness or other liability of any other Person; or (d) the
entering into by such Person of any interest rate protection agreement.
"Investment Grade Securities" shall mean (i) any securities (as defined in
Section 8-102(1)(c) of the UCC as in effect in the State of New York on the
Restatement Effective Date) that are rated BBB- or higher by S&P, Baa3 or higher
by Moody's, Class (2) or higher by NAIC or the equivalent of such rating by S&P,
Moody's or NAIC, or if none of S&P, Moody's and NAIC shall then exist, the
equivalent of such rating by any other nationally recognized securities rating
agency or (ii) any fund investing exclusively in investments of the type
described in clause (i) which fund may also hold immaterial amounts of cash
pending investment and/or distribution.
"Investors Bancor" shall mean Investors Bancor, a California corporation.
49
"Legal Requirements" shall mean all applicable laws, rules, orders and
regulations made by any governmental body or regulatory authority (including,
without limitation, any Applicable Insurance Regulatory Authority) having
jurisdiction over the Borrower or a Subsidiary of the Borrower.
"Liabilities to Policyholder Surplus Ratio" shall mean, at any time, the
ratio of (a) consolidated liabilities (determined on a consolidated basis
without duplication in accordance with SAP) of FIC and its consolidated
Subsidiaries at such time to (b) the consolidated Policyholder Surplus of FIC
and its consolidated Subsidiaries at such time.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement or any lease
in the nature thereof).
"Liquid Yield Option Notes" shall mean the Borrower's $373,750,000
Aggregate Principal Amount at Maturity Liquid Yield Option(TM) Notes due 2013
(Zero Coupon Subordinated) Effective October 4, 1993.
"Loan" and "Loans" shall have the meaning provided in Section 1.01(a).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect in the
condition (financial or otherwise , determined pursuant to GAAP or SAP),
business, operations, properties, assets or liabilities of the Borrower and its
Subsidiaries taken as a whole.
"Material Insurance Subsidiary" shall mean any Insurance Subsidiary whose
Policyholder Surplus constitutes 10% or more of the combined Policyholder
Surplus of FCIG.
"Moody's" shall mean Xxxxx'x Investors Service, Inc. and its successors.
"Moody's Credit Rating" shall mean the rating level (it being understood
that a rating level shall include numerical modifiers and (+) and (-) modifiers)
assigned by Moody's to the senior unsecured long-term debt of the Borrower.
"NAIC" shall mean the National Association of Insurance Commissioners or
any successor organization thereto.
"NAIC Tests" shall mean the ratios and other financial measurements
developed by the NAIC under its Insurance Regulatory Information System, as
initially in effect with respect to property and casualty insurance companies
and as thereafter modified, supplemented, replaced or eliminated from time to
time.
"Net Premiums Written" shall mean, for any period, determined in accordance
with SAP, the aggregate amount of premiums written by all Subsidiaries of FCIG
which are Regulated Insurance Companies (determined on a combined basis) during
such period.
50
"Net Worth" shall mean, as to any Person, the sum of its capital stock,
capital in excess of par or stated value of shares of its capital stock,
retained earnings and any other account which, in accordance with GAAP,
constitutes stockholders' equity, but excluding (i) any treasury stock and (ii)
the effect, if any, of unrealized capital gains and losses.
"Non-Investment Grade Securities" shall mean any securities (as defined in
Section 8-102(1)(c) of the UCC as in effect in the State of New York on the
Restatement Effective Date) (i) that are not rated by any of S&P, Xxxxx'x or the
NAIC or (ii) that are not Investment Grade Securities.
"Non-Qualified Preferred Stock" shall mean any preferred stock issued by
the Borrower other than Qualified Preferred Stock, so long as (i) at the time of
the issuance of any such preferred stock, no Default or Event of Default exists
or would result from the issuance thereof, (ii) at the time of the issuance of
any such preferred stock, the Borrower will be in compliance with Sections 7.12
and 7.14 determined on a PRO FORMA basis as if such preferred stock were
outstanding and (iii) no such preferred stock shall mature, or be subject to any
mandatory redemption, put or similar requirement prior to the Final Maturity
Date.
"Note" and "Notes" shall have the meaning provided in Section 1.06(a).
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice of Competitive Bid Borrowing" shall have the meaning provided in
Section 1.04.
"Notice of Conversion" shall have the meaning provided in Section 1.07.
"Notice Office" shall mean the office of the Agent at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or such other office as the Agent may designate to the
Borrower and the Banks from time to time.
"Obligations" shall mean all amounts, direct or indirect, contingent or
absolute, of every type or description, and at any time existing, owing to the
Agent or any Bank pursuant to the terms of this Agreement or any other Credit
Document.
"Other Hedging Agreement" shall mean any foreign exchange contracts,
currency swap agreements or other similar agreements or arrangements designed to
protect against the fluctuations in currency values.
"Payment Office" shall mean the office of the Agent at Xxx Xxxxx Xxxxxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other office as the Agent may designate
to the Borrower and the Banks from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
51
"Percentage" shall mean for each Bank on each date of determination a
fraction the numerator of which is equal to the Commitment of such Bank on such
date and the denominator of which is equal to the Total Commitment on such date,
PROVIDED that if the Percentage of any Bank is to be determined after the Total
Commitment has been terminated, then the Percentage for each Bank shall be a
fraction the numerator of which is equal to the aggregate principal amount of
Loans of such Bank outstanding on such date and the denominator of which is
equal to the aggregate principal amount of all Loans outstanding on such date.
"Permitted Acquisition" shall have the meaning provided in Section 7.02(c).
"Permitted Acquisition Debt" shall mean Indebtedness of any Insurance
Subsidiary acquired by the Borrower after the Restatement Effective Date,
PROVIDED that (i) such Indebtedness was in existence prior to such acquisition
and was not created in connection with, or in contemplation of, such acquisition
and (ii) neither the Borrower nor any of its other Subsidiaries guaranties or is
otherwise obligated in any manner in respect of such Indebtedness.
"Permitted Subordinated Debt" shall mean Indebtedness of the Borrower
expressly subordinated to the Obligations, which (i) shall contain no financial
maintenance covenants or cross-default provisions (it being understood and
agreed that a cross-acceleration provision shall be permitted), (ii) shall have
no maturities, scheduled repayments or sinking fund requirements prior to one
year following the Final Maturity Date and (iii) shall contain terms and
conditions relating to the interest rate applicable thereto, covenants,
defaults, remedies and subordination provisions, and shall be issued pursuant to
documentation, which shall be in form and substance reasonably satisfactory to
the Agent.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any multi-employer or single-employer plan as defined in
Section 4001 of ERISA, which is contributed to pursuant to collective bargaining
requirements or maintained by, or at any time during the five calendar years
preceding the date of this Agreement was contributed to pursuant to collective
bargaining requirements or maintained by, the Borrower, any Subsidiary or an
ERISA Affiliate.
"Policyholder Surplus" of any Person shall mean, at any time, the
consolidated policyholders' surplus (determined on a consolidated basis without
duplication in accordance with SAP) of such Person and its consolidated
Subsidiaries at such time (but excluding therefrom the effect of any unrealized
gains and losses from the marketable securities portfolio of such Person and its
consolidated Subsidiaries).
"Prescribed Forms" shall mean such duly executed form(s) or statement(s),
and in such number of copies, which may, from time to time, be prescribed by law
and which, pursuant to applicable provisions of (a) an income tax treaty between
the United States and the country of residence of the Bank providing the form(s)
or statement(s), (b) the Code, or (c) any applicable
52
rule or regulation under the Code, permit the Borrower to make payments
hereunder for the account of such Bank free of deduction or withholding of
income or similar taxes.
"Prime Lending Rate" shall mean the rate which the Agent
announces from time to time as its prime commercial lending rate, the Prime
Lending Rate to change when and as such prime commercial lending rate changes.
The Prime Lending Rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged to any customer. The Agent may make
commercial loans or other loans at rates of interest at, above or below the
Prime Lending Rate.
"Qualified Preferred Stock" shall mean any perpetual preferred stock issued
by the Borrower which shall not be subject to any mandatory redemption, put or
similar requirements.
"Rating Agencies" shall mean each of Moody's and S&P.
"Reference Banks" shall mean Chase, Dresdner Bank AG, New York Branch and
Grand Cayman Branch and First Union National Bank.
"Register" shall have the meaning provided in Section 1.06(d).
"Regulated Insurance Company" shall mean any Subsidiary of the Borrower,
whether now owned or hereafter acquired, that is authorized or admitted to carry
on or transact Insurance Business in any jurisdiction and is regulated by the
insurance department or similar regulatory authority of such jurisdiction.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.
"Reply Date" shall have the meaning provided in Section 1.04(b).
"Reportable Event" shall mean an event described in Section 4043(b) of
ERISA with respect to a Plan as to which the 30-day notice requirement has not
been waived by the PBGC.
"Required Banks" shall mean Banks having Commitments which constitute more
than 50% of the Total Commitment, PROVIDED that at any time after the Total
Commitment has been terminated, the "Required Banks" shall mean Banks whose
Loans and Competitive Bid Loans constitute more than 50% of the aggregate
principal amount of Loans and Competitive Bid Loans outstanding at such time.
"Restatement Effective Date" shall have the meaning provided in Section
4.01.
53
"Reuters Screen" shall mean, when used in connection with any designated
page in determining the applicable Eurodollar Rate for an Interest Period for a
Competitive Bid Borrowing that is a Spread Borrowing priced by reference to the
Eurodollar Rate, the display page so designated on the Reuters Monitor Money
Rates Service (or such other page as may replace that page on that service for
the purpose of displaying comparable rates).
"S&P" shall mean Standard & Poor's Rating Group. a division of the
XxXxxx-Xxxx Industries, Inc., and its successors.
"S&P Credit Rating" shall mean the rating level (it being understood that a
rating level shall include numerical modifiers and (+) and (-) modifiers)
assigned by S&P to the senior unsecured long-term debt of the Borrower.
"SAP" shall mean, with respect to any Regulated Insurance Company, the
accounting procedures and practices prescribed or permitted by the Applicable
Insurance Regulatory Authority of the state in which such Regulated Insurance
Company is domiciled; it being understood and agreed that determinations in
accordance with SAP for purposes of Section 7, including defined terms as used
therein, are subject (to the extent provided therein) to Section 11.07(a).
"SEC" shall mean the Securities and Exchange Commission or any successor
thereto.
"SEC Regulation D" shall mean Regulation D as promulgated under the
Securities Act of 1933, as amended, as the same may be in effect from time to
time.
"Securitization Subsidiaries" shall mean (i) FFC, (ii) each of FFC's
Subsidiaries (whether in existence on the Restatement Effective Date or created
or acquired thereafter), (iii) each other Subsidiary of the Borrower created or
acquired after the Restatement Effective Date that engages in asset
securitization operations or the activities of which are limited to holding the
stock or securities of another Subsidiary or Subsidiaries engaged in asset
securitization operations and (iv) any other Financial Services Subsidiaries
which enters into asset securitization transactions after the Restatement
Effective Date.
"Spread" shall mean a percentage per annum in excess of, or less than, an
Interest Rate Basis.
"Spread Borrowing" shall mean a Competitive Bid Borrowing with respect to
which the Borrower has requested the Banks to make Competitive Bid Loans at a
Spread over or under a specified Interest Rate Basis.
"Subsidiary" of any Person shall mean and include (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture, limited liability company
54
or other entity in which such Person directly or indirectly through Subsidiaries
has more than a 50% equity or voting interest at the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Taxes" shall have the meaning provided in Section 3.04.
"Telerate Page" shall mean, when used in connection with any designated
page number, the display page so designated on the Dow Xxxxx Telerate Service
(or such other page as may replace that page on that service, or such other
service as may be nominated as the information vendor, for the purpose of
displaying rates or prices comparable to the Eurodollar Rate).
"Thrift Subsidiaries" shall mean (i) Investors Bancor, (ii) each of
Investors Bancor's Subsidiaries (whether in existence on the Restatement
Effective Date or created or acquired thereafter, and in any event including FIL
and FCMF) and (iii) each other Subsidiary of the Borrower created or acquired
after the Restatement Effective Date that engages in thrift operations or the
activities of which are limited to holding the stock or securities of another
Subsidiary or Subsidiaries engaged in thrift operations.
"TOPrS" shall mean the trust originated preferred securities issued by a
TOPrS Subsidiary, the proceeds of which were loaned to the Borrower.
"TOPrS Debt" shall mean indebtedness of the Borrower owed to a TOPrS
Subsidiary and incurred in connection with the issuance of the TOPrS by such
TOPrS Subsidiary.
"TOPrS Subsidiary" shall mean a Wholly-Owned Subsidiary of the Borrower
which issued TOPrS and loaned the proceeds received therefrom to the Borrower.
"Total Capitalization" shall mean, at any time, the sum of (i) Total Funded
Indebtedness, plus (ii) Consolidated Net Worth (which shall include solely for
this purpose the TOPrS Debt) at such time, plus (iii) to the extent not included
in the determination of Total Funded Indebtedness or Consolidated Net Worth, all
Qualified Preferred Stock and Non-Qualified Preferred Stock outstanding at such
time.
"Total Commitment" shall mean the sum of the Commitments of each Bank.
"Total Funded Indebtedness" shall mean, at any time, Total Indebtedness at
such time less any portion of such Total Indebtedness constituting Contingent
Obligations.
"Total Indebtedness" shall mean, at any time, the sum of (i) all
Indebtedness (including, without limitation, the Borrower's Liquid Yield Option
Notes, but excluding the TOPrS Debt and any ESOP Loan) of the Borrower at such
time and (ii) all Non-Qualified Preferred Stock outstanding at such time.
"Total Unutilized Commitment" shall mean at any time for the determination
thereof, the Total Commitment less the Aggregate Loan Outstandings at such time.
55
"Type" shall mean any type of Loan determined with respect to the interest
option applicable thereto, I.E., a Base Rate Loan or Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code.
"Unfunded Current Liability" of any Plan shall mean the amount, if any, by
which the present value of the accrued benefits under such Plan as of the close
of its most recent plan year exceeds the fair market value of the assets
allocable thereto, determined in accordance with Section 412 of the Code.
"United States" and "U.S." shall each mean the United States of America.
"Utilization Fee" shall have the meaning provided for in Section 2.01(b).
"Wholly-Owned Subsidiary" of any Person shall mean any Subsidiary of such
Person to the extent all of the capital stock or other ownership interests in
such Subsidiary, other than directors' or nominees' qualifying shares, is owned
directly or indirectly by such Person.
"Written" or "in writing" shall mean any form of written communication or a
communication by means of facsimile device.
SECTION 10. THE AGENT.
10.01 APPOINTMENT. Subject to the provisions of Section 10.09, each Bank
hereby irrevocably designates and appoints Chase as Agent of each such Bank to
act as specified herein and in the other Credit Documents and each such Bank
hereby irrevocably authorizes Chase as the Agent for each such Bank to take such
action on its behalf under the provisions of this Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental thereto.
The Agent agrees to act as such upon the express conditions contained in this
Section 10. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Agent shall not have any duties or responsibilities, except those
expressly set forth herein or in the other Credit Documents, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Agent. The provisions of this Section
10 are solely for the benefit of the Agent and the Banks, and the Borrower shall
have no rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and the Agent shall not assume, nor shall it be
deemed to have assumed, any obligation or relationship of agency or trust with
or for the Borrower or any of its Subsidiaries.
10.02 DELEGATION OF DUTIES. The Agent may execute any of its duties under
this Agreement or any other Credit Document by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care except to the extent otherwise required by Section 10.03.
56
10.03 EXCULPATORY PROVISIONS. Neither the Agent nor any of its respective
officers, directors, employees, representatives, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement (except
for its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Banks for any recitals, statements,
representations or warranties made by the Borrower, any Subsidiary or any of
their respective officers contained in this Agreement, any other Credit Document
or in any certificate, report, statement or other document referred to or
provided for in, or received by the Agent under or in connection with, this
Agreement or any other Credit Document or for any failure of the Borrower or any
Subsidiary or any of their respective officers to perform its obligations
hereunder or thereunder. The Agent shall not be under any obligation to any Bank
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower or any Subsidiary. The Agent shall
not be responsible to any Bank for the effectiveness (other than its own
execution), genuineness, validity, enforceability, collectibility or sufficiency
of this Agreement or any Credit Document or for any representations, warranties,
recitals or statements made herein or therein or made in any written or oral
statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Agent to the Banks or by or on behalf of the Borrower
to the Agent or any Bank or be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained herein or therein or as to the use of the proceeds of
the Loans or Competitive Bid Loans or of the existence or possible existence of
any Default or Event of Default.
10.04 RELIANCE BY AGENT. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, facsimile, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other
experts selected by the Agent. The Agent shall be fully justified in failing or
refusing to take or continue to take any action under this Agreement or any
other Credit Document unless it shall first receive such advice or concurrence
of the Required Banks as it deems appropriate or it shall first be indemnified
to its satisfaction by the Banks against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Credit Documents in accordance with a
request of the Required Banks, (or to the extent specifically provided in
Section 11.10, all the Banks), and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Banks.
10.05 NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Agent has received notice from a Bank or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall give prompt notice thereof to the Banks. The Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably
57
directed by the Required Banks, PROVIDED that, unless and until the Agent shall
have received such directions, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Banks.
10.06 NON-RELIANCE ON AGENT AND OTHER BANKS. Each Bank expressly
acknowledges that neither the Agent nor any of its respective officers,
directors, employees, agents, representatives, attorneys-in-fact or affiliates
has made any representations or warranties to it and that no act by the Agent
hereinafter taken, including any review of the affairs of the Borrower or any
Subsidiary, shall be deemed to constitute any representation or warranty by the
Agent to any Bank. Each Bank represents to the Agent that it has, independently
and without reliance upon the Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the businesses, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the Borrower
and its Subsidiaries and made its own decision to make its Loans and its
Competitive Bid Loans hereunder and enter into this Agreement. Each Bank also
represents that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement, and to make
such investigation as it deems necessary to inform itself as to the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower and its Subsidiaries. Except for notices,
reports and other documents expressly required to be furnished to the Banks by
the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the businesses,
operations, assets, property, financial and other conditions, prospects or
creditworthiness of the Borrower or any Subsidiary which may come into the
possession of the Agent or any of its officers, directors, employees, agents,
representatives, attorneys-in-fact or affiliates.
10.07 INDEMNIFICATION. The Banks agree to indemnify the Agent in its
capacity as such ratably according to their respective "percentages" as used in
determining the Required Banks at such time from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, reasonable expenses or disbursements of any kind whatsoever which may at
any time (including, without limitation, at any time following the payment of
the Obligations) be imposed on, incurred by or asserted against the Agent in its
capacity as such in any way relating to or arising out of this Agreement or any
other Credit Document, or any documents contemplated by or referred to herein or
the transactions contemplated hereby or any action taken or omitted to be taken
by the Agent under or in connection with any of the foregoing, but only to the
extent that any of the foregoing is not paid by the Borrower or any of its
Subsidiaries, PROVIDED that no Bank shall be liable to the Agent for the payment
of any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
gross negligence or willful misconduct of the Agent. If any indemnity furnished
to the Agent for any purpose shall, in the opinion of the Agent be insufficient
or become impaired, the Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against until such additional indemnity
is furnished. The agreements in this Section 10.07 shall survive the payment of
all Obligations.
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10.08 AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Borrower and its Affiliates as though the Agent were not the Agent
hereunder. With respect to the Loans and Competitive Bid Loans made by it and
all Obligations owing to it, the Agent shall have the same rights and powers
under this Agreement as any Bank and may exercise the same as though it were not
the Agent and the terms "Bank" and "Banks" shall include the Agent in its
individual capacity.
10.09 RESIGNATION OF THE AGENT; SUCCESSOR AGENT. The Agent may resign as
the Agent upon 20 days' notice to the Banks. Upon the resignation of the Agent,
the Required Banks shall appoint from among the Banks a successor Agent for the
Banks subject to prior approval by the Borrower, whereupon such successor agent
shall succeed to the rights, powers and duties of the Agent, and the term
"Agent" shall include such successor agent effective upon its appointment, and
the resigning Agent's rights, powers and duties as the Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement. After the resignation of the
Agent hereunder, the provisions of this Section 10 shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was the Agent under
this Agreement.
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SECTION 11. MISCELLANEOUS.
11.01 PAYMENT OF EXPENSES, ETC. The Borrower agrees to: (i) whether or not
the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Agent in connection with the
negotiation, preparation, execution and delivery of the Credit Documents and the
documents and instruments referred to therein and any amendment, waiver or
consent relating thereto (including, without limitation, the reasonable fees and
disbursements of White & Case LLP) and of the Agent and each of the Banks in
connection with the enforcement of the Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees and disbursements of counsel for the Agent and for each of the Banks); (ii)
pay and hold each of the Banks harmless from and against any and all present and
future stamp and other similar taxes with respect to the foregoing matters and
save each of the Banks harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent
attributable to such Bank) to pay such taxes; and (iii) indemnify the Agent and
each Bank, and their respective officers, directors, employees, representatives
and agents from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of, any investigation,
litigation or other proceeding (whether or not the Agent or any Bank is a party
thereto) related to the entering into and/or performance of any Credit Document
or the use of the proceeds of any Loans or Competitive Bid Loans hereunder or
the consummation of any other transactions contemplated in any Credit Document,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of, or a breach of any of the Credit Documents by, the Person to be
indemnified).
11.02 RIGHT OF SETOFF. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence of an Event of Default, each Bank is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Bank (including, without limitation, by branches
and agencies of such Bank wherever located) to or for the credit or the account
of the Borrower against and on account of the Obligations and liabilities of the
Borrower to such Bank under this Agreement or under any of the other Credit
Documents, including, without limitation, all interests in Obligations of the
Borrower purchased by such Bank pursuant to Section 11.06(b), and all other
claims of any nature or description arising out of or connected with this
Agreement or any other Credit Document, which are then due and payable
irrespective of whether or not such Bank shall have made any demand hereunder.
11.03 NOTICES. Except as otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
telegraphic, telex, facsimile or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered, if to the Borrower, at the address
specified opposite its signature below; if to any Bank, at its address specified
for such Bank on Annex II hereto; or, at such other address as shall be
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designated by any party in a written notice to the other parties hereto. All
such notices and communications shall be mailed, telegraphed, telexed,
telecopied, cabled or sent by overnight courier and shall be effective when
received.
11.04 BENEFIT OF AGREEMENT. (a) This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; PROVIDED that the Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of the Banks. Each Bank may at any time grant participations in any of
its rights hereunder or under any of its Notes to another financial institution;
PROVIDED that in the case of any such participation, the participant shall not
have any rights under this Agreement or any of the other Credit Documents (the
participant's rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by the Borrower hereunder
shall be determined as if such Bank had not sold such participation, except that
the participant shall be entitled to receive the additional amounts under
Sections 1.11, 1.12 and 3.04 to, and only to, the extent that such Bank would be
entitled to such benefits if the participation had not been entered into or
sold; and PROVIDED FURTHER that no Bank shall transfer, grant or assign any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan or Competitive Bid Loan or Note in which such participant
is participating or reduce the rate or extend the time of payment of interest
thereon (except in connection with a waiver of the applicability of any
post-default increase in interest rates) or Fees, or reduce the principal amount
thereof, or increase the Commitment in which such participant is participating
over the amount thereof then in effect (it being understood that a waiver of any
Default or Event of Default or of a mandatory reduction in the Total Commitment
or of a mandatory prepayment shall not constitute a change in the terms of any
Commitment and that an increase in any Commitment shall be permitted without the
consent of any participant therein if such participant's participation is not
increased as a result thereof), or (ii) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement or any
other Credit Document except in accordance with the terms hereof and thereof.
(b) Notwithstanding the foregoing, any Bank may assign all or a portion of
its Commitment, and its rights and obligations hereunder, to one or more
commercial banks or other financial institutions (including one or more Banks);
PROVIDED, HOWEVER, that no Bank may effect such an assignment without the prior
written consent of the Borrower and the Agent, neither of which consents will be
unreasonably withheld. No assignment of less than all of a Bank's Commitment and
its rights and obligations hereunder pursuant to the immediately preceding
sentence shall, to the extent such transaction represents an assignment to an
institution other than one or more Banks hereunder, be in an aggregate amount
less than the minimum of $5,000,000 (or such lesser amount as the Borrower and
the Agent shall agree). Each assignment shall be of a constant, and not a
varying percentage, of all of the assigning Bank's rights and obligations under
this Agreement. If any Bank so sells or assigns all or a part of its Commitment
and its rights hereunder or under the Notes, any reference in this Agreement or
the Notes to such assigning Bank shall thereafter refer to such Bank and to the
respective assignee to the extent of their respective interests and the
respective assignee shall have, to the extent of such assignment (unless
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otherwise provided therein), the same rights and benefits as it would if it were
such assigning Bank. Each assignment pursuant to this Section 11.04(b) shall be
effected by the assigning Bank and the assignee Bank executing an Assignment and
Assumption Agreement substantially in the form of Exhibit F (appropriately
completed). At the time of any such assignment, (i) Annex I shall be deemed to
be amended to reflect the Commitment of the respective assignee (which shall
result in a direct reduction to the Commitment of the assigning Bank) and of the
other Banks, (ii) if any such assignment occurs after the Restatement Effective
Date, at the request of the assignor or the assignee the Borrower will issue new
Notes to the respective assignee and to the assigning Bank in conformity with
the requirements of Section 1.06 and (iii) the Agent shall receive from the
assigning Bank and/or the assignee Bank or financial institution at the time of
each assignment the payment of a nonrefundable assignment fee of $3,000. Each
Bank and the Borrower agrees to execute such documents (including, without
limitation, amendments to this Agreement and the other Credit Documents) as
shall be necessary to effect the foregoing at the expense of the assignee Bank.
Promptly following any assignment pursuant to this Section 11.04(b), the
assigning Bank shall promptly notify the Borrower and the Agent thereof. Nothing
in this Section 11.04 shall prevent or prohibit any Bank from pledging its Loans
or Competitive Bid Loans or Notes hereunder to a Federal Reserve Bank in support
of borrowings made by such Bank from such Federal Reserve Bank.
11.05 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
the Agent or any Bank in exercising any right, power or privilege hereunder or
under any other Credit Document and no course of dealing between the Borrower
and the Agent or any Bank shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights and remedies herein expressly provided are cumulative and not exclusive
of any rights or remedies which the Agent or any Bank would otherwise have. No
notice to or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Agent or the Banks to any other or
further action in any circumstances without notice or demand.
11.06 PAYMENTS PRO RATA. (a) The Agent agrees that promptly after its
receipt of each payment from or on behalf of the Borrower in respect of any
Obligations of the Borrower, it shall distribute such payment to the Banks
(other than any Bank that has consented in writing to waive its PRO RATA share
of such payment) PRO RATA based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Competitive Bid Loans or Fees, of a sum which with respect to
the related sum or sums received by other Banks is in a greater proportion than
the total of such Obligation then owed and due to such Bank bears to the total
of such Obligation then owed and due to all of the Banks immediately prior to
such receipt, then such Bank receiving such excess payment shall purchase for
cash without recourse or warranty from the other Banks an interest in the
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Obligations of the Borrower to such Banks in such amount as shall result in a
proportional participation by all of the Banks in such amount, PROVIDED that if
all or any portion of such excess amount is thereafter recovered from such Bank,
such purchase shall be rescinded and the purchase price restored to the extent
of such recovery, but without interest.
11.07 CALCULATIONS; COMPUTATIONS. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with GAAP or SAP, as the case may be, consistently applied throughout the
periods involved (except as set forth in the notes thereto or as otherwise
disclosed in writing by the Borrower to the Banks). In addition, except as
otherwise specifically provided herein, all computations determining compliance
with Section 7, including definitions used therein, shall utilize accounting
principles and policies in effect from time to time; PROVIDED that if any such
accounting principle or policy (whether GAAP or SAP or both) shall change after
the Restatement Effective Date, the Borrower shall give prompt notice thereof to
the Agent and each of the Banks and if within 30 days following such notice the
Borrower, the Agent or the Required Banks shall elect by giving written notice
of such election to the other parties hereto, such computations shall not give
effect to such change unless and until this Agreement shall be amended pursuant
to Section 11.11 to give effect to such change.
(b) All computations of interest, Facility Fees and Utilization Fees
hereunder shall be made on the actual number of days elapsed over a year of 360
days.
11.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. (a) THIS AGREEMENT
AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding with respect
to this Agreement or any other Credit Document may be brought in the courts of
the State of New York or of the United States for the Southern District of New
York, and, by execution and delivery of this Agreement, the Borrower hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The Borrower hereby
irrevocably designates, appoints and empowers CT Corporation System, with
offices on the date hereof at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 as its
designee, appointee and agent to receive, accept and acknowledge for and on its
behalf, and in respect of its property, service of any and all legal process,
summons, notices and documents which may be served in any such action or
proceeding. The Agent agrees to use reasonable good faith efforts to mail, by
registered or certified mail, to the Borrower, at its address set forth opposite
its signature below, copies of any correspondence mailed or delivered to CT
Corporation System in connection with the immediately preceding sentence;
PROVIDED that no failure of the Borrower to receive, for any reason, copies of
such correspondence shall in any way affect the effectiveness of the delivery of
any legal process, summons, notice or documents delivered to CT Corporation
System. If for any reason such designee, appointee and agent shall cease to be
available to act as such, the Borrower agrees to designate a new designee,
appointee and agent in New York City on the terms and for the purposes of this
provision satisfactory to the Agent. The Borrower further irrevocably consents
to the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to the Borrower at its address for notices pursuant to
Section 11.03, such service to become effective 30
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days after such mailing. Nothing herein shall affect the right of the Agent or
any Bank to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the Borrower in any other
jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it may now
or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.
11.09 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Agent.
11.10 AMENDMENT OR WAIVER. Neither this Agreement nor any other Credit
Document nor any terms hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination is in writing
signed by the Borrower and the Required Banks, PROVIDED that no such change,
waiver, discharge or termination shall, without the consent of each Bank
affected thereby, (i) extend any date fixed for any payment of principal of any
Loan or Competitive Bid Loan or Note or reduce the rate or extend the time of
payment of interest thereon or Fees or reduce the principal amount thereof, or
increase the Commitment of any Bank over the amount thereof then in effect (it
being understood that a waiver of any Default or Event of Default shall not
constitute a change in the terms of any Commitment of any Bank), (ii) amend,
modify or waive any provision of this Section, (iii) reduce any percentage
specified in, or otherwise modify, the definition of Required Banks or any
provision of this Agreement specifying the number or percentage of Banks
required to take any action hereunder or (iv) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement or any other Credit Document. No provision of Section 10 or any other
term or provision relating to the rights or obligations of the Agent may be
amended without the consent of the Agent.
11.11 SURVIVAL. All indemnities set forth herein including, without
limitation, in Section 1.11, 1.12, 3.04, 10.07 or 11.01 shall survive the
execution and delivery of this Agreement and the making of the Loans and
Competitive Bid Loans, the repayment of the Obligations and the termination of
the Total Commitment.
11.12 DOMICILE OF LOANS. Subject to Section 11.04, each Bank may transfer
and carry its Loans and Competitive Bid Loans at, to or for the account of any
branch office, subsidiary or affiliate of such Bank, PROVIDED that the Borrower
shall not be responsible for costs arising under Section 1.11 or 3.04 resulting
from any such transfer to the extent not otherwise applicable to such Bank prior
to such transfer.
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11.13 CONFIDENTIALITY. Each Bank shall hold all non-public information
furnished by or on behalf of the Borrower in connection with such Bank's
evaluation of whether to become a Bank hereunder or obtained by such Bank
pursuant to the requirements of this Agreement, which has been identified as
such by the Borrower, in accordance with its customary procedure for handling
confidential information of this nature and in accordance with safe and sound
banking or lending practices and in any event may make disclosure reasonably
required by any bona fide actual or contemplated transferee or participant in
connection with an actual or contemplated transfer of any Loans or Competitive
Bid Loans or participation therein or as required or requested by any
governmental agency or representative thereof or pursuant to legal process or to
such Bank's attorneys or independent auditors or affiliates; PROVIDED that
unless specifically prohibited by applicable law or court order, each Bank shall
notify the Borrower of any request or requirement by any governmental agency or
representative thereof (other than any such request or requirement in connection
with an examination of the financial condition of such Bank by such governmental
agency) or pursuant to legal process for disclosure of any such non-public
information prior to disclosure of such information; and PROVIDED FURTHER, that
in no event shall any Bank be obligated or required to return any materials
furnished by the Borrower or any Subsidiary of the Borrower.
11.14 WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
11.15 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
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11.16 EXISTING NOTES. Each Bank that is a party to the Existing Credit
Agreement shall, on the Restatement Effective Date or within 30 days thereafter,
deliver to the Borrower for cancellation any Note (as such term is defined in
the Existing Credit Agreement) made by the Borrower in favor of such Bank
pursuant to the Existing Credit Agreement. If any such Bank has failed to
deliver to the Borrower any such Note by the close of business of the Borrower
on such thirtieth day, such Bank shall execute and deliver to the Borrower a
letter in form and substance reasonably satisfactory to the Borrower pursuant to
which such Bank will agree to indemnify the Borrower against losses that my
arise from the failure of such Bank to deliver any such Note to the Borrower.
* * *
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